CA Terminal: 06/20/14

Friday, 20 June 2014

No business income if shares held as investment were sold at a few occasions in short span for bette

IT: Merely because assessee liquidates its investment within a short span of time, which had given better overall earning to assessee, it would not lead to conclusion that assessee had no intention to keep on funds as investor in equity shares, but was actually intended to trade in shares

Income earned by an investment co. from premature redemption of an investment is a business profit

IT : Where assessee, engaged in business of dealing in shares, debentures, mutual funds etc., earned income from premature redemption of a dividend plan, said income was liable to be taxed as business income

Expert Committee To Propose National Policy On Rubber

Government has decided to set up an Expert Committee consisting of representative of various stakeholders in the Rubber Sector to examine the issues relating to production, development and exports of rubber and related products.

"The committee will also recommend an appropriate National Policy on Rubber which will cover production, consumption and import of all types of rubber i.e. Natural Rubber (NR), Synthetic Rubber (SR) and Reclaimed Rubber (RR)," a commerce ministry statement said Friday.

The committee will examine issues relating to production, development and exports of rubber and related products and make recommendations for a broad based policy relating to all types of rubber - natural rubber, synthetic rubber and reclaimed rubber.

The expert committee would have 23 members including a joint secretary from the Department of Industrial Policy and Promotion, Rubber Board chairman, representative of state government of Tripura and Kerala.

It will be chaired by Additional Secretary (Plantations) Department of Commerce.

The committee would be serviced by the Rubber Board and has been advised to submit the draft of National Rubber Policy in an early time frame, it said.

With rise in demand for rubber from the auto sector, the need for a national policy was felt as at present the concerns of the rubber sector are being handled by two-three departments under various ministries.

India, the world's fourth largest producer of natural rubber, is dependent on imports as domestic production is short of demand.In 2012-13 fiscal, rubber production was 9,13,700 tonnes, lower than consumption of 9,72,705 tonnes, reports media.

Source:- smetimes.in

India Decline In Export From Tiruchi Airport Due To Glitches, Load Restrictions

Vegetable exports from the Tiruchi Airport has been on the decline over the past three weeks due to frequent off loading of cargo by airlines citing technical reasons and load restrictions in passenger aircraft.

Perishables constitute nearly 90 per cent of the cargo exports from the airport. Vegetables, including onions, coconuts, and drumsticks are exported from Tiruchi and neighbouring districts through the airport to Singapore, Kuala Lumpur, Kuwait, Dubai, and Colombo.

On an average, 14 tonnes of perishables were exported from here a day mostly by Sri Lankan Airlines, Air Asia, and Tiger Airways. However, daily exports have come down to 10 tonnes now as cargo consignments are off loaded frequently, often at the last minute, sources in the airport said.

In the absence of exclusive freight services, exports from the airport are “controlled” depending on the availability of space in passenger aircraft. “But of late, consignments are being off loaded and airlines cite lack of space because of full passenger load or technical reasons such as fuel load and even the strong seasonal winds,” says a representative of a forwarding agency in the city.

Normally, the Airbus A320 aircraft operated by most airlines used to carry up to 2.5 tonnes of cargo a flight. But now, most of them are able to carry only about 1.50 to 2 tonnes. At times, entire cargo consignments are left behind and some flights go without carrying any of the booked cargo, sources said.

Forwarding agents say the “uncertain situation” was posing a major problem to perishables exporters as delays could cause heavy losses.

“As they are not sure of the consignment reaching (the destination) in time, some exporters are now diverting their consignments to Kochi and other airports,” said another representative of a forwarding agency.

An official of an airline said it is the pilot’s call to decide on the quantum of cargo load to be carried in a flight. “The priority is passengers and their baggage.

Of late, most flights are running full. Sometimes air-crafts need to carry more fuel depending on climatic conditions and pilots have to take this into account too,” he said.

The cargo terminal at the airport handled a record 4,773 tonnes of cargo in 2013-14, registering 63 per cent growth over the previous year, to be ranked first among the non-metro airports managed by the Airports Authority of India. Twenty per cent growth in volume was expected this year, but this would depend on the uplift capacity of the airlines, sources said.

