Transfer would arise in year of registration of sale deed of property, capital gain taxable in that

IT: Transfer would arise in year of registration of sale deed of property, capital gain taxable in that year only

Exp. on construction of temporary structure on leasehold land to meet business needs was revenue exp

IT : Where assessee to run its milk parlour put up structure on a leased land and in next year because of non renewal of agreement said structure was demolished, expenditure incurred on construction of structure was allowable as revenue expenditure

Fuel used for power generation to manufacture a product qualifies as raw material for concessional t

CST & VAT: Where diesel/oil, etc. are used for generation of power, which, in turn, is required/used for manufacture of final product, such diesel/oil is 'raw material' and, therefore, eligible for concessional rate of tax

New-Age Eateries Force You To Pay Tips, Tax You For It

Tipping in restaurants, a preserve of customers and traditionally linked to service satisfaction, is being mandatorily charged in new-age restaurants in Kolkata. The move has not only evoked sharp reaction from the rest of the industry, but has also attracted the scrutiny of tax experts as restaurants are interpreting tax laws differently, leading to billing discrepancies.

Pizza Hut, Spaghetti Kitchen, Cafe Mezzuna and Chili's are among a handful of restaurants that have begun levying 10% service charge on the food bill. Chili's Kolkata master franchisee Rishi Bajoria defends it, saying mandatory tipping is prevalent all over the world. "We see it beneficial in the long run. It will standardize the tip amount and drive staff to work hard and maximize billing so that service charge increases," he argued.

Established restaurateurs rubbish the concept. Suresh Kumar Khullar, proprietor of five-decade-old popular joint Amber on Waterloo Street, vetoed mandatory tip. "Tipping should remain the discretion of customers. Why should a patron be forced to pay a 10% tip if he or she is dissatisfied with the service? Those that are levying the charge actually deduct a portion for upkeep of crockery and cutlery," said Khullar.

Chinese restaurant Red Hot Chilli Pepper attempted to introduce the concept some years ago but discontinued it after VAT rate was hiked and Service Tax was introduced in July 2010. "With mandatory tax hiking the bill by nearly 20%, we felt it was unfair to further burden the customer. If they are happy, they always leave behind a generous tip," said Red Hot Chilli Pepper Hospitality Services director Asim Mewar.

Trader Sumit Ghosh, a regular diner at Park Street, didn't mind leaving a 10% tip till he discovered that Pizza Hut was levying service charge in the bill. "I never scrutinize a bill closely but did because this one appeared to be more than anticipated. When I asked the manager about the service charge, he pointed to the menu where it was mentioned in nearly illegible fine print," he said.

But he found difficult to reconcile with VAT and Service Tax being levied on tips euphemistically named service charge. Not only was he charged 10% or Rs 200 on a food bill of Rs 2,000, he paid both VAT of 14.5% and service tax of 4.944% on this amount. He was even more flummoxed when a week later, he discovered that the taxation at Chili's was different. "By making tipping mandatory and levying taxes on it, a customer is being fleeced by the restaurant and the government," said Ghosh.

Saroj Kumar Sahoo of Devyani International, the master franchisee of Pizza Hut in India, insists its computation is correct. But Bajoria, whose restaurant has opened only a couple of months ago, says his lawyers have studied the Service Tax Rules 2(c) closely before finalizing on billing system at Chili's. The same computation is done at Barbeque Nation.

Service Tax expert Pulok Saha, too, terming the computation of VAT on service charge incorrect. "Kerala high court had ruled against levy of Service Tax in restaurants according to a Supreme Court ruling in which it stated that VAT and Service Tax were mutually exclusive. Thereafter, Central Excise department artificially created a value of service in the restaurant by taking into account the ambience and levied Service Tax. But quick service restaurants are also charge Service Tax on takeaway food. That is illegal as there is a specific exclusion for food that is purchased but not consumed in a restaurant," he said.

Unions have been demanding that service charge be introduced but most of the well-known restaurants that have been around for decades have been resisting it. Standalone restaurants in the city are quite clear on the issue and feel it will be flirting with disaster. "Salaried staff will have no incentive to be more polite, efficient and productive as tip is ensured. The discretion of tipping should remain with customers," said Nitin Kothari, proprietor of popular Park Street fine dining destinations Mocambo and Peter Cat.

