CL: Legality and validity of sale of mortgaged property under SARFAESI Act has to be brought for scrutiny before Debts recovery Tribunal; jurisdiction of Company Court is ousted
Tuesday 28 July 2015
AO gets flak from ITAT for disallowing business exp. on the ground that no business receipts were ea
IT: Opinion of Assessing Officer that assessee was not carrying on any business as no business receipt was earned, was erroneous and unsustainable; and expenditure incurred on salaries of software professional was allowable under section 37(1)
Preoperative exp. incurred to expand existing business was revenue exp.
IT : Where assessee company expanded its existing business and claimed said expenses as pre-capitalisation cost, same was to be treated as revenue expenditure
“Nasty” Fungus Slows Indian Mango Exports In 2015
The EU import ban on Indian mangoes was lifted. Growers and exporters had renewed energy and expected to supply high volumes at solid prices to global markets. They were even setting up shipment trials in new importing countries. However, all these positive developments were dampened by heavy rainfall at home.
“A mixed bag” is the way one Indian mango official describes the overall crop and export campaign of 2015. “One the one hand we could ship to European Union markets like the U.K. because it was open again, but on the other hand the quality just was not there this time around,” D.K Sharma, of the All India Mango Growers Association (AIMGA).
“Heavy rainfall earlier this year during March and April in particular, put paid to what was expected to be a very good season, especially because Indian mangoes were back in the EU.”
The major mango-growing states of Andhra Pradesh, Uttar Pradesh, Karnataka, Bihar, Gujarat and Tamil Nadu are where hundreds of different varieties are grown, although the export market tends to focus on key cultivars such as the Banganapalli, Suvarnarekha, Neelam and Totapuri.
In addition, Maharashtra mainly grows Alphonso mangoes which are very popular in the British and EU markets. Many of these states were battered by downpours that coincided with growers harvesting their crops across the production belt, leading to poor quality.
Although the main importing countries like the United Arab Emirates, Saudi Arabia, Kuwait, Qatar, Bangladesh, Nepal and the U.K. still imported the Indian ‘king of fruits’, prices were pushed up because of limited availability and the anticipated high volumes were washed out. “Due to the extremely heavy rain in many parts of the country – not only was the quality affected but a nasty fungus set in.
“The outside of the mango skin was a black color and the fungus ran through the fruit which of course meant that large quantities of mango were just not up to the mark and no good for export. “Somehow a type of infection on the upper surface of the mango set in and the appearance deteriorated.”
Sharma says this can happen when a delicate fruit like mango becomes saturated with water and growers may not have initially realized their crops were so badly damaged.
“We carried out assessments and found much more of the overall production volume was damaged. However, the fungus did not show up at first and farmers may have thought everything was fine when in fact it was not.”
Despite the setbacks, India’s total mango production this season fell just short of 43,000 metric tons (MT), according to statistics from the Agricultural & Processed Food Products Export Development Authority (APEDA).
However, overall export quantities do not look too bad when compared to last season. During the 2013-14 campaign 41,280MT were exported, 55,584 MT went overseas in 2012-13, and 63,441MT were shipped in 2011-12.
“The figures for this year do not seem out of place, although from a production point of view there could have been much higher export volumes this season, if it were not for the dip in quality,” says a spokesman for the Indian National Horticultural Board.
“The rains really dented the quality and the farmers just couldn’t rescue much of the crop. It’s sad, but it happens all of the time in agriculture.” Elsewhere, the sector was bolstered by a new agreement with Mauritius and mango shipments resuming to Japan.
In order to capitalize on the Japanese market, which has been negligible for the last few years, APEDA agreed to cover the costs for a Japanese quarantine inspector to be based at a government-backed vapor heat treatment facility to help make the fruit competitive in the East Asian market.
Earlier this year, exporters agreed to supply a minimum of 50-70MT during the 2015 season, increasing to 100MT for 2016 and 150MT in 2017.
In other markets, nominal volumes were supplied to Mauritius for the first time following a new agreement between the two countries. The forecast is an annual supply to the island nation between April and August. Despite the disappointments, Sharma remains philosophical.
“The season is basically at an end now except for a few supplies here and there. “Although it’s true that this is not a good season for the Indian mango industry, next season could be better. Who knows because it will depend on the climatic conditions, as it always does. Here in India, farmers are at the mercy of the elements.
