Service Tax : Merely because service tax paid is written off as expenditure, same does not prove unjust enrichment on part of assessee, more so, since amount is not collected from customers, this has to be shown as expenditure; hence, assessee was held entitled to refund
Thursday 22 May 2014
Bad debts allowable for loss of advances given in ordinary course even if object clause doesn’t allo
IT : It is possible to do occasional money lending in commercial world without having such object clause also and object clause cannot be only basis to prove money lending and it is possible for one company to lend money to another company for various reasons, even in absence of such object clause
Deemed dividend: Recurrent outflow of sum from co. to shareholder’s firm without any parallel inflow
IT : Where companies in which assessee was holding more than 10 per cent shareholding gave loans to partnership firms in which she had substantial interest but there was no corresponding transfer of funds from said firms to companies, assessee's explanation that loans were advanced in ordinary course of business was not accepted and, consequently, amount in question was to be taxed as deemed dividend
VAT leviable on amount collected by medical colleges and hospitals from sale of prospectus and appli
CST & VAT : Where assessee, a deemed university, was running medical colleges and hospitals attached thereto and it collected huge amounts from sale of prospectus and application forms and earned huge profit thereon, assessee was indulging in business so as to make profit out of sale of prospectus and application forms and sale of said goods would fall under Entry No. 71 of Third Schedule to Karnataka Value Added Tax Act, 2003 so as to attract levy of tax
SC dismissed SLP as petitioner had already availed of statutory remedy available under SARFAESI Act
SARFAESI : Where appellant company had resorted to alternative remedy under section 13(3A), writ petition challenging notice issued under section 13(2) declaring appellant's account as NPA was rightly held as not maintainable
ITAT sets aside TP adjustment when TPO had proceeded on wrong facts to determine nature of services
IT/ILT : Where in transfer pricing proceedings, TPO taking value of management fee paid to AE at nil, made certain addition to assessee's ALP, in view of fact that in support of services rendered, assesee had brought on record invoices raised by AE and, moreover, TPO had proceeded on wrong facts regarding nature of services rendered, impugned adjustment was to be set aside and, matter was to be remanded back for disposal afresh
Govt. delegates powers for removal of auditor and rectification of Co.'s name and so forth to RDs
COMPANIES ACT, 2013 : Delegation of Powers & Functions of Specified Sections to Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmedabad, Hyderabad and Shillong under Section 458 of the Companies Act, 2013
Govt. delegates certain powers for alteration of memo, registration of charitable cos. and so forth
COMPANIES ACT, 2013 : Delegation of Powers & Functions of Specified Sections to Registrar of Companies Under Section 458 of the Companies Act, 2013
Govt. delegates its DIN allotment powers to specified officials at Noida office of Regional Director
COMPANIES ACT, 2013 : Delegation of Powers & Functions of Specified Sections to Regional /Joint/Deputy or Assistant Directors Posted in Office of Regional Director at Noida under Section 458 of the Companies Act, 2013
Duty Free Cars For Civil Servants
Government has been urged to remove duty on cars imported by civil servants and to extend "non-monetary incentives" to its workers as a way of cushioning them against the meagre salaries they earn.
Moving a motion on the country's crippling financial crisis and the liquidity problems bedevilling government, Matabeleland South MP Priscilla Misiharabwi-Mushonga said there was need to have a policy that allows civil servants to import vehicles duty-free so that they are able to move from their homes to their work places.
"I know that currently when we give them an increment, it will not be enough, but we can do something about it through incentives that can motivate them," said Misihairabwi-Mushonga.
Zimbabwe's cash-strapped government has been struggling to pay its workers and in the last few months has had to stagger the payment of salaries because of liquidity constraints as the economic problems continue to dog the country.
Propose allocation of mining shares and farms
"We can also allocate them shares in mining firms so that they can run businesses especially those who have such background like geologists and agronomists," she said.
In moving the motion, Misihairabwi-Mushonga suggested that government should also give the struggling civil servants a percentage in the distribution of youth developmental projects under the indigenous empowerment law.
"We have civil servants who, if allowed to do farming, can cushion their salaries and have an opportunity to look after their families as well as contributing to national development as opposed to letting them being idle in offices because of lack of motivation," the lawmaker said.