Source:- timesofindia.indiatimes.com

Sum received by retiring partner towards his share capital wasn’t liable to capital gain tax

IT : Amount received by a partner on dissolution of firm or on his retirement is an amount paid towards his share capital; no element of transfer of interest in partnership asset by retiring partner to continuing partner can be said to be involved

Exp. on construction of temporary structure on leasehold land to meet business needs was revenue rec

IT : Where assessee to run its milk parlour put up structure on a leased land and in next year because of non renewal of agreement said structure was demolished, expenditure incurred on construction of structure was allowable as revenue expenditure

Soyameal Exports Dips 8% To Rs 7,000 Cr In Oct-Mar 2013-14

Soyameal exports fell by 8% to nearly Rs 7,000 crore in the first half of the current oil marketing year that started October last year due to lower shipments, according to trade data.

It stood at Rs 6,987 crore during October 2013-March 2014, against Rs 7,602 crore in the year-ago period.

Oil year runs from October-September.

In volume terms, exports fell by 24% to 19.65 lakh tonnes in the first six months of 2013-14 oil marketing year from 25.97 lakh tonnes in the corresponding period of previous year, according to Soyameal Processors Association of India.

At 5.87 lakh tonnes, Iran was the major importer of Indian soyameal in the first half of oil year.

India exported 1.25 lakh tonnes of soyameal to Belgium, 2.23 lakh tonnes to France, 1.13 lakh tonnes to Indonesia, 2.22 lakh tonnes to Japan, 1.6 lakh tonnes to Korea, 1.46 lakh tonnes to Thailand and 1.02 lakh tonnes to Vietnam.

During 2012-13 oil marketing year, India exported 3.4 million tonnes of soyameal, valued at Rs 10,591 crore.

India's soyameal exports, which constitute the bulk of oil meal exports, decreased by 27.50% to 2.32 lakh tonnes in March 2014 from 3.20 lakh tonnes a year earlier.

Soyameal exports fell by 10% in October-December quarter at 11.84 lakh tonnes.

However, shipments dropped sharply by nearly 50% to 7.8 lakh tonnes during January-March quarter, against 15.17 lakh tonnes in the year-ago period due to lower availability of soyabean, which led to lower crushing.Madhya Pradesh is the largest producing state of soyabean, which is grown in Kharif season.

Source:- business-standard.com

China Making Inroads Into Export Markets By Exporting Onions Similar To Indian One

To make inroads in the traditional export markets of India, where consumers give first preference to Indian onion, China has started promoting a variety, which is similar to Indian onions. Confident that the consumers in these countries will stick with Indian onions unless they become too expensive, Indian exporters hardly feel threatened by this move by China.

India is the second largest producer of onions in the world following China. However, it is the top onion exporter, occasionally losing its top position to the Netherlands, which usually ranks second in export of the bulb.

According to Agricultural Produce Export Development Authority ( APEDA), India has exported 16.66 lakh tonne onion worth Rs 1,966.67 crore during the year 2012-13. Malaysia, Bangladesh, United Arab Emirates, Sri Lanka, Indonesia, Singapore and Kuwait are the traditional markets for the red and pungent Indian onions.

During last three to four years, China, has started promoting one of its variety, which is similar to Indian onion in colour, in India's traditional export markets.

RP Gupta, director of the National Horticulture Research and Development Foundation (NHRDF) confirmed, "China grows a crop similar to our red variety. However, their taste and shape are different as the weather and soil conditions are not the same."

Indian exporters are least worried about this move by China. Firstly, they are confident that onion from no other country can beat Indian onion in taste and other quality parameters. Trade sources say that the order of preference of the traditional markets in the descending order is India, Pakistan, Iran, Egypt and China.

Unless the difference between Indian onion and that from other exporting countries is more than $100/tonne, the traditional markets prefer to buy Indian onion due to its taste and appearance. "China can enter into our traditional export markets only if the Indian onion becomes too expensive during June to September in the domestic market, making exports difficult," said Ajit Shah, president, Onion Exporters Association.

Secondly, the peak season for export of Indian onions is from January to March, when hardly any country, barring Egypt, which offers a small quantity, is present in the market.

Harvesting of Indian onion gets over in June, while the Chinese onion comes from June onward. Thus, China cannot compete with Indian onion during its peak export season.

