IT: Where requisition under section 132A was made prior to 31-5-2003 when section 153A was not in existence, assumption of jurisdiction under section 153A by Assessing Officer was bad in law and same was liable to be quashed
Wednesday, 11 February 2015
Addition upheld on firm for suppressing value of property sold to partner who admitted receipt of hi
IT: In view of market value of property at Rs. 62.38 lakh, assessee's admission of receipt of Rs. 65 lakh as sale consideration was to be upheld
HC directed liquidator to hand over possession of property to licensor on liquidation of Co.
CL : Where business of company in liquidation was sold to appellant with an express stipulation that property of respondent was to be handed over before stipulated date, Official Liquidator was to be directed to hand over vacant possession of property to respondent
AO rightly directed grant of registration certificate on expiry of one month of applying registratio
CST & VAT: West Bengal VAT - Where assessee made an application for registration in Form 1 accompanied by documents on 12-2-2013 and Assessing Authority issued certificate of registration with its validity from 10-5-2013, Assessing Authority was directed to issue registration certificate with its validity from 14-3-2013
ITAT rejects TPO’s working of ALP under RPM on basis of hypothetical reseller’s profit margin
IT/ILT : Where while computing ALP of transaction of purchase of books by assessee from its AEs, TPO had not adopted profit margin of distributors on basis of actual figures or undisputed discount policies on cover prices but based on certain hypothesis which was based on misconception of facts, impugned ALP adjustment is unsustainable in law
Indian Corn Farmers Pin Hopes On Local Poultry Feed Demand
Indian corn producers, after scoring virtually no major export deal for months, are counting on local chicken farms to absorb millions of tonnes of the grain as poultry output heads for yet another record year.
India, a key exporter of the grain to Asia, has struggled to find takers for its relatively expensive corn after global benchmark prices hit five-year lows late last year on record production in the United States and South America.
"No major corn export deal has been signed since October," according to Amit Sachdev, India Representative of the U.S. Grains Council, leaving grain with the producers.
Rising domestic orders for chicken feed will help soak up some of the grain, with poultry producers expected to increase corn consumption by around 10 percent this year, analysts say.
India's poultry output has been scaling yearly records as higher incomes boost demand for meat in the world's second-most populous country after China. India's broiler production will hit a fresh all-time high of 3.9 million tonnes in 2015, U.S. Department of Agriculture estimates published in October show.
"We expect to breed about 10 percent more chicken in 2015 from 2014," said Prasanna Pedgaonkar, deputy general manager at Venky's, an Indian chicken processing and product firm that also owns the English football club Blackburn Rovers.
The higher use of corn as feed would make up somewhat for weak exports that traders see easing by as much as 12 percent to 2.2-2.3 million tonnes in the year to September 2015.
Indian chicken farms will consume 10-10.5 million tonnes of local corn this year, up 1 million tonnes from 2014, according to Deepak Chavan, a commodity analyst with Agro Futures.
Major Indian corn exports have ground to a halt as buyers balk at the sizeable premium for Indian supplies.
Despite a 10 percent drop in Indian corn prices MAIZE-NZM-NCX to around $20 per 100 kg since August, export rates of $210-$220 a tonne, free on board, remain significantly higher than the $180-$190 quoted by the United States.
India usually attracts deals when it offers corn at a 5-6 percent discount to rival supplies. It is expected to produce around 22 million tonnes of corn this year, dealers said, down 10 percent from a year ago.
With export deals hard to come by, demand from the poultry sector is what corn farmers are now pinning their hopes on.
It is more feasible for poultry farms to source their corn locally as imported corn would be expensive after including freight charges and other transportation costs, traders said.
India's per capita chicken consumption is among the lowest at around 3.5 kilogram (kg) versus a global average of 11.6 kg, but that is fast changing due to new food consumption trends and a younger average age of the population, industry sources say.
Michelin-starred Indian chef Vikas Khanna said the age groups of 12 to 35 years order poultry the most, using his restaurant Junoon in New York as a case in point.
More than half of India's population is below 25 years and the average Indian age is set to be 29 in 5 years, a demographic that suggests poultry demand will continue rising.
