CA Terminal: 01/15/15

Thursday 15 January 2015

Co. outsourcing major portion of its business to third party couldn't be taken as comparable for ITE

IT/ILT: While computing ALP, functionally different companies having extraordinary circumstances like merger/de-merger, super normal profits and substantially high turnover could not be taken as comparables

Sum paid to municipal corporation to legalize construction of building isn’t prohibited exp; allowab

IT : Deduction under section 80HHC on DEPB was to be computed in light of Topman Exports v. CIT [2012] 342 ITR 49/205 Taxman 119/18 taxmann.com 120

Sec. 69A additions deleted which was made on basis of seized pass book of NRE accounts not related t

IT : Where assessee had no connection with NRE accounts, found from possession of assessee, addition was not justified

Cash payment made to 'Kachcha Aratia' to purchase food grains would fall under exceptions of Rule 6D

IT : Where assessee made surrender of income under misconception of facts or law, no addition could be made in respect of same

I-T refund of excess amount paid on self assessment falls under residuary clause of sec. 244A; liabl

IT: Tax paid on self assessment would fall under section 244A(1)(b), i.e. a residuary clause covering refunds of amount not falling under section 244A(1), therefore, interest is payable on refund on excess amount paid on self assessment tax

AO can't impose penalty on basis of provisional assessment order, says Rajasthan

CST & VAT: Rajasthan VAT - Where Assessing Authority passed provisional assessment order on assessee and imposed penalty upon it on basis of said order, penalty could not be imposed on basis of provisional assessment

Appeal against Tribunal's order dealing with clandestine removal of goods would lie to HC and not to

Excise & Customs : Tribunal order dealing with issues of clandestine removal of manufactured goods and clandestine manufacture of goods is not directly appealable to Supreme Court; appeal thereagainst would lie to High Court

Revision plea under FERA would continue even after FERA was repealed if it was filed within sunset p

FEMA : If within sunset period under section 49(3) of FEMA, a revision petition was filed under section 52(4) of FERA, such revision petition would continue before Appellate Tribunal even after repeal of FERA

No rectification to reduce depreciation on vapour absorption machine at 25% if it was eligible to 10

IT : Proceedings under section 154 by merely stating that Vapour Absorption machine was a part of Centralized Air Conditioner and liable for depreciation at 25 per cent was not justified as same was counter to Para III, 3(iii)D(b) of Appendix-I to Income-tax Rules, 1962

Reference to TPO was invalid as it was made when no return was pending for consideration of AO

IT: When no return is pending for consideration by AO, reference by him to TPO will be bad; if TPO finds no fault with ALP determined by AO, revision was unjustified

India’S Coking Coal Imports Down By 29.6Pct In December 2014

Business Standard reported that imports of coking coal, a key fuel required for steelmaking, declined by 29.6 % to 2.71 million tonne in December, compared with 3.85 million tonne shipped in December 2013.

The imports also fell from 4.3 million tonne shipped in November. November shipments were higher as some deliveries ordered for the month of October were shifted to next month due to cyclone Hudhud.

Traders and experts said that the decline in shipments is a temporary phenomena and does not mean the imports will go down in future.

Mr Rakesh Dubey, editor of mjunction services ltd, which provides steel industry news and data, said that “There was a temporary decline in the last part of 2014. It does not reflect the trend we have seen for the entire year.”

In April-December period, the imports actually went up to 28.47 million tonne, up from 27.21 million tonne in the previous comparable period. The imports went up because of the price fall globally and has nothing to do with domestic demand.

Mr Ganesh Natrajan, chief executive officer of Ennore Coke, a coke manufacturing firm, said that “The prices of coking coal are trading around USD 125 per tonne at Indian ports. The rates remained the same throughout 2014 and are likely to remain around same level for at least next two quarter. Indian importers are comfortable at these rates.”

Coking coal rates have slipped from USD 145 level since 2013 due to weak demand from China, Japan and South Korea, the major buyers, amid rising supplies from the North America and Australia.