Source:- economictimes.indiatimes.com

..Exploration Of Scarce Minerals Top Priority Of Geological Survey Of India's Mission Ii

India imports a number of minerals like phosphates, tungsten, potash, gold and platinum every year. Keeping the ever increasing demand in mind, the national mission II on natural resource management (NRM) of Geological Survey of India (GSI) will now take up exploration of these minerals on domestic front as one of the priority area besides looking for rare earth elements (REE).

Though the new deputy director general of NRM, Anjan Chatterjee who took charge on April 1 at the mission headquarters in Nagpur, has his priorities listed, he wants to continue with the conventional work of identifying the indicated, probable and proved deposits of different minerals.

Speaking to TOI, he said exploration of minerals with poor resource-cum-reserve base will the biggest priority of the mission. "Minerals like phosphate and potash used in fertilizers are always in short supply in imports. India is world's second biggest consumer and importer of potash. During good monsoons, the prices of these minerals shoot up and government has to subsidize it for farmers. So we really need to look for may be small but economically viable deposits," he said. Rajasthan has some known deposits but they are of very poor quality and need enrichment. This may require help from the Indian Bureau of Mines. Gold is another mineral which should be explored in newer areas.

Tungsten is one RRE mineral which has suddenly come in very high demand range due to use in electronic devices. But India has no known reserves of this mineral so far. So priority would also be given to explore the possibilities of its existence. It is also considered to be a strategic mineral as it is used in armour plating and bullet proofing of VVIP cars. It is also called as 'industrial diamond' as it is used to cut during drilling. Rajasthan had two tungsten mines but had to be abandoned as they became non viable. So besides importing, India needs to think of recycling it. "We should not only explore for minerals as raw materials but also manufacture their products and sell them outside the country as the developed world does rather than just exporting the raw material," said Chatterjee.

Similarly, Coal is being imported at a large scale. But looking at the ever increasing demand in the industry, coal should be explored once again with a different action plan which will minimize imports. Need-based minerals like cobalt and nickel should also be explored in ocean beds instead of conventional land deposits.

EXPLORATION PRIORITIES

MINERAL SECTOR

a) Delineate new target regions and take up exploration

b) Re-orient organisational methodology to undertake collaborative ventures with state or private agencies

c) Minimize imports and augment local deposits

d) Besides meeting targets, exceed drilling for explorations

e) Flexible working to allow explorations of need based minerals like cobalt and nickel

ENERGY SECTOR

a) Augment resource base of coal and lignite through regional exploration

b) Identify potential Coal Bed Methane (CBM) blocks for exploration and exploitation

d) Explore potential geological formations for geothermal energy resources

e) Conduct research on potential of gas hydrates

Source:- timesofindia.indiatimes.com

India: Ig International Set For Record Chilean Apple Imports

India’s IG International is on track to having 45,000 metric tons (MT) of cold storage capacity by the end of 2014, in a bid to adjust to consumption trends and bring new products to untapped regions. After stretching its share of Chilean cherry imports, director Tarun Arora says apples imports from the South American country will break new records in wake of the supply challenges from other sources. Arora is also excited about the upcoming launch of Zespri SunGold kiwifruit, followin a Northern Hemisphere season where Iranian oversupply put the squeeze on Italian and French competitors.

Arora says the apple import deal looked very bright in the first five weeks of 2014 with good supply from sources such as Washington and China, but today the situation is quite different in the transition between seasons.

“Slowly things started changing, especially for varieties that are liked by the Indian market, which are Gala and Red Delicious,”

“Washington"> had much larger size and four million less cartons moving into week 10 and to week 15, so there was a shortage of apples there…the market started moving up and it went higher and higher, probably by US$5-6.

“Then New Zealand the apples have had a good time in European markets so there has been very short supply of New Zealand apples in the Indian market.”

As a result he says everyone’s focus has turned to Chilean apples, with Arora estimating that 900,000 boxes are on their way.

“It looks to be one of the strongest seasons. It will break all records from Chile this year.

“The market until now has been very strong in India, so once the arrivals from week 9 shipping start arriving in another two weeks’ time, we’ll probably get to know more. As for now the market appears to be good.