The motion was seconded by Bulawayo East MP Jasmine Toffa who said the incentives could help retain skilled labour in the public service after years of braindrain due to low salaries. Binga MP, Joel Gabbuza, said government should correctly grade civil servants and pay them accordingly.
"How do you expect a nurse to earn a same salary with an engineer? This exposes the country to skills flight and as we speak we have engineers working in the private sector because they are low salaries in government," he said.
Samuel Sipepa Nkomo, MP for Lobengula, proposed that government should further scrap duty on goods imported by civil servants for resale to allow them to increase their income.
"I believe that we must be sympathetic to our lowly paid workers who ensure that this government remains relevant. We should also give them an opportunity to go and import goods from neighbouring countries for resale without paying duty, I think it is one practical way of incentivising them because not all of them can afford to buy cars or shares in mining firms," Nkomo said.
Contributing to the same debate, MP for Makoni South Mandi Chimene said government once introduced a vehicle scheme for its workers but it was abused by "greedy business people" who turned it into an opportunity to make money.
"If we are to do this scheme, we will need to put stringent measures to curb corruption and abuse of the facility. Besides, I think civil servants should participate in the indigenisation programme and land reform. No one stops them from participating," she said.
Kuwadzana MP Nelson Chamisa said government should have a clear policy on promotion of hardworking dedicated civil servants and remove "the old" who have overstayed at their positions so that they can create space for the younger generation.
"We must not be out done by the Smith (Ian) regime which created a legacy of establishing coal houses and cottages for its workers.
"This government must do something for its workers like provision of an opportunity to study abroad, or giving them laptops on a facility which allows them to pay over a period of time and the vehicle loan scheme as stated by the mover of the noble motion," he said.
"Long back Mr Speaker sir, headmasters were respected and associated with a better life. I remember then that a quart of beer was synonymous with headmasters as they were able to afford it.
Source:- bulawayo24.com
Sec. 40A(2) disallowance for commission paid to housewives affirmed as they couldn’t act as selling
IT: Where revenue authorities disallowed payment of sales commission made by assessee to its agents by invoking provisions of section 40A(2), in view of fact that those agents were house wives were not in a position to offer any professional advise on matters relating to production, market survey or procurement of orders, impugned disallowance was to be confirmed
Constituents of money couldn’t be traced easily in payment via crossed cheques; sec. 40A(3) disallow
IT: When payment exceeding Rs. 20,000 was made by assessee through crossed cheque and not by account payee cheque, it amounted to violation of section 40A(3)
Exporters allowed to receive advances up to tenor of 10 years for execution of long-term supply cont
FEMA/ILT : Export of Goods - Long Term Export Advances
RBI orders Talking ATMs and ramps outside ATM centres/banks for ease of access to disabled persons f
BANKING : Need for Bank Branches/ATMs to be Made Accessible to Persons With Disabilities
New Gold import norms: RBI allows import of gold by Star and Premier houses and gold lending to dome
FEMA/ILT : Import of Gold by Nominated Banks/Agencies/Entities
Pakistan Aims At Exporting Mangoes Worth $65 Million This Year
Pakistan aims at exporting mangoes worth $65 million this year with exporters concerned about maintaining quality rather than boosting quantity in the wake of the EU ban on mangoes from India, officials said today.
The All Pakistan Fruits and Vegetables Exporters, Importers and Merchants Association has said that it would be exporting mangoes worth $65 million this year.
Last year, the association had exported mangoes worth $60 million to different markets but this year the target has increased to 175,000 tonnes to fetch $65 million, Waheed Ahmed, the association's spokesman, told PTI.
Dispatching of mango export shipments would start from May 25, Ahmed said, admitting that the high value markets of Japan and the US would again be missed this year.
He said increase in exports to South Korea and Australia may compensate for losses. Pakistan exports around 24,000 tonnes of mangoes to the European Union markets every year.
Exporters are now highly concerned about maintaining quality rather than boosting quantity after the ban imposed by the EU on Indian mango due to presence of fruit fly, Ahmed said.
He said the overall production of mango would drop to 1.42 million tonnes this year as against expectation of 1.8 million tonnes.
Punjab would produce 900,000 tonnes as compared to 1.2 million tonnes while Sindh crop size is estimated to be 550,000 tonnes as compared to 645,000 tonnes of the last season.