Source:coal.steelguru.com

Mumbai To Host World Tea And Coffee Expo

Over 100 exhibitors from around the world are likely to attend the 3rd World Tea and Coffee Expo 2015, India’s only International trade show dedicated to the tea and coffee sectors, to be held in Mumbai, India.

The event will provide the perfect environment for the hot beverage industry to meet face-to-face and develop business opportunities.

The expo is to be held from October 1 to 3, at the Bombay Exhibition Centre, Mumbai, and shall cater to a prospective visitor base of over 6000 buyers from across India and abroad – up from the visitor count of 4100 during the second edition held in September 2014, said a company statement.

The event will display innovative products, machineries, accessories, technologies, vending machines and certifications from the hot beverage sector.

Also additional activities planned at the expo include: B2B match-making, workshops and championships, a high level 2-day conference by industry leaders, academicians and policy makers, export/import guidance kiosks, Knowledge zone, etc.

Priti M Kapadia, director of Sentinel Exhibitions Asia, the organiser of the show, said: “Mumbai is a city where the best converge for doing business. Mumbai attracts the top players from the all over India as wells as from aboard which results in high value deals and alliances.”

“The 2015 edition of this unique trade fair will also see delegations from Iran, Nepal, Dubai, and Russia at the event,” she added.

The success of the 2nd World Tea and Coffee Expo 2014, in September 2014, has established this expo as the official Industry show with just two editions under its belt. This is India’s only International Trade Show dedicated to tea and coffee and is supported by Ministry of Commerce through Tea Board of India and leading associations and chambers from across the world have pledged their support to this important industry initiative.

The expo offers huge potential for appointing distributors, bulk orders, joint ventures, franchising, networking, knowledge-sharing, meeting government officials, marketing alliances, and overall branding.

World Tea and Coffee Expo has become the platform for the launch of new and exotic tea and coffee products. For a visitor, workshops and seminars are the other important part of the event, which will help them to understand the depth of this industry, gain knowledge, and understand benefits and also to taste the products on the spot.

Skill development shall be the main theme of the workshops which will be conducted by experts in the field. Adds Kapadia, “For the International Tea and Coffee conference, we are in touch with a number of international speakers and some of them have already confirmed.”

The global market for RTD (Ready-to-Drink) Tea and Coffee is expected to reach $125 billion by 2017 with an annual growth rate of 11 per cent. The Asia-Pacific region is the largest market and also showing maximum growth. To capitalise on the growth trend in the RTD tea and coffee, companies are investing heavily on modernisation of machineries, quality up-gradation and product diversification as also branding, innovations and market expansion.

The upscale café culture has contributed significantly to the growth of both coffee and tea sector in India with exotic branding and packaging coupled with a dynamic product mix are driving the demand, it added. – TradeArabia News Service

HC upheld detention order as goods were diverted to location not shown in docs

CST & VAT : Tamil Nadu VAT - Where goods were diverted to one 'S' at Trichy while all relevant document showed that goods were meant to be delivered at assessee's factory at Coimbatore, detention notice was valid

Registration certificate of dealers can't be cancelled without hearing them and without assigning an

CST & VAT : Tamil Nadu VAT - Registration certificate of dealers cannot be cancelled without providing sufficient reasons and opportunity of being heard

India Eyes Wheat Exports, But Challenges Loom

A rally in global wheat prices and a looming tax on Russian exports have set the stage for resumption in India's overseas sales, although cheaper European supplies could provide stiff competition to the South Asian nation.

Exports by the world's No.2 wheat producer after a six-month gap could cap benchmark wheat prices which soared 20 per cent in the past quarter on worries over Russian supplies.

"India is in a unique position to make the best out of the export curbs put in place by Russia which was exporting wheat similar in quality to Indian wheat," said a trader with a leading global trading company in New Delhi.

Russia, a key wheat exporter, plans to introduce a duty of at least 35 euros ($41) per tonne on shipments from February to curb a rise in domestic prices.

