IT: Where assessee had also used loan funds for making investments that earned tax free dividend, part of interest expenditure was to be disallowed in terms of rule 8D(2)(ii) read with section 14A
Tuesday 6 May 2014
HC dismissed assessee's appeal seeking minor reduction of pre-deposit requirement
CST & VAT : Where assessee requested that requirement of pre-deposit be reduced from 25 per cent to 20 per cent and he may be granted six equal monthly instalments, High Court dismissed appeals since no question of law can be stated to have arisen and no interference can be made for such minor adjustments
Minors above 10 years of age can open saving bank account independently: RBI
BANKING : Opening of Bank Accounts in The Name of Minors
No reassessment to tax profit on land dealings as business income and not as capital gains on whims
IT: Where in course of assessment, Assessing Officer accepted assessee's claim that income arising from sale of land was taxable as 'long-term capital gain', in absence of any new material brought on record, Assessing Officer could not initiate reassessment proceedings on basis of mere change of opinion that income in question was taxable as 'business income'
Interest savings of assessee on availing of interest-free loans from its affiliates deemed as consid
Service Tax : Prima facie, at best, only interest saved by assessee by securing interest-free loans from holding-company can be considered as a consideration for services rendered and not loans per se
No abuse of dominance by BMW-India, as it wasn't a dominant player in Indian luxury car market
CL : Where relevant-Indian luxury car market was a nascent, rapidly growing and highly competitive market with fluctuating market shares, a high current market share of OP-BMW could not be construed as a sign of market power or dominance
Non-resident couldn't be penalized with sec. 234B interest if its whole income was subjected to with
IT/ILT : Where payments received by assessee, a non-resident company from its Indian subsidiary were subjected to TDS provisions, assessee could not be further held liable to pay consequential interest under section 234B
Supreme Court upholds detention order of 'Subrata Roy', dismisses his plea of illegal custody
CL : In order to execute money decree passed in course of proceedings under Stock and Exchange Board of India Act, 1992, it is not imperative to comply with the provisions of section 51 of Code of Civil Procedure, 1908
Sum paid to acquire rights of telecasting from outside India, in absence of its link with PE in Indi
IT/ILT: Sum paid to acquire rights of telecasting cricket matches from outside India had no connection with the marketing activities carried out through Permanent Establishment ('PE') of assessee in India - Thus, there was no economic link between the payments - The liability to pay royalty had not been incurred in connection with and was not borne by the PE of the payer in India -Thus, impugned payments couldn't be deemed as royalty in view of Article 12(7) of India-Singapore DTAA
Atma Raises Pitch For National Policy On Rubber
Rubber based industry today urged the government theneed and imperatives of a comprehensive National Rubber Policy to be framed, on the lines of the Auto Sector Policy. It should be outlining medium-long term objectives, roadmap and recommendations, sectoral competitiveness etc.
AutomotiveTyre Manufacturers Association [ATMA] has already submitted aproposal for National Rubber Policy which is likely to come up for discussion in stakeholders' consultations on 9th of this month at Kottayam. For the last several years, domestic consumption of NR has outstripped its availability.
According to Rubber Board figures, the gap between domestic production and consumption widened to 133,400 tonnes in the just concluded year 2013-14. Industry estimates that during the current fiscalyear also the production will lag behind consumption by around 100,000 tonnes. According to ATMA, Natural Rubber imports are therefore imperative to plug the demand supply mismatch and yet the industry continues to suffer from 'Inverted DutyStructure'.
Various trade agreements that India has signed with its neighbourshave further aggravated the inverted duty structure of the industry. While basiccustoms duty on tyres is 10%, under various Trade Agreements, the duty (on tyres) is actually much lower than the basic rate of customs duty.
On theother hand, NR is in the negative listin these trade agreements and hence not eligible for any concessional treatmentin duty. For instance under ASEAN FTA, tyres can be imported at amuch lower 6% duty but NR is inthe negative list. Under Indo-Sri Lanka agreement, tyres can be imported at Nil duty but there is no duty concession on NR. Under India-Malaysia agreement also radial tyres can be imported at 6% duty but NR is in the negative list.
"The basic principle that the policy makers need to consider is that wherever the basic raw-material(like NR for rubber industry) is in the 'negative list' and not eligible forany concessional treatment in duty, the finished product shouldalso be kept out of the purview of concessional duty," said Raghupati Singhania, vice chairman, ATMA. He added that much like the Auto Policy which envisions a longterm roadmap for the Industry, the country also needs a 'National Rubber Policy' as rubber touches the lives of over 10 lakh growers and has a rich and diverse value chain encompassing tyres, other rubber goods like conveyer belts,auto components, footwear, medical supplies, sports equipment etc.