Source:- economictimes.indiatimes.com
Sec. 11B would be applicable to refund arising after locating a mistake of law; civil suit not maint
Excise & Customs : Refund has to claim only as per section 11B of Central Excise Act, 1944 and no civil suit cannot be instituted for refund of claim based on discovery of mistake of law
Exp. on higher education of director’s son was deductible as he committed to continue his employment
IT: Where expenditure on higher education of employee had an intimate and direct connection with assessee's business, it would be appropriately deductible, even though such an employee was son of a director
Govt. To Cut Vehicle Imports By 30 Per Cent
In what seemed to a paradigm shift in the import policy of the government, Deputy Minister of Finance, Dr. Sarath Amunugama, yesterday said that plans were afoot to cut down vehicle imports by 30 per cent in the near future and to assemble them locally.
Dr. Amunugama, who was responding an oral question raised by UNP MP Buddhika Pathirana in Parliament, said that an assembling plant was already being constructed in Polgahawela. He said that the Free Trade Agreements (FTAs) which Sri Lanka had signed with countries such as India and Pakistan would contribute towards the industry as these agreements make the importation of vehicle parts easier.
Dr. Amunugama said that Sri Lanka had imported 27,898 jeeps and cars in 2013 while 26,133 such vehicles have been imported in 2012. The number of vehicles imported in 2011 had been 56,258. The expenditure on imports which the county was forced to incur for getting down cars and jeeps in 2013 had been US $ 467 million while a sum of US $ 364 million had also been spent in 2012. The amount spent for the importation of jeeps and cars in 2011 had been $ 697 million.
The Deputy Minister said that the government had adjusted its import tax policy in order to reduce the negative impact which the vehicle importation had made to the country’s balance of payments.
Source:- dailymirror.lk
Jsw Steel Considering Iron Ore Imports To Maintain Raw Material Supplies
JSW Steel is considering the option of importing iron ore to tide over any disruption in supplies of the key steelmaking input in the next two months in wake of the recent Supreme Court order that is set to affect mining across 26 mines in Odisha. The company's decision is likely to be influenced by two favourable factors, Rupee appreciation and international iron ore prices currently at an 18-month low.
"We are assessing the option of importing iron ore to maintain our supplies. However, we are yet to take a call on the quantity of imports. The rupee has appreciated in recent days and global ore prices are at their lowest in recent months. This offers a window of opportunity," Jayant Acharya, director-marketing of the company said. In case the company decides on ore imports, it is likely to be utilized at its port-based Dolvi unit in Maharashtra. "However, imports would remain a costlier option," the official added.
While the Rupee has gained 18 per cent against the US Dollar since August 2013, riding on hope of a strong government at the Centre, international iron ore prices have on the other hand slumped to $98.5 per tonne, reaching their lowest level since September 2012 on weaker economic prospects in China.
The ban on 26 Odisha mines is expected to impact 20 million tonnes (mt) of iron ore including, 12.5 mt of merchant supplies over the next six months, according to a recent research report by Espirito Santo Securities. The state had produced 70 mt of ore from 56 mines last year (FY14) close to half the country's total output. India has been an exporter of iron ore. But continuing problems in the mining sector may force other Indian steel companies to also opt for imports this year.
"We expect supplies to be affected in Odisha so domestic steel companies could be forced to look at ore imports this year," a metals sector analyst said. Incidentally, Tata Steel was reported to have recently imported a shipload of Australian fines for testing purpose.
JSW Steel has, so far, been blending and using ore from Karnataka, Odisha and NMDC's Bacheli mines to meet its requirement, estimated at 19-20 mt per annum. The company's recent decision to participate in e-auction in Goa for the first time to purchase iron ore, is also part of a larger strategy to keep all its supply options open. For this, the company will be looking at a combination of sourcing from Goa, buying from NMDC and possible imports to avert shortfall in supplies over the next few months.
Source:- economictimes.indiatimes.com
Jewellery Stocks Gain Up To 20% As Rbi Eases Gold Import Curbs
Jewellery stocks on Thursday rose by up to 20 per cent after the Reserve Bank eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the metal to boost exports.
Shares of PC Jeweller climbed 19.98 per cent to Rs 124.30 -- its 52-week high. Tribhovandas Bhimji Zaveri stock shot-up 19.98 per cent to Rs 191.80 while that of Gitanjali Gems Ltd zoomed 18.98 per cent to Rs 108.75 on the BSE.
