Sum received for forgoing rights in development agreement upon termination of AOP wasn't taxable

IT: Settlement amount received by assessee for foregoing its rights upon termination of AOP entered into by assessee for jointly developing property, whereby assessee agreed to provide land as capital contribution, was not taxable as settlement deed practically put an end to AOP and transfer of title in land was distribution of capital assets of AOP on its dissolution

HC dismissed winding up plea as petitioner had suppressed fact in respect of summary suit filed at c

CL : Where petitioner suppressed fact in respect of filing of suit before competent Court, winding up petition filed by petitioner against respondent was to be dismissed

Co. selling own software product couldn't be compared with co. providing software development servic

IT/ILT : Where TPO made addition to assessee's ALP in respect of rendering software development services to its AE, in view of fact that one comparable was rendering said services by using its own IPRS in form of patents of software whereas assessee did not own any IPRS and, moreover, some other comparables were found improper on account of selling their own software products, impugned addition deserved to be set aside

Scrap arising of manufacture of exempted goods would continue to be exempt even if duty is wrongly p

Excise & Customs : Erroneous payment of duty on 'exempted final product' would not make them 'not exempted'; hence, even if duty is wrongly paid on 'exempted final product', waste and scrap arising in course thereof would continue to be 'exempted'

Cash deposits couldn't be held as unexplained when depositors explained source of deposits

IT: Where assessee produced depositors before Assessing Officer who confirmed deposits with assessee and also explained source of their deposits which had not been doubted, deposits being genuine, addition under section 68 could not be sustained

No concealment penalty when sec. 80P relief, wrongly claimed by assessee, was withdrawn by filing re

IT : Penalty under section 271(1)(c) could not be levied on assessee where in original return assessee claimed exemption as per provisions of section 80-P(2)(d) but immediately on knowing about its non-applicability a revised return was filed disclosing accurate income

An Ambitious South Indian Port Bets On Policy Shift To Steal Colombo Trade

A southern Indian port has established the nation’s newest facilities to handle the world’s largest ships.

The catch? It needs a policy change to bring in the vessels.

Foreign ships are barred from moving cargo between Indian ports themselves. What’s more, congestion, slow turnaround and shallow waters have deterred large vessels from docking locally, sending their cargo to Colombo and Singapore instead. India can potentially recover $260 billion in lost shipping trade annually as Prime Minister Narendra Modi moves to scrap the law under his Make in India push to gain investments.

“We have the infrastructure,” said Chinta Sasidhar, managing director of Krishnapatnam Port Co., which built and manages the port of the same name. “To achieve Modi’s vision, we first need to come out of these laws, get back our cargo to our country, so that ships can straightaway steam up, have internal business.”

More than half of cargo headed in and out of India goes through foreign ports led by the Sri Lankan capital, Colombo, and Singapore. Ships handled 68% of India’s $786.2 billion trade in 2014, according to government data compiled by Bloomberg.

“This government is listening to us,” Sasidhar said in an interview from his office at Krishnapatnam port. “They are moving, but it is not easy because these are rules which were laid long back.”

Sasidhar said he expects the shipping law to be abolished within six months.

Shipping route

Scrapping the regulation won’t necessarily mean bigger vessels docking at the port because the Indian coast doesn’t fall on the main shipping route, said Jayendu Krishna, a director at Drewry Maritime Services Pvt. in Singapore.

“No shipping company would really prefer to do a transshipment unless it leads to some cost savings,” he said.

While the waiver may not help Indian ports to attract traffic bound for Singapore and Colombo, they may manage to get some of the cargo headed for countries such as Bangladesh and Myanmar, said Anand Sharma, a director at Mumbai-based Mantrana Maritime Advisory Pvt.

“For any Indian port to ever replicate Singapore or Colombo, it has to be a big port located on the tip of Kerala and not Krishnapatnam,” Sharma said.

India’s ports have suffered from investments made in a “somewhat haphazard piecemeal fashion” and lack of transport links, according to a government report.

Krishnapatnam port, in Andhra Pradesh state, has a four-lane road linking it to the national highway, a railway line right up to the berths and two helipads for greater connectivity and faster turnaround.

Biggest vessels

Its maximum draft of 18 meters, exceeding that of Colombo and Singapore, means it can handle the biggest ships capable of carrying 18,000 twenty-foot containers, Sasidhar said. Currently, port operations in India are dominated by state-run enterprises.

While a limited capacity and shallow-water berths have deterred foreign vessels, the main obstacle is India’s policy of reserving intra-port trade for local ships, Sasidhar said.

We may have “the largest cranes and the deepest berth, but the ship won’t come because he doesn’t have business,” he said.

Container handling charges in India are also “fairly high” compared to Singapore and Colombo, Drewry’s Krishna said.

