IT : Where Assessing Officer computed gross profit rate of assessee at 25 per cent of gross receipts without any justification, Tribunal was justified in adopting gross profit rate of 8 per cent as mentioned in section 44AD even though turnover of assessee was in excess of Rs. 40 lakh
Thursday, 12 February 2015
High Court upheld ITAT's order setting aside penalty considering favourable order passed in subseque
IT : No penalty to be levied for wrong claim of deduction under section 10A if there was no concealment of income or furnishing of inaccurate particulars
AO failed to appreciate assessee's objections while concluding re-assessment; matter remanded back
CST & VAT : Tamil Nadu VAT : Where Assessing Authority passed revised order of assessment on assessee without considering its objections, matter was remitted to redo assessment after considering objections
Partner could claim TDS credit of dissolved firm if he included firm’s income in his return
IT : Where assessee partner upon dissolution of firm became proprietor of business run by firm and included income of firm in his return, assessee would be entitled for credit of TDS of firm in accordance with rule 37BA
Appeal can be filed before HC within whose jurisdiction either Co. has its registered office or carr
CL : In respect of a corporate entity, an appeal could be preferred before High Court within whose jurisdiction corporate entity carries on its business or before High Court within whose jurisdiction corporate entity has its registered office
Appeal can be filed before HC within whose jurisdiction either Co. has its registered office or carr
CL : In respect of a corporate entity, an appeal could be preferred before High Court within whose jurisdiction corporate entity carries on its business or before High Court within whose jurisdiction corporate entity has its registered office
Shortage of input materials substantiates charges of clandestine removal of excisable goods
Excise & Customs : Shortage of clinkers and coke breeze along with excess quantity of limestone quarried is sufficient enough for authorities to conclude clandestine removal of quantity of cement which could have been produced therefrom
Exp. incurred on expansion of business which had no nexus with existing business couldn’t be allowed
IT: Where expenditure incurred by assessee for expansion of business had no nexus with business carried on by assessee, same was not allowable under section 37(1)
Volkswagen Closes Two India Sales Offices To Cut Cost
Volkswagen is tightening its sales and marketing operations in India to cut cost as local sales remain muted. The auto maker has closed its regional sales offices in Delhi and Bengaluru, and is focusing on exports to utilise capacity.
Wolfsburg, Germany-based Volkswagen entered the Indian market in 2007 and started local production in 2009. It has capacity to produce 1.3 lakh cars a year, or more than 10,800 a month, at its plant in Pune, but makes fewer vehicles. Since the start of the current fiscal year in April, it manufactured close to 89,000 cars through January, at an average of 8,900 a month. More than 60 per cent of these vehicles are exported.
It started the regional offices - in Delhi for north and east India and in Bengaluru for south - to streamline marketing and sales functions after facing much flak from customers over the quality of service and supply of spares. Volkswagen has now closed these offices and merged them with its national sales company (NSC) that operates from the local head office in Mumbai, company sources said.
The decision was made purely on "operational basis and is only related to the field forces" of Volkswagen and unit Audi, said Thierry Lespiaucq, managing director of Volkswagen Group Sales India. These functions will now be centrally coordinated, he told ET.
Some employees of the regional offices have moved to Mumbai while a few others have been asked to operate from home, the sources said. "They have been given an option to either shift to Mumbai or work from home based on criticality and seniority of profile, though sales operations in the automotive industry require more of a field job to generate volumes and coordination with the dealers across the network," one of them said.
Tough market conditions in India are forcing auto makers to redefine their strategies to maintain sales, said Amit Kaushik, principal analyst at consultancy firm IHS Automotive. "These kind of consolidations generally help firms save on operational expenses and potentially pass on more benefits to customers," in the form of discounts and freebies, he said.
Volkswagen, Europe's largest carmaker by volume, aims to becoming the world biggest by 2018, surpassing rivals Toyota Motor and General Motors. Despite the current weak market conditions in India, it views the country as a critical market to achieve this target. "Experts believe that India will emerge as one of the world's largest automobile markets by the end of this decade. In light of this, India plays a significant role in the Volkswagen Group's global growth strategy," Lespiaucq said.
To keep its operations running at maximum efficiency even as it waits for a recovery in India, the company is increasing exports. Its shipment from India rose more than two-and-half times to 57,183 units in the first 10 months of this fiscal year, making it the fifth largest auto exporter from India. On the contrary, domestic sales declined 19 per cent to 36,588 units in the same period. These figures include its stock at the beginning of the year.
