IT : Section 40(a)(ia) not applicable where assessee had not deducted tax at source as it was well aware that recipient had no taxable income, though declarations in Form 15G/H were obtained late
Thursday 18 December 2014
No income arises on allotment of shares at concessional rate till expiry of lock-in-period on such s
IT : Where shares were allotted at concessional rate, no income would accrue or arise until expiry of lock in period
No TDS on reimbursement of exp. to holding-co. when tax was already deducted by it while making paym
IT : Where taxes have been deducted at source in respect of expenditure incurred by holding company, no disallowance can be made with reference to such expenditure in hands of subsidiary company while reimbursing same to holding company
HC nods to capital reduction scheme approved by majority shareholders as it wasn't prejudicial to cr
CL: Where reduction of share capital was approved by majority shareholders and did not involve any cash outflow to prejudice rights of creditors, same was to be confirmed
Tribunal can entertain applications for rectification of mistake under service tax laws as well, rul
Service Tax : In view of section 86, of Finance Act, 1994, section 35C, of Central Excise Act, 1944 dealing with filing of applications for rectification of mistakes before Tribunal, is applicable to service tax; hence, such applications are maintainable under service tax as well
Mere cryptic communication on denial of refund isn't an order; HC directs department to pass speakin
Excise & Customs : Refund cannot be denied by mere cryptic communication, which cannot be termed as an order dealing with and disposing of a refund application; hence, department was directed to pass a speaking order on refund claim
No reassessment after 4 years on basis of Apex Court's decision in absence of failure of assessee to
IT : Beyond a period of four years from end of relevant assessment year, assessment could not be reopened to recompute deduction under section 80HHC on basis of a subsequent decision
SEBI issues consolidated circular on web based compliant system 'SCORES'
SEBI : Redressal 0f Investor Grievances through SEBI Complaints Redress System (SCORES) Platform
ITAT deletes TP adjustment as TPO hadn't taken any comparable for benchmarking international transac
IT/ILT : Where TPO had not taken any comparable for benchmarking international transaction of assessee and TPO had not mentioned anything against benchmarking of this international transaction by assessee, TP adjustment by taking ALP at nil was to be deleted
A person couldn't be considered as member of the Co. until his name was registered in register of me
CL : Name of person has to be entered in register of members in order to become member strictly as per section 41
Purchase of underperforming mutual fund at higher price by trustee of said fund was allowable as bus
IT : Where assessee-bank earned tax free income in form of dividends, interest on tax free bonds etc. since said income was directly credited to assessee's account by way of bank transfer, impugned disallowance made by revenue authorities representing 2 per cent of gross total income on account of expenditure incurred in realising said income was to be deleted
Railways prescribes 30 days time limit for delivering service tax certificates on customer's request
ST LAWS : Service Tax Certificate for Transportation of Goods by Rail (STTG Certficate)
CBEC revises alpha-numeric codes for Commissionerates; increases code-string to accommodate more ord
EXCISE & CUSTOMS LAWS/ST LAWS : Amendment To Cestat Appeal Forms
No sec. 69 addition on basis of DVO’s report in absence of any evidence of unexplained investment
IT : In absence of any evidence of unexplained investment, registered valuer's report, as submitted by assessee, cannot be rejected and addition cannot be made under section 69 on basis of DVO's report
AO to reconsider whether penalty could be imposed due to incomplete declaration form accompanied wit
CST & VAT - Rajasthan Sales Tax : Where Appellate Authorities deleted penalty imposed under section 78(5) holding that penalty could not be imposed on plea that declaration form ST-18-A was found blank or not completely filled up, if other supporting bills, etc. were found in order, matter was restored back for deciding afresh
Department can withhold VAT refund after hearing assessee and complying with conditions to withhold
CST & VAT: Orissa VAT : Before passing an order under section 60(1) of Orissa VAT Act withholding amount of refund due to dealer, three conditions contained therein are to be satisfied and opportunity of hearing should be afforded to dealer
Sec. 110A of Customs dealing with provisional release of seized goods isn't applicable for Central E
Excise & Customs : In absence of any reference to section 110A of Customs Act in notification issued under section 12 of Central Excise Act, 1944, said section 110A of Customs Act dealing with provisional release of seized goods/things is not applicable for Central Excise purposes
Interest received from debtors isn't excludible from profits of industrial unit to compute secs.80-I
IT : Where business in question is continuation of existing business and not a new business and interest expenses was neither treated as pre-operative expenditure, nor had been capitalised, it would be allowed
No disallowance of interest under sec. 14A if borrowed funds were used in business and not for makin
IT : Where borrowed funds were used for business purposes and no part thereof was used for making investment, interest expenditure could not be considered for proportionate disallowance under rule 8D
Dri Unearths Rs 29,000 Cr Coal Import Scam
The Directorate of Revenue Intelligence has unearthed a scam involving companies inflating the value of coal imports from Indonesia for their power plants thus siphoning money abroad.
