IT : Wherein regular course of its money lending business assessee - NBF had advanced loans to sister concerns/related parties, bad debts cannot be disallowed on ground of violation of RBI's guidelines
Monday 24 November 2014
CII had to be taken from the date when asset was held by previous owner for computing cost of inheri
IT: In case of inheritance, cost of acquisition of asset should be calculated on basis of cost of acquisition by previous owner and it has to be indexed according to Explanation (3) to section 48
CBDT's instruction for min tax effect for filing of appeal by dept. is applicable to pending cases a
IT : Instruction No. 5/2014, dated 10-7-2014 revising monetary limit to Rs. 4 lakh for filing appeal before Tribunal would apply to pending appeals as well
Marketing or promotion of products of foreign principal in India would amount to export of service
Service Tax : Marketing/Promotion in India of products belonging to foreign principal amount to export of services and is not liable to service tax
Marketing or promotion of products of foreign principal in India would amount to expert of service
Service Tax : Marketing/Promotion in India of products belonging to foreign principal amount to export of services and is not liable to service tax
No petition before CLB alleging transfer of co's property if transfer was made prior to 3 months of
CL : Where alleged transfer of company's property took places 5 years back, CLB had no jurisdiction to entertain section 397/398 petition as it was time barred being beyond 3 months prior to filing of petition
ITAT computes ALP of interest on advance made to affiliates on basis of interest rate on deposit mad
IT/ILT : Where payment was made to non-resident abroad for services rendered abroad, no TDS liability would arise
Solitary transaction of sale and purchase of land couldn't be termed as 'adventure in nature of trad
IT : Solitary transaction of sale and purchase of land couldn't be termed as 'adventure in nature of trade'
Development Commissioners not to insist on fresh application from SEZ units for services already app
SEZ : Uniform List of Services to be followed in Special Economic Zones
India's Oct. Polished Exports -15%
India’s polished diamond exports fell 15 percent year on year to $2.219 billion in October, data published by the Gem and Jewellery Export Promotion Council (GJEPC) showed. By volume, exports dropped 16 percent to 3.786 million carats, while the average price of the exports rose 2 percent to $686.78 per carat.
Polished imports to the country increased 3 percent to $600 million during the month. As a result, net polished exports, representing the excess of exports over imports, declined 20 percent to $1.619 billion.
India’s rough imports fell 17 percent to $1.006 billion in October and rough exports slumped 37 percent to $107 million. Net rough imports, or rough imports minus exports, declined 14 percent to $899 million. India’s October net diamond account, representing the excess of total exports of polished and rough over total imports, fell 26 percent to $720 million.
During the first 10 months of the year, India’s polished exports rose 2 percent to $19.199 billion, while polished imports grew 2 percent to $6.210 billion. Net polished exports increased 3 percent to $12.989 billion.
India’s rough imports rose 7 percent to $14.557 billion during the 10-month period, and rough exports fell 19 percent to $1.295 billion. Net rough imports increased 11 percent to $13.263 billion.
India’s net diamond account fell to a deficit of $274 million during the 10-month period, compared to a surplus of $704 million in the same period a year earlier.
Source:diamonds.net
Essar Steel Raises $1 Billion Via Export Securitization
Essar Steel India Ltd has raised $1 billion through long-term export securitization to prepay existing rupee debt, the company said on Monday.The company had earlier raised $1 billion through external commercial borrowing (ECB) route.
“With this financing, the company has dollarized $2 billion of its debt which has led to significant benefits,” company said in a statement. “These include reduction in the average interest cost from rupee linked rate to dollar linked rate which has resulted in a large interest saving of approximately Rs.720 crore annually, and elongation of the average maturity of its debt from 3.5-6.75 years.”
Essar Steel is the fourth largest Indian steel maker with a capacity of 10 million tonnes at its integrated steel making facility in Hazira in Gujarat.
Source:livemint.com
Rule 8D can't be invoked in absence of any nexus between borrowed funds and tax free investments
IT : In order to bring any interest expenditure claimed by assessee under ambit of Rule 8D(2)(ii), it will have to be demonstrated by Assessing Officer that said interest is not directly attributable to any particular income or receipt
Clarification of DGFT have precedence over clarification issued by CBEC in matters of foreign trade
Excise & Customs : Opinion/clarification of DGFT is binding on customs so far as classification of any item in ITC (HS) or schedule of DEPB Rates, etc. is concerned under Foreign Trade Policy; DGFT clarification would have precedence over clarifications by CBEC
Vw India Begins Exports Of Polo To Mexico
Volkswagen India has expanded its export operations. With the market introduction of the new Polo in Mexico since the beginning of November this year, the carmaker has begun shipping its new Polo hatchback, which is manufactured at the Volkswagen Pune Plant, to Mexico. The Polo becomes the second model, after the Vento, which is exported to Mexico from India. The export versions of the Vento and the new Polo together account for nearly every second car produced at the Pune Plant.