Similarly, Rajesh Exports jumped 15.75 per cent and Shree Ganesh Jewellery House climbed 5 per cent.
The Reserve Bank of India (RBI) in July last year had imposed severe restrictions on gold imports in order to check burgeoning current account deficit and sliding rupee.
The central bank had tied imports with exports and prescribed a 20:80 formula. Under this, an importer has to ensure that at least 20 per cent of every lot of imported gold is exclusively made available for the purpose of exports and the balance for domestic use.
This facility was available to select banks only and other entities were barred from importing the metal.
"Star trading houses/premier trading houses (STH/PTH), which are registered as nominated agencies by the Director General of Foreign Trade (DGFT), may now import gold under 20:80 scheme," RBI had said in a notification on Wednesday.
The decision to ease the restriction follows representations from jewellers, bullion dealers, banks, and trade bodies.
"Taking into account such representations and in consultations with the Government of India, it has been decided to modify the guidelines for import of gold by the nominated banks/agencies/entities," RBI said.
Source:- businesstoday.intoday.in
SC: Secured creditor couldn’t take possession of mortgaged property obtained by lessee under a valid
SARFAESI: There is no provision in section 13 that a lease in respect of a secured asset shall stand determined when secured creditor decides to take measures mentioned in section 13; without determination of a valid lease, possession of lessee is lawful and such lawful possession of a lessee has to be protected by all Courts and Tribunals
Mixed Reaction To Continuing Appreciation Of Rupee Against Dollar
Continuing appreciation of the rupee against the dollar over the last few days is evoking mixed reaction from different segments of society.
While a section of knitwear exporters is appealing for Reserve Bank of India’s immediate intervention to “limit” the rupee’s rise against the dollar so as to obtain better unit value from the exports, the importers of various goods/machinery, who include the entrepreneurs in apparel business too, wanted the rupee to appreciate further so that imports could become cheaper.
The common man, who have been crying hoarse over the rising fuel prices that resulted not only in the increase in the cost of transportation but also skyrocketed overall inflation, too are cheerful over the rupee’s appreciation against the dollar as the burden of under-recoveries for oil companies would ease and fuel prices could get reduced subsequently.
Meanwhile, the technocrats wanted the RBI and other agencies not to act in haste at this juncture considering that the balance of payment in the country still remains in the negative side.
“The RBI should opt for a balanced approach taking into consideration the nation’s overall interest taking both the views of exporters and importers,” S. Dhananjayan, chartered accountant and industry consultant here, opined.
Representing the garment exporters’ views, the Tirupur Exporters Association had written to RBI Governor Raghuram Rajan pointing out that the continuing appreciation of the rupee against the dollar could result in the export sector losing competitiveness and affect the growth of the apparel segment
Source:- thehindu.com
AO’s direction during assessment to initiate penalty proceedings deemed as valid satisfaction to lev
IT: In view of sub-section (1B) of section 271, direction given by Assessing Officer during course of assessment proceedings for initiation of penalty proceedings under section 271(1)(c) would be deemed to be a valid satisfaction recorded for initiating said proceedings
‘Infosys Technologies’ is a big co., it is excludible from comparable list of small captive service
IT/ILT: Where comparable was a big company in all respects including range of turnover, same should be excluded from list of comparables to small companies which were captive service providers having considerably low turnover
Onus lies on Department to prove that there was clandestine removal of goods by assessee
Excise & Customs : Onus lies on Department to prove that there was clandestine removal by assessee; and for that purpose, department must put forth evidence and conduct examination of witnesses and buyers to prove the charge
Co. should be wound up if it isn’t capable of doing business; HC upheld winding up of co. which lost
CL: Where a company is unable to carry on main business and is found to be unable to or incapable of undertaking any other business even in future in a commercially viable manner, substratum of company has gone and winding up petition against it is to be admitted
HC upheld 10% allowance for provisions for bad debt to rural branch after analysing population of ar
IT : In view of fact that assessee-bank was situated in rural area where population did not exceed ten thousand, Tribunal was justified in granting 10 per cent allowance to assessee in respect of bad debts claimed under section 36(1)(viia)
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