Initial estimates by the agency pegged the overvaluation at Rs 29,000 crore in the period 2011-2014. DRI has raided over 80 shipping companies, intermediaries and laboratories across the country including, Maharashtra, Delhi, Gujarat, Karnataka, Andhra Pradesh, Odisha, West Bengal and Kerala in search of documents that show the real value of the imports. Almost all laboratories testing coal in India have been searched by the DRI to obtain the lab reports for verification of the calorific value of the imported coal.
The overvaluation also has an impact on the tariff paid by consumers here as power companies could have a higher tariff fixation based on the inflated rates. DRI is also investigating some of the public sector companies that have indulged in overvaluation. The overvaluation of the imported coal has a direct effect on the tariff fixation. In other words, the power tariff would be less - possibly Re 1 per unit - if the value of imported coal value was not inflated.
An official said that almost every importer, including the reputed corporates, have indulged in overvaluation of coal imports. DRI is learnt to have recovered documents showing the real value of the imports. Indian companies including public sector ones imported 77 million tonnes of coal from Indonesia, in the financial year 2012-13.
Industry sources estimate that around 12 crore MT of coal has been imported from Indonesia in the year 2012-14. The sources added that the imported coal from Indonesia is overvalued to the extent of at least two times the actual value declared in the country of origin.
The modus operandi adopted by the companies is that while coal imports would directly be shipped from Indonesia, the invoices will be routed through an intermediary based either in Hong Kong, Singapore or Dubai. "The inflated amount will be sent to the intermediary who, in turn, would remit the actual value to the Indonesian supplier. The overvalued component would be diverted to tax havens,'' the source said. The intermediary is either related to the importer or handles such operations on commission basis, sources said.
DRI has found that the companies did not avail of the Preferential Trade Agreement that extended concessional duties for imports from Indonesia. Steam coal imported from Indonesia attracts zero rate of duty and the companies are required to produce country of origin certificate issued by the supplier. "The companies did not avail of this facility because in such a scenario, the companies would have to produce the certificate which would carry the real value,"' the source added.
Source:timesofindia.indiatimes.com
Scrapping 80:20 Gold Import Rule: When The Govt Prevailed Over Rbi
When restrictions on gold import were imposed in August 2013 by introducing the 80:20 rule, the decision was jointly taken by the previous United Progressive Alliance (UPA-II) government and the Reserve Bank of India. The rule essentially mandates traders to export 20% of their all gold imports.
“Taking into account all these representations and in consultation with the Government of India, it has been decided to issue the following clarifications/modifications in supersession of all the earlier instructions,” the RBI circular issued on August 14, 2013, had said. The decision was aimed to tackle the widening current account deficit amid a worst ever currency crisis since the balance of payment crisis of 1991.
In the last week of November, while announcing that the 80:20 principle was scrapped, the central bank distanced it from the decision and acted just as a messenger.
“It has been decided by the Government of India to withdraw the 20:80 scheme and restrictions placed on import of gold,” the November 28 notification from the RBI said.
Clearly, the central bank was not a party to the withdrawal decision, as the notification clearly said it was decided by the government of India, unlike the previous statement when the decision was taken in “consultation” with the government.
Various restrictions on gold import, apart from hiking import duty, resulted in imports dropping to nearly 70% during the second half of 2013 to about 90 tonnes per quarter as against an average of 225 tonnes in the previous eight quarters, according to a report by rating agency ICRA. The move also forced a few jewellers to scale down expansion plans.
Import of the yellow metal is once again rising which could be a matter of concern for the central bank.
Gold imports surged to 151.58 tonnes in November, an increase of 38% from 109.55 tonnes a month earlier, trade ministry data showed on Tuesday.
Data released on Monday showed gold imports surged in value terms in November to $5.61 billion, helping push the trade deficit to an 18-month high.