According to Mahesh Kodumudi, president and managing director, Volkswagen Pune Plant and chief representative, Volkswagen Group India, “With the successful entry in Mexico last year with our Vento, we set an example of world-class quality being manufactured in India. With further expansion into the Polo segment, we have reiterated the fact that we are able to manufacture top products through our Indian operations.” He added, “We build the same quality of cars in Pune as around the world with equally robust construction. The Polo built in India has achieved a 4-star Global NCAP rating which is a strength when it comes to exporting to global markets.”
Volkswagen India began exporting cars from its Pune Plant in 2011 with the first export market being South Africa. Since then, the export operations of Volkswagen India have expanded to over 32 countries across three continents of Asia, Africa and North America. The range of cars being exported includes left-hand drive as well as right-hand drive cars. Additionally, Volkswagen India also exports parts and components of its cars to Malaysia which are assembled there for the Malaysian domestic market. The Volkswagen Pune Plant has produced over 89,000 cars for export till date.
Source:autocarpro.in
Spurt In Gold Imports Widens C/A Deficit
While record low oil prices have provided relief to the Indian government — which is struggling to reduce the current account deficit — soaring gold imports, have resulted in a sudden spurt in the trade deficit in October.
According to commerce ministry figures, released last week, the trade deficit went up to $13.3bn in October, up from $10.6bn a year ago. The deficit for the seven-month period (April-October) is slightly lower at $83.75bn as against $87.31bn in the corresponding period in the previous fiscal.
Ominously, gold imports shot up by a phenomenal 280pc in October to $4.17bn, from $1.09bn in October 2013. The deficit widened substantially despite a 19pc fall in oil imports to $12bn. Crude and gold are the two biggest import items in India.
India’s exports also fell by 5pc to $26bn — even as imports grew by 3.6pc to $39bn — with sectors such as engineering goods, pharmaceuticals and cotton yarn performing badly. Non-oil, non-gold imports also went up by 6pc to $22.9bn.
India’s current account deficit (CAD) fell to $32.4bn (1.7pc of GDP) in fiscal 2013-14, from a record high of $87.8bn (4.7pc of the GDP) in the previous fiscal, thanks to a contraction in trade deficit and an increase in net invisible receipts.
In the first quarter of the current fiscal, the CAD fell to $7.8bn (1.7pc of GDP) from $21.8bn (4.8pc) a year ago. In the second quarter though, it was up at $14.2bn. Analysts, however, expect the CAD to be lower at the end of the current fiscal.
An economist for Nomura India expects that the CAD would be contained at around 1.4pc of the GDP by the end of March 2015.
Citigroup, however, believes the CAD would be slightly higher than last year’s figure. “We maintain our view of FY15 CAD at $36.7bn (1.8pc of GDP), with risks balanced,” says a research note by Citigroup.
While admitting that exports could be weaker because of weak demand in Europe and China, the leading financial services group noted that India’s healthy foreign exchange reserves position (at over $315bn), combined with the promised reforms across several sectors would stabilise the Indian economy.
With the CAD unlikely to rise substantially from the level of $32.4bn seen at the end of the previous fiscal, the Indian currency is also expected to remain stable at levels of Rs62-63.
The CAD had shot up to $87.8bn at the end of fiscal 2012-13 following a spike in oil prices and soaring demand for gold. The government then imposed restrictions on gold imports by hiking the import duty from 2pc to 10pc. This had the desired effect as imports of the yellow metal slowed down, easing the trade deficit.
THE recent spurt in gold imports is, however, causing worries to the government which could tighten the curbs on imports of the yellow metal. India’s gold imports rose to 143 tonnes in September and topped 150 tonnes a month later on the eve of the festive season. Traditionally, gold consumption soars in India in September and October on the eve of Diwali and other festivals.
According to the World Gold Council (WGC), India regained its position as the world’s largest consumer of gold in the third quarter of 2014, overtaking China once again. During the July-September quarter, India bought 225.1 tonnes of gold in jewellery, coins and bars, as against 182.7 tonnes bought by China. India’s total gold consumption adds up to more than 900 tonnes a year.
Demand for gold jewellery shot up by 60pc in the quarter to 189.2 tonnes. With gold prices having fallen significantly in recent months, consumers went on a buying spree, hoarding up jewellery.