Source:in.reuters.com
Payment made under IPR agreement was royalty as confidentiality clause would apply even after tenure
IT/ILT : Where the agreement refers to the tenure of five years unless it is terminated earlier, but the confidentiality obligation subsists and would be applicable even subsequently, lumpsum payment thereunder is "royalty" since what was conferred and granted was mere right to use or permission to use the intellectual rights and knowhow. The agreement postulated grant of permission to use or right to use intellectual property rights or knowhow and it is not a case of outright sale. It does not
Tea Export Volume, Value Decline
Tea exports declined in value and volume terms during January-November 2014, as compared to the same period in 2013, according to Union Commerce Ministry statistics.
Shipments dropped by 4.1 per cent to 185.68 million kg from 193.7 million kg during the period under reference. Earnings declined by 6.6 per cent to Rs.3,612.80 crore from Rs.3,866.90 crore. The unit price of Indian teas has dropped by 2.5 per cent. However, this seems to be part of a world trend in 2014.
Increased output by Kenya and Sri Lanka, two of India’s arch rivals in the international tea arena, and the domestic crop loss in some of the best tea producing months are reasons behind this performance, sources said.
Till November, official statistics pegged India tea crop at 1,126.9 million kg, which was 16.3 million kg lower than 2013.
Barring the sub-Himalayan terrains in North Bengal, tea production has declined across the country due to adverse weather conditions. Led by Assam (which gives 50 per cent of the crop), the output is lower in Darjeeling, Tamil Nadu and Kerala. Meanwhile, the Tea Board took a delegation of tea exporters to Russia on Monday. Coinciding with an industrial exhibition, the visit includes meetings with Russian agriculture department officials, customs authorities, and individual companies.
Tea-tasting in a mall and networking workshops over chai have also been scheduled by the Moscow office of the Tea Board. Valentines Day is proposed to be marked with India tea. Russia, a 200-million kg market, is India’s single-largest importer, buying about 35 million kg. But that too is under pressure.
Source:thehindu.com
India’S Oilmeal Exports To Iran Down By 70 Per Cent
India’s oilmeal exports to Iran have rerecorded a drop of 70.31 per cent at 322,091 tonnes during April 2014 to January 2015.
During the same period last year, Iran imports were at 1.08 million tonnes, the Solvent Extractors Association of India (SEAI) said in a statement. Import from Iran consists of 180,300 tonnes of soybean meal and 141,791 tonnes of rapeseed meal.
Similarly, during April 2014 to January 2015, oilmeal imports from Thailand were also down to 189,026 tonnes, as compared to 307,704 tonnes during the same period last year.
Import from Thailand included 181,762 tonnes of rapeseed meal and 7,264 tonnes of soybean meal. Taiwan imported 61,142 tonnes of oilmeals that includes 30,897 tonnes of rapeseed meal, 22,685 tonnes of castor meal and 7,560 tonnes of soybean, against compared to 104,824 tonnes imported during the last year.
Oilmeals import by South Korea from India during April 2014 to January 15 also reported a negative growth at 730,571 tonnes, as compared to 901,661 tonnes, consisting 426,874 tonnes of rapeseed meal, 301,639 tonnes of castor meal and 2,058 tonnes of soybean meal, SEAI adds.
However imports from Vietnam were up to 244,422 tonnes, against 183,236 tonnes imported during the same period last year.
Imports from Vietnam included 57,555 tonnes of rapeseed meal, 17,927 tonnes of soybean meal, 1,186 tonnes of groundnut meal and 167,754 tonnes of deoiled rice bran extraction.
Europe imported 208,911 tonnes of oilmeals, as compared to 533,418 tonnes of veg oil imported last year.
Kandla Port handled 71 per cent of export traffic at 1.44 million tonnes followed by Mumbai including JNPT ports handled 234,877 tonnes with 12 per cent, Kolkata port handled 195,486 tonnes with 10 per cent, Mundra port handled 79,177 tonnes with four per cent, Bedi port handled 32,197 tonnes with two per cent and Pipavav port handled 37,386 tonnes with the balance two per cent export oilmeal traffic.