Eachsegment of the rubber sector has its own set of complexities which need to be addressed in a policy document with defined growth parameters. Amitab Kant, secretary,Department of Industrial Policy and Promotion announced that both Inverted Duty Structureand inconsistencies in India's FTAs are being seriously looked into through two recently constituted committees. According to him, manufacturing needs to be given a fillip to lift overall GDP and issues such as inverted duty structure undermine industry's competitiveness. Leaders of ATMA met the new Secretary and galvanised support for National Rubber Policy.
Source:- business-standard.com
Tea Imports Witness Sharp Fall Of 25.22Pc
Tea imports into the country witnessed sharp fall of 25.22 percent during the first three quarters of the current fiscal year when compared to the imports of the corresponding period of last year.
The tea imports into the country during July-March (2013-14) were recorded at $221.678 million against the imports of $296.459 million during July-March (2012-13), according to the data of Pakistan Bureau of Statistics (PBS).
In terms of Pakistani rupee, the imports of tea into the country decreased by 19.07 percent during the first nine months of the current year.
The tea imports in rupees term during the period under review were recorded at Rs.23,128 million compared to the imports of Rs.28,579 million during the last year.
Meanwhile, on year-on-year basis, the imports of tea into the country decreased by 13.68 percent in March 2014 compared to the imports of March 2013, the PBS data revealed.
The tea imports into the country during March 2014 were recorded at $28.986 million compared to the imports of $33.579 million in March 2013.
On month -on-month basis, the tea imports into the country also witnessed decrease of 0.74 percent in March 2014 when compared to the imports of $29.202 million in February 2014.
It is pertinent to mention here that the overall food imports into the country decreased by 8.22 percent during the first three quarters.
The food imports into the country were recorded at $3.076 billion in July-March (2013-14) compared to the imports of $ 3.351 billion during the same period of last year.
Country's overall trade deficit narrowed by 5.49 percent during first three quarters of current fiscal year as exports expanded by 6.06 percent while imports witnessing slight growth of 0.86 percent as compared to the same period of last year.
On year-on-year basis, the trade deficit decreased by 11.98 percent in March 2014 when compared to the deficit of the same month of last year.
The exports from the country during July-March (2013-14) were recorded at $19.107 billion against the exports of $18.016 billion recorded during July-March 2012-13.
On the other hand, the imports into the country during the period under review were recorded at $33.038 billion against the imports of $32.756 billion during the corresponding period of last year.
Based on the figures, the trade deficit during July-March (2013-14) was recorded at $13.931 billion against the deficit of $14.740 billion in July-March (2012-13), showing negative growth of 5.49 percent.
Source:- brecorder.com
HC quashed reassessment as grounds of reassessment was under challenge before HC in different procee
CST & VAT : Where ground of reassessment is 'loose slips of paper' found during visit and same ground is already in challenge before High Court, department could proceed with reassessment invoked only after High Court conclusively held that slips of paper amounted to 'recording of suppressed purchases and sales
Participation in assessment proceedings ratified jurisdictional issue; block assessment held valid
IT: Where in pursuance of search conducted at premises of another person, a notice was issued calling upon assessee to file his return, in view of fact that assessee had responded to notice, filed return, participated in block assessment proceedings and suffered an assessment, he was not justified in raising a contention at later stage before Tribunal that block assessment not being in terms of section 158BD, failed for want of jurisdiction
Palm Oil Down, Stocks Data Awaited
Malaysian palm oil futures ended lower on Monday, stretching losses into a fourth straight day, as investors waited for an official report on export demand and stocks of the tropical oil in the world's second-largest producer. The benchmark July contract on the Bursa Malaysia Derivatives Exchange fell 0.4 percent to 2,583 ringgit ($794) per tonne by the day's close, with prices trading between 2,570-2,609 ringgit.
Prices on Friday had plunged to a near three-month low of 2,558 ringgit, dragged by declines in rival soyoil markets overseas that are tracked by palm. Official data on Malaysian palm oil stocks, output and exports in April is due to be released next Monday by industry regulator the Malaysian Palm Oil Board. "The morning session was plus 10-15 points, but in the afternoon it was marginally lower. The market is trading nowhere," said a trader with a foreign commodities brokerage.
"The first 10 days' exports report and the MPOB report are not out yet. The market has no clear direction." Total traded volumes on Monday stood at 35,871 lots of 25 tonnes, just above the average 35,000 lots. Technicals showed that palm oil may hover above support at 2,587 ringgit per tonne as indicated by a Fibonacci retracement analysis, said Reuters market analyst Wang Tao.