Source:freshfruitportal.com
Unclaimed amounts of policy holders to be invested in money market instruments and FDs in scheduled
INSURANCE : Handling of Unclaimed Amounts Pertaining to Policyholders
Desi Tyre Companies Reel Under Onslaught Of Chinese Imports
The tyre industry is burning rubber over the issue of cheap Chinese imports. A huge influx of imported tyres in the past 12 months is causing Indian tyre companies a lot of heart burn in the truck, bus and car radial replacement market.
Sources in the tyre industry say already imported tyres comprise a staggering 20% of the car and 25% of the truck radial replacement market which makes the import segment market leaders instead of local biggies like JK Tyre, Apollo, MRF or Ceat.
Tyre dealers, on the other hand, say the imports meet local quality standards, are duly BIS certified and are cheaper than Indian tyres because they have passed on the reduction in raw material prices. With both the domestic industry and the tyre dealers demanding action from the government, the issue is poised for a bumpy ride ahead.
Said Vikram Malhotra, director-marketing, JK Tyre: "We are getting badly injured by the flood of imports because they are typically priced 20-30% lower. Sometimes it's lower than our raw material price so we cannot match that. Imports were up 120-130% last year and this June it jumped 25-30% over May 2015.
We have been petitioning the government but there has been no assurance as yet." The problem, he said, was that the imported tyres pay lower duty than the Indian companies pay for raw material due to the Asean agreement. "The tyre imports pay 5-7% duty while we pay 25% on raw material like rubber so it's a double hit for us," said Malhotra.
The bone of contention is the 3-3.5 lakh units per month truck radial replacement market and the 12-14 lakh units per month car radial replacement market. While vehicles come fitted with made in India tyres, replacement demand is now driving towards imports from Taiwan, Korea and China instead. Meanwhile MNC tyre biggies say their quality will set them apart even as Indian tyre companies want anti-dumping duty.
"Over the past few weeks there has been an increase in import of Chinese tyres into India. We are not unduly bothered about these as we know what Michelin quality is. Besides, we compete with all the tyre manufacturers all over the world," said Nour Bouhassoun, chairman and president, Africa-India-Middle East, Michelin.
Tyre dealers, though, say the imports are consumer friendly because they reflect global raw material prices better than locally made tyres. Said SP Singh, convenor, All India Tyre Dealers Association (AITDA): When the government mandated BIS quality certification for all tyres sold in India it created a two-year import lull as imported brands ought necessary certification. During that time, local tyre companies hiked prices by 25-35%. Today raw material prices have come down to 2009 level but the sharp price hike has not been rolled back. But imported tyre prices have come down in tune with the drop in rubber and other raw material prices so they are more affordable."
AITDA has now locked horns with domestic industry in seeking that no anti-dumping duty in imposed on imported tyres. "The domestic industry is in the habit of seeking tariff and non-tariff barriers but the truth is that 80% of truck and bus tyres in the replacement market are nylon fabric tyres on which there's already an anti-dumping duty," said Singh. "Domestic industry started this campaign against imports way back in 2005.
In 2008, domestic industry went to the government and got restriction on import of truck and bus radials. This was lifted in 2010 after AITDA and truck operators pressed for it. But domestic industry still got anti-dumping duty imposed on truck and bus radial imports. In 2011, the imposition of anti-dumping duty on truck bus radial was struck down by customs, excise and service tax tribunal and domestic industry moved court. The matter remains sub judice even now," he added.
Tyre dealers say the reason for the spurt in imports is due to the fact that the imported brands now have the BIS certification required to sell in India. "In 2009, the government put in place the tyre quality control order so all locally made and imported tyres had to get BIS certification," said Singh.
Source:timesofindia.indiatimes.com
Petrol And Diesel Prices May Come Down From August 1
Consumers can expect a reduction in petrol and diesel prices on August 1 when oil marketing companies review rates, thanks to falling global prices. International crude oil prices declined to their lowest in about four months on Monday.
“The drop in global oil prices would have positive bearing on India’s economy as the import bill would come down... the current account deficit would also remain in check,” minister of state for finance Jayant Sinha told HT. On July 16, oil marketing companies, led by Indian Oil Corp Ltd, reduced the retail prices of petrol and diesel each by `2 per litre.