Source:- freshplaza.com

Government Asks Oil Companies To Draw Up Emergency Import Plan In View Of Iraq Crisis

The government has asked energy companies to prepare contingency plans for oil imports as the crisis in Iraq has put a cloud on India's second-biggest source of crude oil, while rising prices threaten to raise subsidies, stoke inflation and upset India's fiscal calculations.

Oil supply has not been disrupted and the country has adequate stocks, but officials and industry executives are worried as Brent crude oil, the most widely used international benchmark, has soared to a nine-month high of nearly $115 per barrel, government and industry officials said.

"There are clear concerns that significant supply disruption is not far off," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates, according to a Reuters report.

The government wants to make sure that there is no disruption in oil supply, which can severely unsettle economic activity. It is also concerned about the rising oil prices. Brent crude soared to a nine-month high of nearly $115 per barrel.

Oil minister Dharmendra Pradhan held a series of meetings with senior bureaucrats and top executives of Indian Oil Corp officials till late evening on Thursday on back-up plans for oil imports as Iraq, world's second-largest oil exporter after Saudi Arabia, asked US for airstrikes to fight insurgents, a senior ministry official said.

Asenior executive in Indian Oil Corp said the company has prepared its back-up plan but does not expect the effects of crisis in Iraq to spillover to India. He said Indian refiners will be hit only if the disruptions in Iraq continue for a longer time and the insurgents move toward southern part of that country that accounts for almost 70% of crude production. "We have prepared a contingency plan, which the ministry asked us to do. We do not expect any problems in India as we have a comfortable stock of 28 days," he said.

Essar Oil said there are no major disruption of crude oil supplies out of Iraq yet, since the major oil fields are in southern Iraq and the hostilities are yet confined to Northern Iraq. "We are closely watching the situation. Having said that, let me reiterate that Iraq is not a major supplier to Essar Oil. In case of disruption in supplies from Iraq, we have other supply sources from where we can meet the shortfall," acompany spokesperson said.

India imports about 25 million tonnes of oil from Iraq each year. It is the world's fourth largest oil consumer, importing roughly 80% of its crude requirements. Indian crude oil imports, which includes many grades that are cheaper than Brent crude, became costlier by about $4 a barrel to $110 per barrel in the past few weeks.

Source:- articles.economictimes.indiatimes.com

India's Energy Imports May Rise To $230 Billion By Fy23

India's annual energy import bill could jump to USD 230 billion by FY'23 from the current USD 120 billion but could get reduced significantly by switching from oil to natural gas and improving conservation, says a Goldman Sachs report.

According to the global financial services major, the country's annual energy imports in the next decade could go up to USD 230 billion from USD 120 billion currently, driven by economic growth, greater industrialisation and urbanisation.

India is facing energy challenges as the country doesn't produce enough to meet its needs. In FY14, India's net energy imports were at 6.3 percent of GDP.

Goldman Sachs report said, "India has a fifth of the world's population, but only a 30th of its energy".

It may be recalled that on July 30th 2012, India's northern electricity grid broke down due to overdrawing by states, leaving more than half of the country's population in darkness.

Measures like switching from oil to natural gas and improving conservation can reduce energy imports of the country significantly, it said.

"Reforms in the energy sector could reduce India's annual energy import bill by USD 40 billion by FY'23.

Energy imports in a reform scenario could come down to about 4 percent of GDP, from 6.3 percent of GDP currently," Goldman Sachs said.

The report further said if India improves energy efficiency by 15 percent over the next decade, it could save USD 32 billion per annum by FY23.

Energy conservation measures include reducing transmission and distribution losses, using more energy efficient appliances and stricter emission standards for vehicles.

Moreover, the reduction in energy imports as a share of GDP could improve India's current account on a structural basis, which in turn could be positive for the rupee over the medium term.

Source:- zeenews.india.com

Rupee Closes At 60.18 Vs Dollar

The rupee ended 9 paise higher at 60.18 against the dollar on continued concerns of rising global oil prices due to the violence in Iraq.

Brent crude was priced close to 9-month high of $115 a barrel on Friday on increased risks of disruption of oil supply from Iraq, which is also the second largest exporter of oil to India.

The domestic unit opened weaker at 60.24 from Thursday’s close of 60.09 per dollar at the Interbank Foreign Exchange market.

The unit declined to 60.33 on capital outflows from the domestic equity market with the BSE-benchmark Sensex ending at 25,105.51 points, down by 96 points (0.38 per cent) over its previous close.