The demand for gold jewellery witnessed a spike in recent times after RBI allowed premier and star trading houses to import bullion under the 80:20 rule in May.
A sharp rise in gold imports and a fall in export growth has already pushed the country’s current account deficit (CAD) to $10.1 billion or 2.1% of gross domestic product (GDP) during July-September second quarter, as compared to $7.8 billion or 1.7% of GDP in the first quarter ended June. RBI may have seen what is coming and was therefore not willing to scrap the restrictions completely.
Some analysts have upped their CAD projections for the current financial year. Japanese broking firm Nomura for example, now sees CAD at 1.6% of GDP as compared to 1.3% projected earlier. RBI 's comfort zone for CAD is 2.5% of GDP.
Source:business-standard.com
Rupee Strengthens 37 Paise Against Dollar To 63.25 On Fed Cues
The Indian rupee, equities and bonds rallied on Thursday after the US Federal Reserve said it is in no hurry to raise interest rates.
The rupee, which fell to a more than 13-month low on Wednesday, strengthened against the dollar following stock market cues, even as a broad-based dollar rally dragged down other Asian currencies. The cabinet clearing the goods and services tax (GST) Bill on Wednesday also boosted sentiment.
At 2.01pm, the Indian rupee was trading at 63.25 a dollar, up 0.59% from its previous close of 63.62. The local currency had opened at 63.36 a dollar. India’s benchmark equity index, S&P BSE Sensex, was trading at 27,102.62 points, up 1.47%.
Asian currencies were trading mixed against the dollar. The South Korean won weakened 0.68%, Taiwan dollar fell 0.34%, China renminbi was down 0.30%, and Singapore dollar slipped 0.22%. However, the Indonesian rupiah rose 0.83%, Malaysian ringgit was up 0.46% and Japanese yen strengthened 0.10%.
The yield on India’s 10-year benchmark bond stood at 7.924% compared with its Friday’s close of 7.971%. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has weakened 2.3% against the dollar, while foreign institutional investors have bought $16.84 billion from local equity markets and $26.09 billion from the debt market.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 89.131, up 0.01% from its previous close of 89.13.
The cabinet cleared the Bill to ease implementation of GST that aims to unify India into a common market by replacing taxes imposed by states and the Centre. This clears the way for the introduction of the draft legislation in the winter session of parliament, where it needs two-thirds majority in both houses to be cleared.
Source:livemint.com
RBI asks AD Category-I banks to make correspondence in respect of rupee drawing arrangement with reg
FEMA/ILT : Rupee Drawing Arrangement – Delegation of Work to Regional Offices- Submission of Statements / Returns
RBI asks Indian agents to make correspondence in respect of Money Transfer Service Scheme with regio
FEMA/ILT : Money Transfer Service Scheme– Delegation of Work to Regional Offices- Submission of Statements / Returns
Mere procedural non-compliance on export of goods wouldn't lead to demand of duty if export was evid
Excise & Customs : In case goods are finished and exported, question of demand of duty does not arise even if department alleges wrong classification and/or non-preparation of proper export documents, provided export is otherwise evidenced
Act of Drug Association of discounting supply of medicines to un-authorised stockist was anti-compet
Competition Law: Where CDAG forced pharmaceutical companies to discountinue supply through non-authorised stockist like informant, CDAG limited and restricted supply of medicines in market and, thus, was carrying out anti-competitive practices in contravention of section 3
CIT had rightly made revision as assessee failed to explain reason for storage of physical cash foun
IT : Where assessee had shown cash in books of account but same was never found and explanation given by it was also not found acceptable revisions proceeding could be initiated under section 263
Exp. incurred on interior decoration of office premises taken on lease is revenue exp.
IT : Allowance of expenditure incurred for travelling of employees would be limited under rule 6D by taking each trip of an individual employee and not with reference to total trips made by him in previous year
Corrigendum amending conditions of claiming exemption would apply from date of original exemption no
Excise & Customs : Corrigendum relates back to date of original notification; hence, if condition of an exemption notification is corrected by a corrigendum, said rectified condition would apply for earlier period also, i.e., from date of original notification
No penalty when assessee had voluntarily surrendered unexplained credit in return to avoid litigatio
IT: Where assessee voluntarily surrendered a sum pertaining to cash credit inrevised return to purchase peace and to avoid litigation, penalty was to be deleted
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