Bangalore will serve as a key controlled atmosphere cold storage point for IG International’s pomegranates, and has also shown good opportunities for imports of Chilean cherries. Photo: soul_flow via Flickr Creative Commons

“It also makes me scared because so much volume is coming in just those specific weeks, but it should subsidize as there’s not going to be other alternatives available during that time; in a very small way Washington apples will come in, and it will not have a big competition in the sizing from Chile.”

He adds that Indian domestic apple growers have also done well this year. While most local supply is finished around the first week of April, only a small percentage remains; a large part of this is due to the country’s level of cold storage and controlled atmosphere (CA) capacity.

“CA storage is only 50,000 [MT] which is not even 5% or 6% of the entire crop, so between 92-94% is either in the cold storage which cannot last more than two or three months [after season kick-off in August], or sold in the running market.

“It still takes time before the capacity starts building and people start holding more Indian product, so more or less even with the CA capacity, people start pushing that product January onwards and want to get over with it in the month of April.

“I think Indian supply is more or less over, with maybe 1% of the total Indian crop in CA right now, and it will not have a very big impact on the imported arrivals.”

Cherries and kiwifruit

Another recent highlight for Arora is an increased market share in Chilean cherry imports, with the company now holding 60% of the market for cherries from that origin.

“Overall, the quality in the beginning was really good – we did some trials on CA as well, of which half went well and half was fine,” he says.

“The cherry market is growing on the broader side. Last year we did almost half of it so this year we’ve doubled our volume. Each year we’re seeing a growing cherry market.

“There are newer markets that are starting to accept the expensive product – we got a good opportunity with good availability to open up new markets, so we have now started moving cherries in markets like Kolkata and Bangalore.”

However, Arora sees some limits to growth for cherry imports for logistical reasons.

“The only disadvantage why we’re not able to move so much product is that the cherries coming in by air, so there is the air component which is included, unlike in China where you can send product by sea.

“Transit times have become better, and I don’t foresee a huge growth, but I’d foresee good organic growth in terms of the air cargo coming into India from Chile.”

One key Chilean product that IG International does not market is kiwifruit, with its focus on Zespri product from New Zealand during the Southern Hemisphere season.

“This year is our first year for launching the new variety of gold, Zespri SunGold, and we’re really excited about it; I think it will certainly do very well, much better than the previous gold,” the director says.

He mentions that most kiwifruit import focus in India has been on the green Hayward variety. While the company moved into Zespri’s gold Hort16A kiwifruit a few years ago, this coincided with the outbreak of vine disease Psa, to which this variety is more susceptible than the green Hayward or the newer Zespri SunGold (G3).

“It was only two years ago that we started doing marketing in a reasonably big way, and at that time India was already a market with strategy in Hayward, by both importers and Zespri.

“Then Psa happened and gold just got eliminated; we could not get any supply. I’m excited that it will do very well in India, and it’s a very good marketing strategy by Zespri I must say. Long term how it shapes up will depend on how we’re able to market it this year, so we are confident with our new wholesale outlets and cold storages.

“We just opened up in Jalandhar a month back, which is a huge huge market for kiwifruit. It’s up north, another 300km (186mi) from Delhi.”

The New Zealand deal will come on the back of what has been a fairly impactful shift in the Indian kiwifruit market, with the Iranian industry gaining a stronger foothold at the expense of European shippers.

“One of the origins that have really hit India hard is Iranian kiwifruit. There is a huge supply of Iranian kiwifruit which is coming into India now, which has really impacted the Italians and the French.

“We are exclusive distributors of Oscar kiwifruit, which is a label of Prim’land from France – we generally ship a good volume from them, but this year we were short on their volume because we had to divert to Iranian kiwifruit, because on price the Italian and French kiwifruit could not really compete.

“Those who get Italian and French either have to get it in lesser volume to make money on it, or if they bring it in a bigger volume they have to lower the price, and they always end up making losses.”

He says the market change is due increased plantings in Iran, and perception of fruit from this origin.

“If you go back two years ago Indian importers were not too willing to bring in produce from Iran but that has changed.

“There are now more importers who are dealing in a big way from Iran; there are a couple of Iranian companies themselves who have opened up in India who are pushing a lot more Iranian kiwifruit and their focus is totally different.