India could sell around 2 million tonnes of wheat between February and July to Asian buyers as Russian supply dries up, traders and officials said.

While this is small versus a global trade of around 160 million tonnes, it is important for Southeast Asian millers looking for prompt shipments.

"Importers such as Indonesia, Vietnam, Malaysia and Bangladesh will be taking Indian wheat because of the freight advantage over European cargoes," a Singapore-based trader said. Southeast Asian buyers pay a freight rate of $12-$15 a tonne to get wheat from India and up to $30 to get grain from Ukraine.

There has been talk among traders that India could start issuing tenders to sell wheat from reserves from February. Government stocks were at 25.1 million tonnes as of January 1, more than three times the target.

"The government hasn't taken any decision on tenders yet but there are discussions going on between trading companies and the Food Corporation of India on export prospects and prices," an official at a state-run trading company said. India is set to procure wheat from farmers at about $230 per tonne this season, 3.7 per cent higher than last year.

In the export market, Indian wheat was offered by private traders at $270 per tonne free on board, while French wheat was sold at $248.94-250.25 recently. Australian standard wheat is at $270 and Ukraine milling wheat is available for $265.

But Indian wheat is still "attractive for buyers in Asia because they buy in smaller parcels and shipping time is shorter", a second Singapore trader said. "There is a strong possibility of a couple of million tonnes coming from India."

Source:profit.ndtv.com

India Offers Great Opportunity For Australian Uranium Sales: Dr Vanessa Guthrie

Australian uranium company Toro Energy is engaged in talks with the Indian public and private sector companies for a possible tie-up in uranium supply, trading and transfer of skill and knowledge strengths in uranium mining.

In an interview with Sanjay Jog, the company Managing Director Dr Vanessa Guthrie, a leading member of the India Australia Prime Ministers' CEO Forum participating in the Australia Business Week here, speaks on a wide range of issues.

Signing of the civil nuclear agreement in September last year was a watershed event for Australia uranium sector. It has provided us an opportunity to open a new market that is India. With the deal in place we can now build on negotiations for the Free Trade agreement (FTA) between the two countries and make sure that the relationship is reconnected.

For Toro Energy, the opportunity is exciting. We are currently focused on the development of a flagship Wiluna uranium project, for which the company has secured mining approval and clearance for starting the construction. We are ready to bring the product to India. India offers a very significant opportunity for sales of Australian uranium.

Australia has started talks to build relations with the Nuclear Power Corporation of India Ltd and Uranium Corporation of India Ltd. Besides, we have also launched negotiations with some private sector companies including Reliance Industries and Aditya Birla Group having interest in uranium trading in India with the Nuclear Power Corporation of India Ltd and Uranium Corporation of India Ltd.

Uranium Corporation of India Ltd owns uranium resources in India. The role of Australian investors including Toro Energy is to be able to provide skill and knowledge strengths. Australia has been mining uranium since a long time. We know how to do it, how to manage an environmental and radiation protections, we know how to regulate and control uranium operations.

So we would see most role that we can play provide knowledge and skill transfer in India's uranium mining. So far there has not been any MoU which has been signed but with the civil nuclear agreement in place this will be possible in due course of time. This apart, talks are also progressing with Indian companies for investment opportunities in coal and iron sector too.

With India and Australia now have inked civil nuclear cooperation deal, both the countries will have to soon finalize the administrative arrangements which is the protocol for exchange of material. It is currently underway. Prime Ministers of both the countries have set an ambitious target of December 2015 to sign FTA and they also have given due priority to soon put in place administrative arrangements for nuclear cooperation. We do not see any impediments. Modi's commitment to bring low carbon energy in India's power sector is very strong and we also see clear picture for energy sector.

During the fiscal 2013-14, Australia has exported about 6,000 tonne of uranium worth Australian dollar 622 million. We have the potential to increase it to almost 9,000 tonne worth Australian dollar 1 billion by 2018-19. In that proposed 9,000 tonne, Toro Energy's share will be 1,000 tonne. None of it is so far has been committed to India.