Source:blackseagrain.net
Even misdeclaration of export goods due to mistake of labourers would attract confiscation, fine and
Excise & Customs : Even if export goods are mis-declared as a result of a mistake of labourers, since goods were mis-declared, a case for confiscation of goods was clearly made out and accordingly, levy of fine and penalty was justified
Import Duty On Indian Yarn Opposed
Value-added textile exporters are strongly opposing the proposal of 15 per cent duty on Indian yarn, saying the imported yarn is cheaper and allows them to be competitive with regional business rivals.
“Why are spinners demanding 15pc duty on Indian yarn now? We are still working in the free trade zone. In reality, the spindles have increased in the country and China has stopped importing yarn from Pakistan,” claimed Council of Loom Owners Chairman Waheed Khalid Ramay.
He said that in 2010-11, spinners exported billions of rupees worth yarn to China ignoring the local value-added and weaving sector.
“Owing to unbridled export to China, exporters and weaving unit owners had faced numerous problems and purchased yarn on exorbitant rates,” he added.
He said during peak exports to China, Pakistan’s value-added sector suffered immensely as the price of 40-single yarn had surged to Rs17,500. “However, now its price has come down to Rs13,000 per bag,” he added.
“Spinners are pushing for duty on Indian yarn. This would be against the spirit of free trade and also the interests of the value-added sector,” he said.
Talking to Dawn, Textile Minister Abbas Afridi said that it would be unwise to impose duty on Indian yarn without considering what kind of yarn is being sent to Pakistan. “India is also exporting the kind of yarn to Pakistan which is not being spun by our factories,” he added. Pakistan Yarn Merchants Association (PYMA) claims the quantity of Indian yarn dumping in Pakistan is increasing.
PYMA Central Chairman Qaisar Shamas said that in 2012, cotton yarn imported from India was 6,500 tonnes, surged to 30,000 tonnes in 2013 and now is touching about 36,000 tonnes.
Chairman Pakistan Apparel Forum, Muhammad Javed Bilwani told Dawn that they were not in favour of any duty on Indian yarn dumping.
He said the value-added sector had major share in the entire textile chain, however, only 30 spinning mills were raising hue and cry citing losses.
Faiq Jawed, a spinner and executive member of the All Pakistan Textile Mills Association, said government had been providing nothing to the spinning sector which is battling the energy crisis.
On the contrary, he said, the Indian government had been facilitating its entrepreneurs and earmarked Rs 42 billion for the yarn exporters to hit the Pakistani market.
He urged the government to devise a strategy focusing on the status of yarn production and its consumption.
Source:dawn.com
Tighten Norms In Export Deals, Rbi Tells Banks
The Reserve Bank of India (RBI) has directed banks to plug loopholes in export finance deals, especially when it comes to advance payments for yet-to-be-undertaken exports. The directive follows the Enforcement Directorate (ED) probe into the suspected misuse of up to Rs 20,000 crore in export advances paid out by a bank. It, however, made no mention of the UCO Bank, the only nationalised bank that deals with Indo-Iran trade.
The Reserve Bank of India (RBI) has directed banks to plug loopholes in export finance deals, especially when it comes to advance payments for yet-to-be-undertaken exports. The directive follows the Enforcement Directorate (ED) probe into the suspected misuse of up to Rs 20,000 crore in export advances paid out by a bank. It, however, made no mention of the UCO Bank, the only nationalised bank that deals with Indo-Iran trade.
"Banks should exercise due diligence and ensure compliance with KYC (know your customer) and AML (anti-money laundering) guidelines so that only bonafide export advances flow into India," the RBI said in a circular to banks on Monday.
It was first reported by dna on January 23 that the ED has been probing the multi-layered hawala scam under the Foreign Exchange Management Act, for three months now. While investigations so far pegged the scam at Rs 2,000 crore, ED now suspects it to be a much bigger scam at Rs 20,000 crore.
Recently, ED has taken details of accounts and transactions worth about Rs 800 crore from UCO bank. They also visited the regional branch offices of UCO Bank in Mumbai and Chandigarh and recorded statements of at least 5-6 bank officials a couple of months back.
As per the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 the advances for exports, or for the re-export of goods imported into India, should be covered within 12 months by proof that an actual delivery is made.