“They still have some problems though. They really don’t have the product of the quality of Chile and New Zealand, so they’re no threat to those origins.”

Cold storage expansion

When asked about a cold storage investment plan revealed to http://ift.tt/1cJ3mP1 during last year’s Fruit Logistica in Berlin, Arora says a lot of progress has already been made.

“More or less by the end of this year we expect 45,000 metric tons (MT) to already be completed. The Chennai cold storage is already completed and we’ve inaugurated that. Amarawati is already active, although it’s not CA, it’s a normal cold storage.

“In Bangalore we’ve already starting directing the cold storage facility. That should be ready in a couple months’ time, so I think in June it will be ready.

“We’ll probably inaugurate Jaipur next month, and Delhi is almost complete so overall, so we now have 13 cold storages.”

He says the company will only have three CA cold storages for fruit, with one in Bangalore with a strong focus on pomegranates and two in Himachal Pradesh for apples.

“And there’s one one we’re putting in Jaipur but that’s for a different reason altogether because we want to hold garlic or other products,” Arora adds.

Export performance

On the export front, Arora points to a positive inauguration of IG’s joint venture with Sanvi International, despite the drawbacks of weather issues cutting the season short.

“We just opened our JV with Sanvi International which has done tremendously well. We have successfully managed to ship out very good volumes this year, so we’ve already reached half a million cartons of export this year on grapes,” he says.

“We expect to almost triple it next year, so next year we’re expecting anywhere between 1.5-2 million cartons of export of grapes under Sanvi.

“Due to unseasonal rains our season’s cut short. Generally we close around April 21-25, but we’ve already closed now two weeks early because of hailstorms which happened in Nashik 1.5 months ago, and there were excessive rains which really damaged the crop.”

He says if this event had not occurred it would have translated in 100,000 more grape cartons over the two weeks.

“But anyhow, until now it has been a very good season, most arrivals have made it well, the customers are happy about the good arrivals.

“In fresh produce there are always some complaints but we are pretty satisfied about what we have delivered and how the market has accepted our product.”

In other products, Arora mentions IG has had a very good potato season with strong sales in Russia.

“We’ve shipped quite a big volume to Russia on potatoes. The pricing was good, it was a superb year on potatoes.

“Everything fell into place. Egypt and Pakistan were a little high on price, and it gave us the right opportunity to go right into Russia and we shipped in a big way there this year, to St Petersburg and a few to Novosibirsk.”

He adds that the quality of potatoes has also been very good, with a move into relatively new varieties, of which he highlights the Agra 3797 range.

“We’ve stopped Russia for now and we continue into the Middle East, we shipping into Dubai, Damascus and into Kuwait, so we’re shipping into different Middle Eastern countries,” Arora says.

The executive adds that for its third key export product, pomegranates, the going has been a bit “tricky”.

“The volumes have been going down and there are quality issues as well…a single single container is very expensive, so we try to do mixed loads to Dubai, putting in pomegranates with other things.

“Some weeks we can get maybe two or three out, but sometimes it’s difficult to get one out because of the difficulty in availability for good quality product.”

Sfource:- freshfruitportal.com

India Becomes Net Steel Exporter After 6 Years

India became net steel exporter in 2013-14 after a gap of six years and is likely to maintain the momentum in 2014-15 as producers are looking to dock more overseas shipment to tide over subdued domestic consumption.

Total steel exports by India during the last fiscal stood at 5.59 million tonnes (MT), as against imports of 5.44 MT, joint plant committee (JPC), a unit of the steel ministry, said in a report.

India, now the world’s fourth largest steel maker, had been a net steel importer since 2007-08 and the trend continued till 2012-13 with 7.9 MT of imports and 5.2 MT of exports. Before 2007-08, India’s exports were more than its imports.About 4.1% higher exports and 31.3% decline in imports helped India become net exporter of steel.

While higher exports were driven by volatility of rupee and mismatched demand-supply situation in the country; imports were lower mainly due to slowdown in the domestic economy, JPC said.

India’s steel consumption grew by just 0.6% in 2013-14, its lowest in four years, to 73.93 MT, impacted by a slower expansion of the domestic economy and lower imports.

“The low growth rate in domestic steel consumption indicated that base level demand conditions continued to be weak during 2013-14,” JPC said. Construction sector accounts for around 60% of the country’s total steel demand while the automobile industry consumes 15%.