India is a good natural market for Australia. We in Australia have suffered under investments for many years due to government policies but in last 10 years there has been shift and policies have become much more open so also the mining sector.

We have the largest resources as Australia holds 34% of global uranium resources. However, Australia's uranium export in global exports is mere 11%. There is an opportunity for growth in India's nuclear power sector and it is matched with the growth in Australia's uranium exports.

Source:business-standard.com

Jsw Steel In Talks To Buy Iron Ore Terminal In Tamil Nadu From Sical Logistics

JSW Steel is in talks to buy an iron ore terminal in Tamil Nadu from Sical Logistics, a move aimed at backward integration of its operations and saving on cost of importing the key raw material, people familiar with the deal told ET. Sical Logistics runs an iron ore terminal with a capacity to handle 6 million tonnes (mt) of iron ore annually at government-owned Ennore Port.

The terminal's existing infrastructure can be further leveraged to handle 12 mt per annum to meet growth volumes, according to its website. Sajjan Jindal-led JSW Steel is greatly dependent on import of iron ore as it does not own any captive mines in India and the availability of iron ore in the country remains constrained after restrictions clamped by the courts in the wake of illegal mining. JSW Steel imports almost

half of its iron ore requirement of about 20 mt per annum.

"Sical Logistics' terminal at Ennore makes sense for JSW Steel," said one of the persons, requesting not to be named. VG Siddhartha Hegde, the promoter of Cafe Coffee Day, which owns majority of shares in Sical Logistics, is in charge of the discussions with JSW Steel, the person added. A spokesperson of Sical Logistics declined to comment on the development, saying, "We are not initiating any media activity at present."

JSW Steel executives said the company is likely to negotiate hard on the deal. Sical Logistics spent Rs 360 crore to build the terminals first phase of 6 mt capacity and will need another Rs 120 crore to take the capacity to 12 mt. JSW Steel, on the other hand, built a 10 mt iron ore jetty in Goa for Rs 180 crore and a 20 mt terminal in Ratnagiri, which has room for further expansion for Rs 700 crore.

"Sical Logistics has incurred high costs in building the terminal. It does not make sense for JSW to pay that much," the person cited earlier said. Sical has been grappling with high debt. At the end of September 2014, its debt was Rs 819 crore. The interest expense was 93% of its profit before interest and tax (PBIT). Any possible deal could bring down Sical's debt considerably.

In anticipation of this development, Sical's stock has risen 50% in the past three months. A senior official at Ennore Port who had not heard about negotiations said that since the port terminal was a public-private partnership, a deal will need consent of port as well as the government for change of ownership. In 2014, JSW Steel acquired Welspun Maxsteel for Rs 1,000 crore and a 50% stake in Vallabh Tinplate for Rs 46 crore.

Source:economictimes.indiatimes.com

Trust entitled to sec.11 relief once ITAT sets aside order withdrawing registration even if such ord

IT : Once order withdrawing registration under section 12A was set aside by Tribunal, registration would continue and assessee would be entitled to exemption notwithstanding fact that revenue had filed appeal against Tribunal's order

Revision by CIT would be void-ab-initio if such revisional order was set aside by ITAT and later on

IT: Where income from business of sale-purchase of land was duly disclosed by assessee and reconsidered by Assessing Officer, revision was not justified

Karnataka VAT: Provision on 'assessment of escaped turnover' can be invoked even in respect of deeme

CST & VAT: Karnataka VAT - Provisions of section 12A of Karnataka Sales Tax Act, which is headed 'Assessment of escaped turnover', could be invoked even in respect of deemed assessment

Rupee Strengthens Past 62 Per Dollar After Rbi Cuts Rates

The Indian rupee strengthened past the 62-per-dollar mark, while the 10-year bond yield fell 11 basis points in opening trade on Thursday after Reserve Bank of India (RBI) unexpectedly cut the repurchase rate with immediate effect. One basis point is one-hundredth of a percentage point.