Lespiaucq said the company would increase the use of locally made components in its vehicles and launch new models. Using more locally sourced components would allow the auto maker cut cost and keep prices more competitive in India's price-sensitive market. New launches could help drive sales, as analysts blame its aging and limited portfolio as one of the reasons for weak sales. New models have helped companies like Maruti Suzuki, Hyundai Motor and Honda Motor post healthy sales growth in an otherwise weak market.
When Volkswagen entered India, it had a dream run - it clinched a 4.5 per cent market share within three years of starting operations. But then its failure to bring in new models kept buyers away.
It plans to launch new models and some innovate cars like a compact sedan based in its Vento platform. "The Indian automotive market has undergone some structural changes over the last two years. The compact SUV and compact saloon segments in particular have emerged as fastest growing segments.
Volkswagen is contemplating on models in these segments but no decisions have been taken so far," Lespiaucq said.The company also plans to open a regional centre for parts in Bengaluru and a training academy in Delhi.
Source:economictimes.indiatimes.com
Charge of clandestine removal not sustainable without any evidence of purchases and production
Central Excise : Without corroborative evidences in form of procurement of raw materials, use of production facilities, transportation of, raw materials into factory and finished goods out of factory, and financial flow of these transactions, allegation of clandestine procurement, production and removal cannot sustain
CBEC extends jurisdiction of Directorate Gen of Excise Intelligence for assigning Excise cases booke
EXCISE & CUSTOMS LAWS/ST LAWS : Rule 3 of the Central Excise Rules, 2002 - Jurisdiction of Central Excise Commissionerates - Specified Jurisdiction of Principal Director General or Director General of Central Excise Intelligence
Payment to NR under a composite contract for offshore supply and installation subject to TDS
IT/ILT : Payment made to US firm for installation of machinery would be liable to deduction of tax at source there being no severality of sale and installation components and payee being not covered by section 195(1)
Income held as undisclosed as assesse imported goods under import license but claimed assignment the
IT: Where assessee claimed that it had earned through assignment of import license but revenue found that assessee itself imported goods and sold same in open market, reopening and additions were to be sustained
CBEC issues guidelines to assign Excise/Service tax cases booked by Directorate General of Excise In
EXCISE & CUSTOMS LAWS/ST LAWS : Section 2(b) of the Central Excise Act, 1944 - Central Excise Officer - Instructions on Adjudication of Central Excise and Service Tax Cases Booked by DGCEI
India Slashes Iran Oil Imports In January -Trade
India slashed imports of Iranian oil in January as New Delhi scrambled to bring its purchases from the OPEC member in line with 2013 levels, according to data obtained from trade sources and ship tracking data on the Thomson Reuters terminal.
India, Iran's top client after China, took about 273,500 barrels per day (bpd) of Iranian crude in January, a decline of 21.5 percent from the previous month, the data showed. The imports were about a third less than a year ago.
The cuts still leave India's daily average volumes for the April-January period above sanction limits as Iran and world powers try to outline an agreement by March 31 to end Tehran's isolation in return for curbs to its nuclear programme.
U.S. President Barack Obama said early this week that extending the March deadline would not be useful if Tehran has not agreed by then to a basic framework that assures world powers it is not pursuing nuclear arms.
The negotiators have set a June 30 final deadline for a full accord, and Western officials have said they aim to agree on the substance of that deal by the end of next month.
Sanctions on Iran were softened at end-2013 as discussions on a final resolution began, allowing Asian buyers of Iranian oil to maintain purchases at then-current levels.
India, with daily imports now running above those volumes, last month asked refiners to cut oil purchases from Iran to keep the shipments in line with the previous fiscal year's levels of about 11 million tonnes or 220,000 bpd.
In the first 10 months of this fiscal year, though, India has taken about 10.6 million tonnes or 252,500 bpd, up a quarter from the same year-ago period, the data showed.
State-run Mangalore Refinery and Petrochemicals Ltd was the biggest Indian client of Iran in January followed by Essar Oil.
The two refiners are expecting to get another 392,000 tonnes, or 102,200 bpd, from Iran in February via three cargoes containing oil and condensate, data from trade sources shows.
That means India's final intake from Iran for the year ending March 31 could come in close to the target of 11 million tonnes, unless March arrivals are higher than expected.