"But the shipments, which included the purchase of textile or textile kind of goods for re-exports to Iran, were never made," said an ED source familiar with the investigation.
"Clearly, the activities were illegal and done with the sole purpose of money-laundering as there were no genuine transactions. All companies had the same address and there is apparently no business rationale for incorporating a large number of companies. Money trail up to 3-4 layers have been traced. Further beneficiaries are being identified," added the ED source.
According to sources, eight foreign nationals (seven Iranians and one from Azerbaijan) visited India on student visas, created bogus companies in Chandigarh and opened accounts with UCO Bank in probable collusion with lower-rung officials. Their sole purpose was to divert funds to Dubai and Iran.
They acquired companies in India with the help of an accountancy firm, Agarwal Raman & Associates, with the help of one UK Nair. They have their corporate office in Chandigarh. The accounting firm has since shut shop, post the transactions early last year. None of the key people from the firm nor the eight foreigners are traceable.
The exporters under ED lens are A&H general exports, True Exports Services, Connect Export traders, Centroid Exports (P) Ltd, Genius Exporters P Ltd, New Age Export Services, Star Elite Exports (P) Ltd and Elite World Trading.
"We are investigating all these companies which are actually bogus ones created for fake exports. They received funds in their UCO Bank accounts in Chandigarh and Mumbai, and 90 percent of the advance payment documents were fictitious," ED sources said.
India had expected exports to Iran to hit $6 billion in the fiscal, but in the first seven months of the year, they reached just $2.4 billion.
Source:dnaindia.com
For Cenvat refund under rule 5, 'export turnover' would include export of exempted services
Cenvat Credit : Even exempted export services were to be added to Export turnover and all unutilised credit was refundable and revenue's argument that 'unless foreign exchange is realized, amount pertaining to it cannot be considered as export turnover' cannot be accepted
Rupee Breaches 62 Mark On Corporate Dollar Demand
Tracking the Non Deliverable Forwards (NDF) market, the rupee opened weak in early trade today. Dollar demand by corporates ahead of the Budget also weighed on the rupee.
The rupee was quoting at 62.24 at 10:15 am against the dollar compared with its previous close of 62.20. The one month NDF forward was quoting at 62.50.
"There is a lot of dollar demand from corporates as they don't want to keep their near term exposures open ahead of the budget," said Sandeep Gonsalves, forex consultant at Mecklai & Mecklai.
The Union Budget will be announced later this month by Finance Minister Arun Jaitley.
Few currency experts feel that the rupee may even break the 62.50 mark ahead of the Budget, but the RBI may not allow it to weaken beyond that.
Source:business-standard.com
Sum paid as a pure agent of service recipient wasn't includible in value of services
Service Tax : Where assessee, a commission agent, acting on behalf of its principal, paid over amounts under Primary claim/Retail Scheme to various retailers selling products of its principal and later got reimbursement thereof, said amount was not includible in value of services
SC: Arbitrator couldn't decide upon issues specifically excluded from arbitration under the contract
Arbitration : Arbitrator cannot decide upon issues as to an excepted dispute not arbitrable in a contract of arbitration
In FOR sales, freight upto buyer's premises is included in excisable value
Excise & Customs : Where sale of excisable goods is on FoR destination basis and transit insurance is also taken by assessee in its name for safe transport of goods and ownership of goods remains with assessee up to place of delivery at buyers' premises, freight/insurance up to buyers' premises is includible in excisable value
Royalty payments allowed as revenue exp. couldn't be disallowed by making reassessment in Absence of
IT : Where assessee-company claimed royalty paid to its parent company as revenue expenditure and same was examined and accepted by Assessing Officer during original proceedings and no new fact was emerged from re-examination of existing document, re-opening of assessment could not be permitted
ITAT rightly rejected condonation plea due to parents demise as they died even before order was pass
IT : Where assessee's parents died even before passing order of Commissioner (Appeals), delay of 715 days in filing appeal before Tribunal could not be condoned
Services provided to SEZ are exempt; ST notifications have only operationalzed such exemption
Service Tax : As per SEZ Act and Rules, services supplied to SEZ are considered as deemed export and not liable to service tax; exemption notifications under service tax law merely operationalize said exemption and cannot be regarded as mandatory
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