Consumption of palm oil, used as cooking oil as well as a key ingredient for many food products ranging from biscuits to ice cream, is widely expected to climb ahead of Eidul-Fitr celebrated this year in July. Cargo surveyors reported last week that Malaysia's palm oil exports rose between 1.3-1.7 percent in April compared with a month ago, with higher imports from the world's biggest edible oil buyers India and China, as well as Pakistan, offset weaker demand in Europe and the United States.
But traders said demand needs to rise faster to lift prices, which have dropped nearly 3 percent this year after weakening continuously since March. "The April export data (from the surveyors) was below estimates. They (traders) were talking about 2.5-3.0 percent higher," the Kuala Lumpur-based trader added. In competing vegetable oil markets, the US soyoil contract for July rose 0.1 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange lost 2 percent.
Source:- brecorder.com
Supreme Court lays down procedure for criminal Courts to expedite disposal of cheque bouncing cases
CL : Many of the directions given by the various High Courts, are worthy of emulation by the Criminal Courts all over the country dealing with cases under section 138 of the Negotiable Instruments Act, for which the following directions are being given :-
Exporters May Get 50% Freight Subsidy
Exporters are likely to enjoy a subsidy of up to 50 per cent on total freight charges paid on shipment of merchandise through ports outside Odisha.
The draft export policy says the state government will reimburse up to 50 per cent of the cost of transportation paid by exporters at ports outside the state provided ports within the state do not have facilities for handling such cargo.
Exporters would also get incentives for publicity and exposure of up to 50 per cent of the total cost subject to a ceiling of Rs 50,000. But such incentives will be allowed only in case of select reputed trade fairs. Besides, firms availing travel support from government of India under similar scheme will not be eligible for state incentive.
The draft policy is aimed at identifying sectors which are already contributing or have the potential to contribute to exports. It also seeks to identify the bottlenecks which need to be overcome to enable the sectors to realise their full potential. Infrastructure constraints have to be overcome to boost exports.
The state’s investment promotion agency Industrial Promotion &Investment Corporation of Odisha Ltd (Ipicol) will provide technical inputs to the director, export promotion & marketing (EPM) in areas related to export policy, incentives and other important issues.
The thrust of the policy is to boost exports in the MSME (micro, small and medium enterprises) sector.
Sectors with potential for exports include handicrafts, handloom, textiles,engineering and chemicals, marine products, agro and forest products, pharmaceuticals, electronics and software products, gems and jewellery.
Odisha’s overall exports stood at Rs 2382.83 crore on 2001-02 and has been consistently growing since then. Apart from metallurgical and mineral products that have a lion’s share in the export basket, agriculture &forest products, handloom products, handicrafts products, textile products, gems & jewellery products and pharmaceutical products are also exported from the state.
But exports from Odisha in 2011-12 saw a drop of 5.61 per cent at Rs 16,139.20 crore in 2011-12 compared to Rs 17,098.88 crore in the previous fiscal.
The steepest fall was noticed in case of exports of engineering, chemicals and allied products which nosedived 75.23 per cent from Rs 612.62 crore to Rs 151.69 crore.
Exports of metallurgical products too fell marginally in value terms from Rs 4,807.98 crore in 2010-11 to Rs 4,793.94 crore in 2011-12. The quantity exported, however, surged from 0.26 million tonne to 0.76 million tonne.
Source:- business-standard.com
Chinese Policy Causes A 25% Fall In India's April Cotton Exports
The Indian cotton yarn industry is in a spot. The recently announced Chinese cotton policy has made cotton yarn exports to the Dragon country unattractive thus denting Indian yarn exports by 25% in the month of April.
Though the demand of cotton yarn in domestic market is showing some recovery but the textile mills say that the robust growth is yet to be felt thus raising concern for the industry which has just come out from the financial hardship of 2009-10.
Talking to ET, SP Oswal, chairman and managing director, Vardhaman Group said, "Last year the average exports was around 120 million kg. This was largely driven by Chinese demand. But this April yarn exports has come down to 90 million kg. Chinese cotton policy is one of the major reasons for a drop in cotton yarn exports from the country." China accounts for nearly 50% of the yarn exports from India.
China has reduced its cotton yarn import volumes from India in the last two months, which has put Indian yarn exports under pressure. According to the new policy which has come effective from April 1, the government has lowered cotton auction bids to 17,250 Yuan per tonne, down 4.2% from its floor price of 18,000 Yuan per tonne.