Both sectors were hit by a slowdown in the economy which according to Central Statistics Office (CSO) estimates grew by 4.9% in 2013-14, against the growth rate of 4.5% in 2012-13.

Sensing poor demand in store, almost all domestic steel producers, both public and private, tried to export vigorously and showed good growth in overseas shipments last fiscal.

Steel Authority of India Ltd. (SAIL) had clocked a 30% growth in exports in 2013-14 and aims to more than double the shipments to 1 MT in 2014-15.Rashtriya Ispat Nigam Ltd. (RINL), which exported 1 lakh tonne steel last fiscal, aims to treble that in the current fiscal.

Source:- livemint.com

Will The Rupee Rise In May?

Last May, after the US Federal Reserve first announced a likely roadmap for Quantitative Easing (QE) taper, Morgan Stanley labelled India as a “fragile five” club member with other emerging economies such as Turkey, South Africa, Brazil and Indonesia.In 2014, the Indian Rupee is outperforming Turkey, South Africa, Brazil and Indonesia. pic/thinkstock

Emerging markets were bound to be hit with the withdrawal of cheap liquidity from the system. A rush of money back to the developed markets, coupled with domestic fundamental challenges such as dwindling foreign exchange reserves and high inflation, pushed the rupee to an all time low of 68.8 against the dollar in the next couple of months.

Historically, March has always been a good month for the rupee and together with the overall market optimism of a Narendra Modi-led stable coalition government at the centre, the rupee is displaying a close correlation with the Nifty once again. To be fair, credit must also be given to the UPA government as India’s macro outlook has improved considerably over the last year as a result of the fiscal-tightening measures. Well before the equity rally gathered steam, the rupee outperformed the MSCI emerging market currency basket in January during the EM currency turmoil.

With the Indian rupee close to the key psychological 60 level against the dollar, one would expect the Reserve Bank of India (RBI) to be rebuilding reserves. According to the Bank of America, the central bank has bought $5 billion (including maturity of FX swaps with oil companies) since mid-March. India's import cover, at seven-and-a-half to eight months, is well below the 10 months needed for INR stability which would justify further accumulation of reserves. Indian equities have room for much further upside from current levels. But the same cannot be said about the rupee. In 2009, the INR did jump three per cent on the 2009 poll result. (Equities gained 18 per cent in two days post the result.) However, here are two key differences. In 2009, the INR had lagged recovery in EM currencies after the Lehman collapse as the FX market feared the event risk of the May 2009 elections. In contrast, in 2014, the INR is outperforming the Fragile Five peers. Further, in 2009, the RBI allowed the INR to appreciate as import cover was high. In contrast, again, inadequate import cover will now force the RBI to buy FX if the emergence of a stable government attracts capital inflows according to a Bank of America report.

More importantly, even on the back of the US Fed taper, the dollar index is still trading below close to the 80.5 level. Going forward, the European Central Bank and the Bank of Japan are widely anticipated to add monetary stimulus as has been written in this column in previous weeks. The yen and the euro are poised to weaken against the dollar. We can see the euro at 1.3 and the USD/JPY pair at 110 by year end. The dollar index can rally to levels close to 85-87. It is hard to see the rupee appreciating beyond 57-58 levels over the next year. RBI Governor Raghuram Rajan has cited a finance ministry report to suggest that at any level below 57-58 to a dollar, he would consider the rupee to be overvalued. A “market friendly” result on May 16 can take the rupee to 57 against the dollar. But one would have to be very brave to bet on further appreciation.

Source:- mid-day.com

SAT upheld penalty as appellant was found guilty of doing wash trading/self-trading of scrips

CL: Wash trades/self trades of scrip are violative of SEBI (PFUTP) Regulations

ITAT remanded matter to determine whether loan was advanced by assessee to AE at LIBOR plus rates

IT/ILT : Where assessee advanced certain amount of loan to its AEs, following order passed by Co-ordinate Bench of Tribunal in ITA No. 1866/Hyd./2012 dated 29-11-2003, matter was to be remanded back to Assessing Officer to examine whether rate of interest received was at LIBOR + percentage points and, in case some of loans were reflecting rate at ordinary percentage points, conversion to LIBOR plus was required