India imports nearly 80% of its energy needs, on which it gives a subsidy. While budgeting its subsidy outgo, the government had factored in a global price of $70 a barrel and an exchange rate of `63 to a US dollar. While the Indian import crude basket is currently hovering around $54 a barrel, the rupee-dollar rate is at `64.17.
In Budget 2015, finance minister Arun Jaitley had earmarked `30,000 crore for subsidies towards petroleum products. According to data by the Controller General of Accounts, till May 31, just over `8 crore out of the budgeted subsidy for 2015-16 has actually been disbursed.
Carsten Fritsch, senior oil market analyst at Commerzbank, said over phone from Frankfurt that the oversupply in the global market is currently hovering around 1.5-2 million barrels per day.
Source:hindustantimes.com
Auction of goods is illegal if they were seized without evidence
CST & VAT: Tripura VAT - Where Officer-in-charge of Churaibari check-post [Tripura State] checked a truck carrying goods of assessee from Guhawati to Agartala by way of stock transfer and taking view that value of goods given in documents was incorrect seized goods and thereafter Commissioner had sold goods in a public auction, entire action of revenue authorities was totally illegal
India: Oil Imports From Saudi Arabia Down 8%
India has cut crude oil imports from its top supplier Saudi Arabia by over 8 per cent in 2014-15 as it raised purchases from Africa and Latin America in an apparent bid to cut reliance on volatile Middle-East.
Crude oil import from Saudia Arabia was cut to 34.99 million tonnes in the year to March 31, 2015 from 38.18 MT in 2013-14, Oil Minister Dharmendra Pradhan said today.
While imports from sanction-hit Iran were almost flat at 10.95 MT, shipments from Kuwait fell to 17.85 MT from 20.35 MT. Imports from Iraq were almost flat at 24.51 MT but the same from UAE rose 15 per cent to 16.11 MT.
Overall, imports from Middle East fell by over 5 per cent to 109.88 MT, he said in a written reply to a question in Lok Sabha here. Crude oil imports from Africa and South America rose 10 per cent each as Indian refiners bought more heavier but cheaper grade oil, he said.
Indian refineries have consistently reduced imports from traditional markets like Saudi Arabia and stepped up purchases from newer geographies like Mexico and Venezuela as imports have become viable due to availability of cheaper variants and softening of shipping cost.
India imported 189.44 MT of crude oil in 2014-15, almost unchanged from the previous fiscal, to meet over 80 per cent of its oil needs. Saudi Arabia was the top supplier with 34.99 MT with Iraq being number two.
Venezuela was a very close third with 24.40 MT of oil supplies, 13 per cent higher than 2013-14. With 17.82 MT of crude oil supplies, Nigeria was tied with Kuwait for the fourth spot.
Pradhan said imports from Africa rose to 33.05 million tonnes in 2014-15 from 30.39 MT in the previous year. They went up from South America too, to 34.46 MT from 31.73 MT in 2013-14. Mexico supplied 5.06 MT of crude oil in 2014-15, marginally higher than 4.94 MT a year ago.
Pradhan said imports from Iran, which was once the second biggest crude oil supplier to India, was 10.95 MT, almost unchanged from 11 MT in 2013-14. In 2012-13, India had imported 13.14 MT of crude oil from Iran.
New Delhi has maintained crude oil imports from Iran at 2013-14 level as the US looked to financially choke Tehran to bring it to negotiating table on its controversial nuclear programme.
Pradhan said Prime Minister has set a target for reduction in import dependency in energy by 10 per cent to 67 per cent by 2012-22, from 77 per cent dependency in 2013-14.
“A Committee has been constituted under the Chairmanship of Additional Secretary, Ministry of Petroleum and Natural Gas, to prepare a roadmap in order to achieve the target,” he said.
Source:hellenicshippingnews.com
India: Steel Firms Cut Prices As Imports Pour In
Local steel makers are cutting prices to avert loss in market share as cheaper imports from China, Korea and Japan flood the market. Hot-rolled steel prices dropped by Rs.3,000-4,000 a tonne in the April-June quarter, said Vikram Amin, executive director, strategy and business development, Essar Steel India.
As on 1 July, the average price of hot-rolled steel was Rs.36,100 per tonne in Delhi, according to data available with the Joint Plant Committee (JPC) of the steel ministry.
