CA Terminal: 10/09/14

Thursday, 9 October 2014

No depreciation to assessee against income from house property as standard deduction was available o

IT : Where rent received by assessee from leasing of business centre was treated as 'income from house property', assessee's claims for deduction of depreciation and administrative expenses against rental income could not be allowed

HC treated deposit in bank as unexplained money when assessee failed to show it as a business transa

IT: Where assessee declaring income from salary and interest, was found in possession of certain cash, in view of fact that assessee failed to bring any evidence on record in support of his explanation that said amount belonged to his business transactions, AO was justified in adding same to assessee's taxable income as unexplained money

Sumitomo Rubber To Put $100 Million Into South African Factory

Sumitomo Rubber Industries will ramp up production capacity at its South African factory in a 1.1 billion rand ($100 million) investment, having identified long-term potential in the region.

The Japanese tire maker officially opened the new head office of Sumitomo Rubber South Africa last week and announced its plans for the investment. The factory to be expanded is in the southeastern province of KwaZulu-Natal. Sumitomo Rubber bought the factory from Indian peer Apollo Tyres in December 2013, and the 310,000-sq.-meter site has room for more facilities.

Production output is currently 9,600 tires a day. The company will first boost daily output to 12,200 tires in 2016, and eventually to 14,500 tires in 2017, 50% more than the 2013 rate. It will also produce tires for sport utility vehicles, which are popular locally.The company will export tires from the factory to all of Africa under the Dunlop brand. It hopes to increase tire sales in Africa to 34 billion yen in 2015 and 57 billion yen in 2020.

Sumitomo Rubber holds the world's fifth-largest market share in tires. It plans to raise the portion of sales generated in developing countries to 14% in 2015, from 11% in 2013. Last year, the company opened a factory in Brazil. In Turkey, it is building a 40 billion yen joint venture factory set to open next summer. It is planning facilities in Russia and India as well.

Source:- asia.nikkei.com

India Needs To Scrap Iron Ore Export Tax As Prices Sink - Miner Sesa

India needs to swiftly remove a tax on iron ore exports, the country's top private miner of the commodity said, calling the duty an "economic barrier" in the face of falling global prices.

The country's iron ore shipments have already slowed to a trickle after a ban on mining in key producing states, with a 30 percent tax on exports making it even more difficult to sell to a world market where prices have sunk 40 percent this year.

"There is an urgent need to eliminate the export duty, which represents an economic barrier to mining in the current low price environment for low grade iron ore fines," Tom Albanese, chief executive of Vedanta Resources (VED.L) that controls Sesa Sterlite Ltd (SESA.NS), told Reuters in an email.

Sesa hopes to restart mining in Goa early next year after a decision by the Supreme Court in April 2014 to lift a 19-month mining ban in the state aimed at weeding out illegal miners.

But with global iron ore prices sliding, it makes more sense for miners there to sell to local steelmakers than export. Mining curbs have also forced some Indian steel producers to import iron ore.

The problem is that the iron ore produced in Goa is of little use to Indian steelmakers, many of whom lack the sophisticated plants needed to process the low-grade material.

"Amidst low export revenue and high taxes within the country, it is very difficult for these miners to sustain operational profits," said Prakash Duvvuri, head of research at Indian consultancy OreTeam.

The 2015 restart for Sesa's operations in Goa, previously India's top exporting state, indicates months of delay versus initial expectations for a restart in September.

"Based on recent public comments by the government of Goa, it's now probably realistic to assume mining to start by January to February at the earliest," Albanese said in the email late on Tuesday. Albanese was previously the CEO of Rio Tinto (RIO.AX) (RIO.L), but quit the mining giant last year after the company revealed a $14 billion writedown.

Rio on Tuesday said it rejected a takeover approach from smaller rival Glencore Plc (GLEN.L) that would have created a $160 billion mining and commodities behemoth, a proposal Glencore made in July as prices of Rio's top moneymaker iron ore headed to five-year lows.

A surge in global supply, led by top producers Australia and Brazil, has depressed iron ore prices this year to their weakest since September 2009 at around $80 a tonne.

That has pushed many smaller producers from Asia to South America out of the market as big, low-cost miners like Vale (VALE5.SA), Rio Tinto (RIO.AX) (RIO.L) and BHP Billiton (BHP.AX) (BLT.L) dominate.

Before the sustained slump in global iron ore prices, Sesa was targeting a six-fold jump in output in the year to March 2015 after the Goa ban was lifted. Sesa's mining operations are mostly in Goa.

India used to be the world's No.3 exporter of the steelmaking ingredient until higher costs along with mining bans in key states Goa and Karnataka slashed shipments. India's exports to top market China stood at 7.5 million tonnes over January-August, ranking ninth, behind Chile and Malaysia.

Along with existing high taxes and freight charges, India is also planning to increase the royalty on iron ore - or the percentage of sales paid to state governments - to 15 percent from 10 percent. The high costs, Duvvuri said, might force smaller miners in Goa to either sell their mines or close down.