However, it recovered to 60.14 as exporters sold dollars to book profits, dealers said. Intraday, the rupee moved in a narrow range of 19 paise from 60.14 to 60.33 per dollar.

Experts estimate the rupee to trade in the 59 to 61 per dollar range in the short term.

Call money rates, Bond yields rise

The overnight call money rate ended higher at 8.50 per cent from Thursday’s close of 7.90 per cent. The call money rates moved in a range of 7.60 per cent to 8.70 per cent.

Falling for the third consecutive day, the 8.83 per cent benchmark bond maturing in 2023 declined to Rs. 100.66 from Rs. 100.89, while its yield hardened to 8.72 per cent from a close of 8.68 per cent. Bond prices and yields move in the opposite directions.

Source:- thehindubusinessline.com

Supreme Court remanded case to Tribunal on issue of inclusion of TDS in taxable value of services

Service Tax : Where Tribunal held that in case service charges paid net of tax, TDS is includible in value liable to service tax; on full payment of demand under protest and assessee's no objection, Supreme Court remanded matter back to Tribunal

HC: In absence of sufficient cause, condonation of 775 days delay in filing of appeal to be dismisse

FEMA: Where appeal was preferred under section 54 of FERA along with an application seeking condonation of 775 days delay, in view of fact that impugned order was passed by Appellate Tribunal constituted under FEMA, provisions of section 35 of FEMA were attracted and period of limitation for filing appeal could not be extended beyond 120 days

TPO couldn’t make independent evaluation of STPs of assessee to fix ALP of software services rendere

IT/ILT : Where in transfer pricing proceedings, TPO made addition to assessee's ALP in respect of software development services rendered to AE by benchmarking each STP unit of assessee on stand alone basis, in view of fact that profit of each of STP units of assessee company could not be evaluated independently of one another, they could not be segregated and therefore, impugned addition deserved to be deleted

ITAT distinguishes Ruling of Steria; uses MFN clause to import 'make-available' clause in India-Fran

IT : Where assessee, a branch office of IATA, Canada, made payment to a French Company for providing BSP link whereby manual operations such as issue of debit notes/credit notes, issue of refund, billing statement and all information relating to air tickets were carried out electronically, in view of fact that by rendering said link services French company did not make available to agents/Air lines including assessee any technical knowledge, experience, skill, know-how or processes so as to enab

Entity publishing medical research work to improve quality of health care programmes is entitled to

IT : Where assessee-society, registered under section 12A, carried out techno medical research in collaboration with international organizations like WHO, UNICEF etc. and its research report were published in Medical journals, said activity being in nature of 'education' fell within scope of section 2(15) and, thus, assessee's claim for exemption of income was to be allowed

Tribunal couldn’t doubt validity of search and seizure if appeal was made against block assessment

IT: Power of search and seizure is an administrative power and not a quasi-judicial power; in appeal against block assessment, Tribunal cannot pass an order only on search and seizure

Penalty upheld as VAT returns were filed by assessee after lower VAT payment on sale of granite

CST & VAT : Where Intelligence Officer having noticed that in respect of sale of granite assessee had paid tax at rate of 4 per cent in place of 12.5 per cent issued upon him a notice on 12-7-2010 proposing to impose penalty under section 67 of Andhra Pradesh Value Added Tax Act, 2003 and thereupon assessee filed revised return on 9-8-2010 and paid differential tax with interest and settlement fee under second proviso to section 25(1), in peculiar facts of case Intelligence Officer was justified

HC directs ITAT to examine validity of block assessment notice under sec. 158BD without remanding ca

IT : Where in course of appellate proceedings, assessee raised an additional ground challenging validity of notice issued under section 158BD, in view of fact that said issue could be decided on basis of material on record, Tribunal was to be directed to dispose of same on its own without remanding matter back to Commissioner (Appeals)

SEBI proposes 25% min public shareholding for PSUs and relaxation of min dilution criteria for small

SEBI : SEBI BOARD MEETING - Reforms in The Primary Market, Revisiting the Minimum offer to Public Norm under Rule 19(2)(b) of Securities Contracts (Regulation) Rules, 1957 & Minimum Public Shareholding for Public Sector Undertakings Under Securities Contracts (Regulation) Rules, 1957, etc.

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