This, industry experts and traders say, has led to a gap between the landed cost of imported steel and domestic steel prices narrowing down in the last few months, a clear indication of steel companies focusing on volumes and giving up on margins.
During the March-April period, the landed cost of imported steel in the hot-rolled category in India was lower by about Rs.2,000-3,000 per tonne, said Ajay Srinivasan, director, Crisil Ratings. This gap, Srinivasan said, has narrowed to Rs.1,000 per tonne now.
Vivek Gupta, vice-president, Indian Chamber of Steel, and a leading steel dealer in Mumbai said for a broader category of steel products, the difference between imported and domestic steel prices has narrowed from a range of 15-20% in April to 5-15% now, depending on the product category.
Amin from Essar added that the domestic steel price correction is a result of cheap imports and the depreciation in the currencies of various steel exporting countries.
According to JPC data, total finished steel imports by India rose 53.1% in the April-June period on a year-on-year basis. The average spot price of hot-rolled steel sheets in China, a major exporter for steel to India, corrected 12% from April to June-end.
“There is a surge in volumes in imports due to dumping, resulting in squeezing the margins of domestic companies,” said Jayant Acharya, director (commercial and marketing), JSW Steel Ltd. He did not share details on the steel price movement as the company is in its silent period ahead of its earnings report next week.
JSW Steel produced the highest ever quarterly crude steel volume of 3.4 million tonnes for the June quarter, it said in a statement on 13 July. The company is yet to disclose the sales figure for the same period.
Tata Steel Ltd said its sales volumes for the June quarter rose 2% to 2.14 million tonnes in a statement sent to BSE on 9 July. “Being an industry with high capital investments and hence high fixed cost, focus is generally on increasing capacity utilization to recover maximum fixed cost and improve margins in spite of reduction in prices,” said a SAIL spokesperson.
“Falling international steel prices have affected domestic prices of steel. The average price realisation for SAIL has dropped by 17.4% in the June quarter with respect to the corresponding period last year,” the SAIL spokesperson said.
Srinivasan of Crisil Ratings explained, “Notwithstanding the weak rupee and rise in import duty, domestic steel makers are under tremendous pressure with steel prices falling globally. Domestic steel makers have been forced to bring down prices, focusing on volumes than margins.”
Jimesh Sanghvi, an analyst at IL&FS Broking Services, in a 9 July note said the drop in steel prices will adversely impact integrated steel players such as Tata Steel and SAIL. Some expect pressures on margins to continue in the September quarter.
Srinivasan expects global steel prices to fall below $370-390 per tonne. “This (global price correction) will force domestic steel companies to follow suit,” Gupta said. In addition, July-September is a weak quarter for steel companies. “The demand and prices start to pick up after October. We expect the same trend to continue even this year,” said Amin.
Source:hellenicshippingnews.com
Rajesh Exports To Venture Into Gold Mining In 2-3 Years; Expand Refinery, Retail Stores
Rajesh Exports acquired Valcambi in an all-cash deal of $400 million on Monday. Rajesh Exports Limited on Monday announced its 100% acquisition of Valcambi, the world's largest gold refinery in an all-cash deal of $400 million.
Valcambi has, for the last three years, been producing over 900 tonnes of gold on an annual average, which means, that gold from the company alone could be enough to satiate India's annual average gold import which usually hovers around 800 tonnes.
Rajesh Exports also announced its plans of foraying into gold mining in the next 2-3 years. On a more immediate basis, the company will upgrade and expand its existing refinery at Rudrapur in Uttarakhand.
1-2 years, we are planning to expand our refinery in Uttarakhand with world-class technology from Valcambi. This will be under the 'Make in India' initiative that help us in providing international raw material in the domestic market," Rajesh Exports' managing director Prashant Mehta said.
One of the main reasons for the acquisition cited by Mehta was to meet the raw material requirement, which is deemed difficult. "The consistent supply of raw material is a big issue. With this acquisition, there will be smooth supplies at lower prices," he said.
The acquisition will help boost revenues and profitability of Rajesh Exports in coming years, he added. The company expects to become debt-free in four years, he added.
Going forward, Rajesh Exports said the company, which has a controlling market share (50%) in supplying raw materials to 14 states, is also planning to expand the number of stores under its retail brand 'Shubh' to 450 from the existing 82 in the next three years.