"As far as fresh mineral extraction is concerned, it's not viable at all. So it's not a question of what are the margins. Margins are not there," said Ambar Timblo, managing director of Goa-based miner Fomento Resources.

Source:-in.reuters.com

Indian Rupee Opens Lower At 61.15 Per Dollar

The Indian rupee opened lower by 10 paise on Friday at 61.15 per dollar versus 61.05 Thursday.Pramit Brahmbhatt of Veracity said, "Today investors are likely to trade cautiously ahead of vital macro data. Rupee is expected to trade rangebound to slightly weak taking cues from strong dollar. See rupee ranged between 60.60-61.40/dollar."

Euro on the back foot having come under renewed pressure overnight after weak German data raised fears of a recession in Europe's largest economy. Dollar index is around the 85 mark.

Source:- moneycontrol.com

Services of Customs House Agent and Shipping Agent availed for export of goods were eligible input s

Cenvat Credit : 'Customs House Agent Service' and 'Shipping Agents and Container Services' for purposes of export are eligible for input service credit; but, services of overseas commission agent are not so eligible.

HC dismissed winding-up of respondent as it had produced docs to prove rejection of goods supplied b

CL : Where petitioner filed a petition seeking winding up of respondent company contending that it paid only a part of purchase consideration of goods, in view of fact that respondent produced rejection note, debit note and carrier's receipt to contend that goods had been rejected and returned to petitioner, disputed questions of fact arose which would require parties to lead evidence on issue of genuineness of those documents, and, thus, instant petition was not maintainable

ITAT adopts interest rate of corporate bonds to determine ALP of interest on loans granted to AEs

IT/ILT : Where assessee proposed interest rate to be charged at rate of 8.9 per cent on interest-free loan advanced to its subsidiary company to determine ALP, there being lower risk involved it was reasonable

CBDT notifies I-T authority that shall possess power to demand info/docs from assessee for an enquir

IT : Income-Tax (Tenth Amendment) Rules, 2014 – Insertion of Rule 12D

CBDT relaxes limit on existing manpower so transferred in new SEZ units; raises limit from 20% to 50

IT : Section 10A, Read with Section 10AA of the Income - Tax Act, 1961 - Free Trade Zone - Clarification on Allowability of Deduction Under Section 10A/10AA on Transfer of Technical Manpower in Case of Software Industry

Full depreciation allowed on windmills as Electricity board affirmed beginning of operations for mor

IT : Where by State Electricity Board certified that assessee had generated power by using windmills for more than 180 days in relevant year, depreciation at full rate of 80 per cent was to be allowed on those windmills

Tribunal couldn't give conclusive finding during initial stage of proceedings if case was arguable

Excise & Customs : Tribunal cannot render conclusive finding at prima facie stage; when case is arguable (as against absence of any explanation/document, at all), pre-deposit must be balanced so as to preserve assessee's right of appeal as well as protect interests of Revenue

No detention of vehicle if its driver didn’t surrender its earlier transit pass at exit check post

CST & VAT : Where assessee was carrying in a vehicle LPG from Mangalore to Madurai and officer-in-charge of entry check post of Kerala State detained goods and vehicle for reason of a transit pass issued earlier for very same vehicle not having been surrendered at exit check post, for above reason no detention could be made

Incentive given to distributors under sales promotion scheme couldn’t be held as commission to attra

IT : Where assessee offered incentive to distributors/stockists on meeting of sales target on principal to principal basis, that incentive could not be treated as commission payment under section 194H

Wait-listed candidate to be appointed as member of ITAT as vacancy arose when vigilance clearance de

IT : Where in course of examination for appointment of Members of Tribunal, petitioner was placed in waiting list but his appointment was not confirmed on account of contention made by Union of India that it would make suitable amendment in Rules for said purpose, in view of fact that fresh selection process was started without making any such amendment in Rules, instant petition was to be allowed with a direction to consider appointment of petitioner on basis of his position in waiting list

Mere default of supplier in payment of taxes doesn’t lead to denial of input credit to purchaser of

CST & VAT: Where Assessing Authority, after making enquiry, was satisfied that transaction of purchase was genuine one, then merely because of selling dealer had not remitted tax recovered from assessee, would not enable Assessing Authority to deny benefit of input tax credit to assessee

CIT couldn’t exercise revisionary power if AO accepted book profit for MAT purposes after reducing p

IT: Where Assessing Officer accepted book profit under section 115JB, no revision under section 263 could be done on ground that prior period expenditure had been reduced while computing book profit

HC denies input tax credit as assessee had only taken bills from supplier without physical delivery

CST & VAT : Where assessee claimed input tax credit on goods purchased from one 'S', since there was no movement of goods from 'S' to assessee and it was only billing activities, assessee was not entitled to input tax credit

Payment of interest/penalty in first instance does not lead to waiver of penalty as waiver is at dis

IT : In order to qualify for relief under section 273A, question of making payment of penalty and interest in first instance can not arise because if such a construction is adopted, object of conferring discretion on Commissioner itself would be defeated

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