Government officials have been in talks with the Reserve Bank of India (RBI) about additional measures to be taken to curb gold imports. But officials acknowledge that increasing duty on gold imports could result in a spurt in smuggling.
Ever since the government imposed a 10pc duty on gold, there has been a significant rise in gold smuggling. Organised gangs deploy carriers who travel abroad and return home — mainly to the non-metro international airports — loaded with the yellow metal, which is concealed in their bodies or in their personal baggage.
The WGC estimates that about 200 tonnes of gold was smuggled into the country last year. But the authorities have also cracked down on the trade. The Directorate of Revenue Intelligence (DRI) has reported a 330pc increase in seizures; it made 2,150 seizures of gold worth Rs6bn in the first six months of the fiscal.
Earlier this year, the government eased curbs on ‘star trading houses’ — who export jewellery — to import gold directly. A ban had been imposed on these imports in July 2013 when gold imports had risen sharply.
The All India Gems and Jewellery Federation is opposed to the government introducing new curbs on imports. Last week, it urged the government and the RBI not to impose new curbs, which could ‘spell doom for the gems and jewellery sector.’
According to Haresh Soni, the federation chairman, the sharp increase in gold imports in September and October was because of the low base effect. In September and October 2013, gold imports were low, but this year they have returned to the normal, pre-festive season levels, giving the impression that there has been a substantial increase in imports, he argues.
The federation has also asked its members to stop selling gold coins and bars, once their sale exceeds 300 tonnes as part of a self-regulatory initiative. It also wants the government to reduce import duty on the yellow metal to 2pc to reduce smuggling.
Source:dawn.com
Rupee Gains 8 Paise Against Dollar In Early Trade
The rupee strengthened by eight paise to 61.68 against the dollar in early trade today at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks amidst sustained foreign capital inflows.
Forex dealers said apart from increased selling of the American currency by exporters and banks, the dollar's weakness against
some currencies overseas, supported the rupee. A higher opening in the domestic equity market, which soared to new highs, too supported the rupee, they added.
The rupee had strengthened by 18 paise to end at 61.76 against the Greenback on Friday on suspected selling of the US dollar by state-run banks on behalf of the RBI and a strong rally in local stocks.
Meanwhile, the benchmark BSE Sensex spurted by 180.35 points, or 0.63 per cent, to hit another record-high of 28,514.98 points in opening trade today.
Source: economictimes.indiatimes.com
SC: 'BIFR' is sole authority to decide whether a sick company can be moved out of its jurisdiction
CL : After a reference is registered by BIFR, all throughout subsequent stages, BIFR has complete supervisory control over affairs of a sick industrial company till it is revived or decision to wind up such company is taken
HC upheld concealment penalty on assessee as it had filed nil return without paying the MAT liabilit
IT : Where assessee filed nil return and failed to compute book profit and pay MAT, which it was liable to pay, levy of penalty was justified
ITAT lays down criteria for selection of accounting method in construction projects
IT : In order to compute income from construction projects, method of accounting has to be selected keeping in view transfer of significant risks and rewards of ownership coupled with absence of uncertainty associated with realization of revenue, so that sale can be said to have taken place
ITAT had rightly set-aside time-barred assessment under sec. 144 after considering facts of the case
IT: Where Tribunal on appreciation of facts came to conclusion that order passed under section 144 read with section 251 was time-barred and cancelled same; conclusions reached by Tribunal could not be interfered with
Postal endorsement that there was nobody in factory neither amounted to refusal nor as closure of fa
Excise & Customs : Endorsement by postal authority that 'there is nobody in factory' cannot tantamount to refusal of assessee nor that can be read as factory is closed; hence, authority/Tribunal must take fresh steps to ensure service as per law
Units manufacturing diverse products with separate machinery were independent units; sec. 80-IB avai
IT : Where assessee company's both units manufacturing different products, having different machinery, assessee would be entitled for deduction under section 80-IB
No rejection of books due to non-issuance of cash memo on every sales as assessee was issuing one me
IT : Books of account of assessee could not be rejected on sole ground that only one consolidated cash memo was issued at end of day as it is not necessary that a cash memo is required to be issued for each and every sale
Discount given to customer via credit note could be claimed as deduction even if it wasn't shown in
CST & VAT: Where assessee issued credit note to customer subsequent to issue of sale bill and claimed deduction of same as discount given to customer, it was permissible for assessee to show discount given by a separate credit note subsequently and claim deduction even though discount was not shown in sale bill
HC quashed proceedings for violation of CIS norms by director as she had ceased to be a director on
SEBI: Proceedings for violation of CIS Regulations by director of agro-company were to be quashed if she had ceased to be director on date of offence
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