Indian Oil Corp, which is not a regular importer of Iranian oil, has rescheduled a shipment to March from February, a company source said. It is not currently known if there are other cargoes scheduled for arrival next month.
This fiscal year so far Iran has accounted for 6.6 percent of India's crude imports, compared with 5.3 percent a year ago. It is the seventh largest crude supplier in terms of volume, same as last year. Overall, India imported 4.47 million bpd of oil in January up 21.3 percent from a year earlier.
Over April-January India took in 9 percent more oil from Latin America, while imports from the Middle East declined 6 percent. Imports from Africa rose 12 percent compared to the same period a year ago, the data showed.
Source:maktoob.news.yahoo.com
Now Govt. focuses more on prosecuting persons evading taxes on a large scale
IT/ILT : Section 276C of the Income-Tax Act, 1961 - Wilful Attempt to Evade Tax, Etc. - Shift in Focus of Income-Tax Department from Civil Consequences to Criminal Consequences in Serious Cases of Tax Evasion
Vietnam Suspends Peanut Imports From India
The official suspension became valid on February 6. Caryedon serratus Olivier, associated entirely with groundnuts, is included in the Group I category of harmful organisms that may cause serious damage to plants. It has not been found in Vietnam.
Earlier in January 2015, Vu Van Huong, Director of the Department of Plant Quarantine I said his staff found nearly 700 tonnes of peanuts having live serratus insects imported to Hai Phong port.
The Ministry promptly asked the Plant Protection Department to closely control imported peanut cargoes. Relevant Indian agencies have been informed and requested to counteract the issue immediately. The Plant Protection Department held several examinations and confirmed solutions proffered by the Indian exporter.
Source:english.vietnamnet.vn
Iran To Resume Basmati Imports From India Soon
Indian rice exporters may soon be able to resume Basmati exports to Iran. Top officials in the country have assured India that the temporary ban placed on imports late last year will be lifted shortly and the process of registration of suppliers will begin.
A team of officials from the Commerce Ministry recently visited Iran to hold talks with their counterparts on exports of a variety of products including rice.
“We were assured that Iran is ready to resume rice imports as the glut in their domestic market has eased substantially,” a Commerce Ministry official told BusinessLine. Business for rice exporters, however, is not likely to be as brisk as before, as Iran still has substantial stocks of rice.
“Iranian officials have indicated that they will resume the process of re-registration of Basmati suppliers. The country is supposed to come up with its notification (on lifting curbs) on March 21. We have to find out what happens,” said Rajen Sundaresan from the All India Rice Exporters Association (AIREA).
Sundaresan was part of the business delegation that accompanied the Indian officials. “We expect rice exports to Iran to be 3-5 lakh tonnes (lt), as it will not be possible to touch the earlier highs,” the Ministry official said.
In 2014-15, exports of rice from India to Iran are likely to be around 8 lt, as opposed to expectations of 10 lt. In 2013-14, India’s export of Basmati to Iran was a whopping 1.4 million tonne.
Sundaresan said that while Iran had not indicated how much they want to buy, the general expectation was that it would be lower this year as there was still a lot of existing stock in the market.
Iran stopped importing rice late last year (August-September) as there was a glut in the country because of a robust local production and a spill-over in stocks from the previous year.
Iran had stepped up its purchase of all items including rice from India over the last couple of years to get around economic sanctions imposed by Western countries over its alleged nuclear activities.
India and Iran have put in place a Rupee payment mechanism wherein part payment for the oil purchased from Iran by India is deposited in a Rupee account in India’s UCO Bank. The money is then used to make payments to Indian exporters to Iran thereby avoiding payments in Dollars and through foreign banks.
Source:thehindubusinessline.com
India's Gold Jewellery Demand Reaches Record 662 Tn In 2014
Gold jewellery demand in India, the world's largest consumer, touched record 662.1 tonnes in 2014 despite curbs on gold imports but investment demand slumped by 50 per cent from last year, the World Gold Council (WGC) said today.
In 2015 also, gold jewellery demand is expected to remain strong if the government does not impose further market distorting policies and price volatility does not unsettle the market, it said in its latest report.
India imported 769 tonnes of gold in 2014, down from 825 tonnes in the previous year. However, the annual smuggled gold is estimated to have been around 175 tonnes, it added.
"It was a standout year for Indian jewellery despite government restrictions on gold imports, reinforcing the nation's affinity with gold," said Marcus Grubb, Managing Director, Investment Strategy at the WGC, in the report.