The local currency opened at 61.89 per dollar and touched a high of 61.72, a level last seen on 24 November 2014. At 10.02am, the rupee was trading at 61.79 per dollar, up 0.65% from its previous close of 62.19.

RBI cuts its benchmark repo rate by 25 basis points to 7.75%, citing easing inflationary pressures. RBI said inflationary pressures have been easing since July and the path of inflation has been below the expected trajectory. India’s benchmark Sensex was trading at 27,834.64 points, up 1.8% or 487.82 points.

Most of the Asian currencies were trading mixed against the dollar. The Malaysian ringgit was up 0.57%, Taiwanese dollar 0.11%, Singaporean dollar 0.05%. However, Japanese yen was down 0.34%, Indonesian rupiah 0.14%, Chinese offshore 0.06% and South Korean won 0.06%.

The yield on India’s 10-year benchmark bond stood at 7.67%, a level last seen on 15 July 2013, compared with its Wednesday’s close of 7.77%. Bond yields and prices move in opposite directions.

Lower-than-expected inflation has been enabled by lower global crude oil prices, weaker demand conditions globally and locally and the government’s commitment towards fiscal consolidation, RBI said.

India’s Consumer Price Index (CPI) data released on Monday had shown that retail inflation fell to 5%, while Wholesale Price Index (WPI) data released on Wednesday showed an expansion of just 0.1%.

Since the beginning of the 2015, the rupee has strengthen 1.94% against the dollar, the best performer in Asian currencies market, while foreign institutional investors have sold $311.6 million from local equity markets and bought $955.9 million from the debt market.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 92.151, down 0.01% from its previous close of 92.161.

Source:livemint.com

No stay on basis of earlier favourable stay order by Tribunal if assessee didn't refer to such order

Service Tax : If Tribunal has granted stay on earlier occasion, it is duty of assessee to point out same at time of hearing of stay petition; Tribunal cannot be expected to go through what had happened in past to give relief

Value of unbranded/duplicate goods can be enhanced on basis of data of National Informatics Data bas

Excise & Customs : Value of unbranded/duplicate goods cannot be enhanced based on value of branded goods; however, if NIDB (National Import Data Base) data of comparable goods is available, value shall be adopted on basis of NIDB data

Now CFO/CS to sign quarterly declaration of importer/exporter hedging forex under past performance r

FEMA/ILT : Risk Management and Inter Bank Dealings: Hedging under past Performance Route- Liberalisation of Documentation Requirements in the OTC Market

ITAT rejects high risks, high return claim of TPO; deletes TP addition as assessee beard same risk i

IT/ILT: Assessee was following two business models, which carried the same risk - where in the first model customers could enter into contract directly with assessee and in the other model they could enter into contract with its AE. In both business models assessee had to share same ratio of revenue with AE. Whether TPO could not made transfer pricing adjustment on the ground that assessee was entitled to larger share of proceeds when contract was directly entered into with customers if assessee

Jharkhand Governor mandates e-filing of VAT returns; introduces drastic changes to Jharkhand VAT Rul

CST & VAT/INDIAN ACTS & RULES : Jharkhand Value Added Tax Rules, 2006 - Amendment in Rules 2, 3, 3A, 4, 7, 8, 10, 11, 14, 15, 18, 23, 24, 25, 31, 35, 41, 42, 43, 44, 58, 59, 60, Forms Jvat 120, Jvat 205, Jvat 400 and Jvat 407; Insertion of Rule 67, Forms Jcrf, Jcaf, Jccf, Jvat 126 and Jvat 215; Substitution of Forms Jvat 111, Jvat 112, Jvat 117, Jvat 119, Jvat 122, Jvat 200, Jvat 202, Jvat 204, Jvat 206, Jvat 207, Jvat 208, Jvat 209, Jvat 211, Jvat 212, Jvat 302, Jvat 306 and Jvat 508

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