"Price is the main concern for Indian yarn exporters. But we are hopeful things will start changing shortly. Indian yarn exporters are also trying to beef up their presence in Bangladesh, Korea and Hong Kong," said K Selvaraju, secretary general, Southern India Mills Association (SIMA).
Source:- timesofindia.indiatimes.com
Mango Exports: Pounce While India Is Still Out, Says Expert
The recent ban on Indian mangoes being exported to the European Union (EU) countries offers a unique opportunity to Pakistan who can pounce and expand their business, Harvest Trading Director and horticulture expert Ahmad Jawad said in a statement.
The EU banned Indian alphonso mangoes and four vegetables from May to December 2015 on grounds that their mangoes were contaminated with non-European fruit flies.
“It is the right time for Pakistani exporters to push their product into high-value European markets so that mango lovers don’t feel a shortfall, especially for the EU where Pakistan has been awarded GSP Plus status,” Jawad said.
With an annual production capacity of around 1.6 million tons, India is the world’s largest mango exporter, selling up to 70,000 tons to overseas markets, according to The Economic Times.
The banning of Indian mangoes by the EU has opened up an opportunity for the Pakistani exporters. It may, however, be a wakeup call at the same time for the latter as both the countries use same technology: Hot Water Treatment (HWT).
“The government and its allied departments should impose strict monitoring of mangoes this year so that we may grab the markets in EU and the United Kingdom,” Jawad said, while talking to a group of journalists in Islamabad – the significance of the EU markets can be judged from the fact that the UK alone imports £6 million worth of mangoes from India, according to The Economic Times.
The controversial ban on Indian mangoes by the EU has heightened the concerns of Pakistani mango exporters who might suffer a similar fate, if they fail to comply with the EU regulation standards.
“The permission may be granted to only those exporters who are prepared to comply with the protocols set by the EU,” the statement quoted Jawad as saying.
The Pakistani mango export industry is promoting the use of HWT and looking after Global Gap Mango farms that have been doing good agriculture practices so that fruit flies and other pests may be destroyed before the shipments are dispatched, the statement read.
In HWT, mangoes go through a thorough cleaning system where they are treated in hot water at temperatures of around 48°C (118.4°F) for approximately an hour. They are then dried, packed and cold treated.
Pakistan’s HWT facility has also been approved by Australia, South Korea, Mauritius, Lebanon, and the facility is open to all in the fresh produce exporting trade.
However, Jawad informed that the country will have to wait to learn if the HWT facility satisfies authorities in the UK and EU.
The statement further said that the impact of the ban of Indian mangoes has turned into a controversy not only in India but also in the EU.
Many importers, retailers, growers and politicians have branded the prohibition as a punitive and over-reactionary measure and started active lobbying against it. They have even filed an e-petition to the concerned authorities for the reversal, the statement said.
Source:- tribune.com.pk
India Spending Billions Of Dollars On Ipr Imports
India is estimated to have spent a tidy sum of over USD five billion in the fiscal 2013-14 on imports of the intellectual property rights (IPRs) clearly negating concerns over India's IPR track record by the countries like the US which has been threatening trade sanctions against New Delhi by putting it under the Priority Watch List under an American trade law, an ASSOCHAM paper on IPR Imports has pointed out.
India's imports of IPRs in the quarter ended December , 2013 were over USD one billion while exports were negligible, as per the official data reviewed by the ASSOCHAM paper and the import bill on this count may well be around USD five billion in the FY 14.
Whether it is in regard to merchandise trade or the intellectual property rights, India has been in full conformity with the World Trade Organisation IPR regime This is borne out by the data . Our trade deficit is close to USD 200 billion clearly reflecting an open economy willing to accept large imports .In regard to IPRs, we as a growing economy realises the importance of cutting-edge technology for improvement of our productivity and for which we have been paying. The figures speak for themselves, ASSOCHAM President Mr Rana Kapoor said.
Given the fact that India is still a developing economy and almost one-third of its people are on subsistent level, the IPR expectations from it should be realistic. Besides, it has also to deal with the greed element of patent-holders who want ever-greening even after the patent period has lapsed.
The ASSOCHAM paper points out that the problem arises when the large economies like the US and the European Union start expecting growing markets like India not only to follow the multilateral rules under the WTO-mandated TRIPs (Trade -Related Intellectual Property Rights) but also be WTO Plus.
In case these countries want much more tightening of the IPR regime, they should press for the same in the multilateral forum like the WTO to which they are the major members. Why initiate their individual and unilateral probes and reports, the chamber said, adding that the Indian industry too is keen on a well-established IPR so that innovation can be promoted, even though there are differences between the developing and the developed world on affordability in key areas of interest to poor people, like pharmaceuticals.