In Monday's trading session, Rajesh Exports' stock price rose to a high of Rs 549.95 a share, before closing at Rs 540.10, up 2.09% from previous day's close.
Source:dnaindia.com
Rupee Appreciates Against Us Dollar
Snapping its four-day losing streak, rupee advanced 7 paise to 64.09 per against dollar in early trades today. The local currency had closed at a fresh six-week low of 64.16 on Monday amid persistent demand for the greenback from banks and importers.
All eyes were on the US Federal Reserve's two-day meet beginning later in the day. Cues on when the US apex bank will start raising interest rates will be a key factor that may drive dollar movement in the near future.
"While our US economists expect a September rate hike, they think that the FOMC statement would emphasize data dependence and eschew any overt signals about the timing of liftoff," said BofA-ML in a research note. JPMorgan too expects the US Fed to start hiking rates in September.
In an interview to ET, Adrian Mowat of JPMorgan said, "Our base case is the US Federal Reserve will exit zero interest rate policy in September meeting. We expect fair amount of guidance post the July meeting with regard to exiting zero interest rate policy in the September."
Dollar index, which tracks the movement of dollar against a trade-weighted basket of six major world currencies, stood almost flat at 96.52.
"We do not expect the RBI to offer anything more than a token resistance at Rs 64/dollar given that the rupee is seasonally weak in August. With our equity strategists expecting BSE Sensex stocks to post zero per cent profit growth, it is natural that portfolio flows will stall," the BofA-ML note said.
The brokerage though expects the Governor Raghuram Rajan to sell $15 billion of dollars to defend Rs 65 per dollar levels.Bofa-ML's FX strategist, Adarsh Sinha, sees rupee at 64 per dollar in September.
Source:economictimes.indiatimes.com
Cap gain of inherited asset is to be computed by taking CII of the year in which asset is acquired b
IT : As per section 49 where capital asset became property of assessee by succession or inheritance, then cost of acquisition of said asset shall be deemed to be cost for which previous owner of said property has acquired it
Delhi High Court allows 'Red FM radio' to participate in e-auction of FM Channels
CL : Where petitioner radio broadcasting company was denied security clearance and its application for pre-qualification for e-auction of first batch of private FM Radio Channels (Phase – III) was rejected on ground that two of its shareholders had been prosecuted under Prevention of Money Laundering Act, impugned decision denying security clearance to petitioner company was to be quashed as those two shareholders were not directors in petitioner company and controlling interest vested with othe
Loading, unloading and shifting of goods within factory doesn't amount to Cargo Handling Services
Service Tax : Loading, unloading and shifting of sugar bags within sugar factories would not amount to Cargo Handling Services and would, therefore, not be liable to service tax
Running an Allopathic Hospital isn't ultra vires to object of improving Ayurvedic system of Medicine
IT : Where the objects of the trust include "(2)Devising means for imparting education in and improving the Ayurvedic system of Medicine and preaching the same. In order to gain objects No.2 it is not prohibited to take help from the English or Yunani or any other system of medicine and according to need one or more than one Ayurvedic Hospital may be opened.",it cannot be held that running an allopathic hospital is ultra vires to the objects of the trust and exemption u/s 11(1)(a) cannot be deni
Transport, insurance and interest subsidies received by industrial undertaking were eligible for sec
IT : Where amount of transport subsidy, interest subsidy, insurance subsidy and power subsidy had direct nexus with profits and gains derived by industrial undertaking, deduction under section 80-IC has to be granted in respect of subsidies so received
Offerings received in donation boxes of temple can't be taxed as black money under Sec. 115BBC
IT: Section 115BBC is not applicable to institutions like that of assessee trust being a temple or shrine; provisions of this section are meant to check inflow of unaccounted/black money into system with a modus operandi to make out as a part of accounts of institutions like university, medical institutions where problem relating to receipt of capitation fees, etc. is generally highlighted.
Normal loss of finished goods is also liable to duty unless remission application is filed for such
Excise & Customs : Limit of wastage specified by Circular is outer limit and cannot be read as amounting to 'lesser production or not manufactured' so as to give go-by to rule 21; hence, even if alleged loss is within permissible limits, assessee must file remission application under rule 21 and without same, duty is payable
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