Jewellery remains the biggest component of demand for gold. Indian demand for jewellery was up by eight per cent to 662 tonnes, the best year of jewellery demand since records began in 1995, the WGC report said.
Overall gold demand stood at 842.7 tonnes in 2014, of which gold jewellery demand alone was 662.1 tonnes.
The fourth quarter growth was concentrated in October (Diwali) and November (wedding season), before the sudden and unexpected removal of import restrictions at the end of the month threw the market into disarray, it said.
"The government announcement that the 80:20 rule would be retracted took the market completely by surprise. Imports came to an almost complete halt as the market tried to grasp the implications and assess whether the system may be replaced with alternative measures," the WGC said.
According to WGC, smuggling volumes have since risen again as the 10 per cent import duty on gold continues to make this activity profitable enough for those operating well established routes.
"These channels are likely to remain open until government intentions with regards to gold imports are more clearly communicated to, and understood by, the market," it said, adding that annual gold smuggling volumes are estimated to have been around 175 tonnes.
In stark contrast to the record year in jewellery demand, WGC said that Indian investment slumped by 50 per cent to 180.6 tonnes in 2014 - a five-year low.
"Although demand for bars of very small denominations was healthy during the auspicious festival period in Q4, larger scale investors -- traditionally focussed on large (kilo) bars -- were notable for their absence, preferring to invest in alternative asset classes," it said.
Gold used in other industrial and decorative applications fell by six per cent in 2014, slipping to a five-year low of 87.5 tonnes.
"The year-on-year decline was again concentrated in India, where demand for jari thread used in clothing was buffeted by changing consumer tastes," it added.
Source:business-standard.com
Rupee Weakens Against Dollar To 62.39
The Indian rupee weakened for a fourth consecutive session against the dollar on Thursday, tracking losses in the Asian currencies markets.
At 2.20pm, the home currency was trading at 62.39, down 0.2% from Wednesday’s close of 62.26. The local unit opened at 62.43 per dollar and touched a low of 62.47—a level last seen on 9 January.
“The market is set to trade in the 61.50-63 range in the short term owing to the dollar demand from importers and possible aftershocks of the Delhi election results,” said a foreign exchange trader on conditions of anonymity.
Dealers were cautious ahead of the Index of Industrial Production (IIP) and Consumer Price Index (CPI) data due later on Thursday. A Bloomberg poll expects CPI inflation will be 5.5% for January compared with 5% in December while factory output will grow by 1.8% in December compared with 3.8% in November.
Major Asian currencies were trading lower against the dollar. The South Korean won was down 1.2%, Indonesian rupiah 0.68%, Malaysian ringgit 0.58%, Thai baht 0.14%, Philippines peso 0.1%, China renminbi 0.05%. However, Japanese yen was up 0.88% and Singapore dollar was up 0.1%.
The benchmark S&P BSE Sensex rose 0.08%, or 23.42 points, to 28,510.55.
The yield on India’s 10-year benchmark bond was trading at 7.743% compared with its Wednesday’s close of 7.734%. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has gained 1%, while foreign institutional investors have bought $2.53 billion from the local equity market and $4.45 billion from the bond market.
The dollar index, which measures the US currency’s strength against major currencies, trading at 94.809, down 0.19% from the previous close of 94.985.
Source:livemint.com
Income held as undisclosed as assesse imported goods under import license but claimed assignment the
IT: Where assessee claimed that it had earned through assignment of import license but revenue found that assessee itself imported goods and sold same in open market, reopening and additions were to be sustained
Tribunal couldn't dismiss appeal before deciding on request for extension of time to make pre-deposi
Excise & Customs : Where Tribunal had dismissed appeal for default in compliance with pre-deposit without first deciding application for extension of time to comply therewith, High Court remitted matter back to Tribunal subject to compliance with pre-deposit
Issue relating to applicability of SSI-exemption isn't maintainable before High Court
Excise & Customs : Where issue that arises for consideration is 'what will be rate of duty that is payable by assessee, but for exemption notification in question', said issue cannot be raised in appeal under section 35G before High Court
Comparable rent paid for lease is deductible even if assessee charges higher rent from related party
IT : Where assessee having taken a commercial property on lease, sub-let it to its related concern, in view of fact that rent paid by sub tenant was much more than what assessee had to pay to lessor and, moreover, rent paid by assessee was a comparable transaction with a third party, impugned disallowance made by authorities below under section 40A(2) was to be deleted
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