Besides, India's patent regime is in full compliance with the multilateral dispensation and the Indian court's judgements on issues like Compulsory Licensing for life saving drugs are completely in sync with these national and multilateral laws.
The desire to see their trading partners do WTO Plus is becoming a problem even with regard to the European Union. It is precisely for this reason that the ambitious free trade agreement with the EU on trade and investment has been stuck. By such an obstinate attitude, some of the big economies are losing more opportunities than gaining, the ASSOCHAM paper noted.
Source:- business-standard.com
Indian Rupee Fails To Maintain Initial Gains Vs Dollar
The Indian rupee failed to maintain initial gains against the US dollar but was still quoted slightly higher at 60.20 in the morning trade on mild selling of American currency by banks and exporters.
The rupee resumed higher at 60.10 per dollar as against the overnight closing level of 60.21 at the Interbank Foreign Exchange market in view of sustained foreign capital inflows into equity market.
However, it failed to maintain initial gains and was quoted at 60.20 per dollar at 1000 hours on some dollar demand from banks.
It moved in a range of 60.10-60.22 per dollar during the morning deals.
In New York market, the dollar was little changed against major rivals yesterday as investors continued to comb through economic data and speeches from central bank officials to get a better sense of when the Federal Reserve could begin to raise interest rates.Meanwhile, the benchmark Sensex rose by 119.26 points, or 0.53 per cent, to 22,564.38 at 1000 hours.
Source:- financialexpress.com
Mere confession of first stage dealer wasn't enough to levy penalty on second stage dealer
Excise & Customs : Department cannot levy penalty on a Second Stage Dealer merely on ground that First Stage Dealer had confessed that he had not received any goods from manufacturer and transactions were paper transactions; revenue must hold an independent enquiry against second stage dealer before levying penalty
SEBI is empowered to monitor call records of any person against whom any enquiry or investigation is
CL : In a PIL filed by Indian Council of Investor-petitioner, alleging violation of the Fundamental right of privacy by SEBI for intercepting and monitoring calls and calling for Call Data Records (CDRs) from Telecom Service providers (TSP) it was held that SEBI was authorized under SEBI Act for the same . However, since power is capable of misuse and could violate a citizen's right to privacy guaranteed by Article 21 of the Constitution. Therefore, such power cannot be exercised by SEBI for con
HC denies service tax refund on warehousing services as such services were availed of after export o
Service Tax : Where goods were exported on 5-9-2011, assessee could not be allowed refund of service tax paid on warehousing services availed during 16-9-2011 to 15-10-2011, as said services were never used for export goods inasmuch as goods were exported well before availment of services
AO couldn’t presume understatement of income merely on basis of report of DVO; HC quashed reassessme
IT : Opinion of DVO is per se not an information for purpose of reopening of an assessment
HC: SEBI can’t inquire into petitioner’s call data records from telecoms as it violates fundamental
CL : In a PIL filed by Indian Council of Investor-petitioner, alleging violation of the Fundamental right of privacy by SEBI for intercepting and monitoring calls and calling for Call Data Records (CDRs) from Telecom Service providers (TSP) it was held that SEBI was authorized under SEBI Act for the same . However, since power is capable of misuse and could violate a citizen's right to privacy guaranteed by Article 21 of the Constitution. Therefore, such power cannot be exercised by SEBI for con
Valuation adopted by Custom Authorities for import of raw material couldn't be assumed as ALP for TP
IT/ILT: Value of import of raw material accepted by customs authorities cannot be accepted as arm's length price as per provisions of Act
VAT deptt. couldn't presume VAT evasion merely on basis of notice for evasion of excise duty
CST & VAT : Merely because Central Excise Department has issued a notice, evasion of excise duty and consequent evasion of VAT cannot be presumed and materials/evidences collected by Central Excise Department must be examined by VAT Department to come to an independent conclusion about evasion of VAT
CCI approves proposed combination as shares of parties won't be significant in market of automobile
Competition Law : Where parties to combination were to be engaged in business of auto component, in view of fact that there were other enterprises producing similar auto components with significant market share in India, proposed combination was not likely to have an appreciable adverse effect on competition in India and therefore, same was to be approved under section 31
HC sets aside reassessment order as it was passed by AO in haste without considering objections of a
IT: Where Assessing Officer being satisfied with explanation offered by assessee with regard to its claim that purchase/sale of shares offered to tax under head 'capital gain' was a result of investment activity passed assessment order under section 143(3) upon assessee and subsequently he reopened said assessment on plea that assessee had so manipulated its account that normal business profit in share trading was claimed as short-term capital gain so as to attract lower rate of tax, since very
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