That may change if Modi realizes his vision. Under the Make in India campaign, the nation aims to boost the share of manufacturing to 25% of gross domestic product (GDP) by 2022 from 18% now.

For that policy to succeed, companies need to be able to export from local ports, Sasidhar said. The first step is to ensure India is capable of handling its own cargo, he said.

“The impression of the world is that we can’t handle much cargo,” Sasidhar said. “We want to now give the impression to the world that there are ports in India which are very aggressive.” Bloomberg

Source:- livemint.com

No denial of trust's registration as none of the objects clause was found non-charitable in nature

IT: Where nowhere in objects clause of trust deed it was found that object of trust was for non-charitable one, denying registration under section 12A was not justified

High Court strikes down DVAT provision as it sought to levy VAT on deemed sale price of petrol

CST & VAT: Delhi VAT: Where VAT had been levied on oil products sold by oil marketing companies to dealers and value for such transaction has been taken to be sale price at which dealers sell such oil products to ultimate consumers; since value represents sale price of a future event, levy of tax on such value is constitutionally invalid.

AO may demand cash security for issuance of way bill under West Bengal VAT Act

CST & VAT: West Bengal VAT - Where assessee made an application on 4-5-2015 for issue of way bill and Assessing Authority, as per newly amended provisions of rule 110 substituted with effect from 1-4-2015, for issuance of way bill demanded cash security, impugned order was strictly according to provisions of Act

Inverted Duty On Rubber Needs To Be Addressed: Dgft

Director General of Foreign Trade (DGFT) Pravir Kumar said that existing inverted duty in rubber sector is a valid concern and should be looked into earnestly.

"Inverted duty structure is an issue which needs to be addressed. It impacts the production domestically and thereby exports in any sector," Kumar said while addressing the National Rubber Conference organised by All India Rubber Industries Association (AIRIA) here.

If import duty on raw material is higher than the finished goods, then it naturally disincentivises the domestic production, he pointed out adding that the DGFT will take up the issue with the concerned department.

Currently, import duty on raw natural rubber is between 5 and 70 per cent, while import duty on finished rubber goods is below 10 per cent.

On the industry's demand to allow second hand capital goods under the Export Promotion Capital Goods (EPCG) scheme, Kumar said, "I am sorry that goes against the very philosophy of the scheme, which is for the modernisation of the industry, technological upgradation.

"It is the conscious decision of the government not to allow second hand capital goods under the scheme. You are welcome to bring new and advanced technology and machineries without paying duty under the scheme. It would be difficult to support second hand capital goods under the scheme," he noted.

Speaking at the event, AIRIA President Mohinder Gupta said: "The export potential of rubber industry is immense and exports can be doubled if certain policy enablers are in place. Inverted duty needs to be corrected urgently and import duty needs to be waived off on those raw materials which are not available domestically."

"Not only import duty on raw materials is higher than finished products, the government levies anti-dumping and safeguard duty on raw materials such as rubber chemicals and carbon black which affects cost competitiveness of the industry," Gupta said, while demanding hike in import duty on finished rubber products.

India is deficient in both natural rubber and synthetic rubber production, so import of raw materials is inevitable. Higher import duties on raw materials such as natural and synthetic rubbers has affected the growth of rubber sector in India, the industry body said.

The rubber industry also asked for creation of a separate export promotion council for rubber sector in India.

Rubber exports have been increasing in double digits for several years and currently the export turnover of the rubber industry including tyre and non-tyre is over Rs 17,000 crore, it added.

Source:- auto.economictimes.indiatimes.com

No Breaks For Coal Miners From China, India Imports: Russell

It seems coal miners and traders just can't catch a break, with a rebound in China's imports being tempered by early signs of a turning point in India's import growth.

The main problem for coal exporters such as Australia, Indonesia and South Africa is that China's surge in imports in July is unlikely to be sustained, while India's decline may well be the start of a longer-lasting trend.

China, the world's biggest producer and importer of coal, brought in 21.26 million tonnes in July, up 28.1 percent from June's 16.6 million and the highest in eight months, according to customs data released Aug. 8.

However, imports are down 7.7 percent on a year earlier and down 33.7 percent for the first seven months of 2015, making July's month-on-month result an outlier in a overall weakening trend.

It's also likely that July's strength will remain an exception, rather than herald the reversal of the existing trend.

Traders believe the gain in imports came after Chinese domestic producers limited supply in a bid to bolster prices, with more than 70 percent of miners suffering losses in the first half of the year.

Domestic prices have fallen sharply this year, with benchmark thermal coal at Qinhuangdao port SH-QHA-TRMCOAL ending last week at 410 yuan ($66.13) a tonne, down 22 percent since the end of last year.

In contrast, benchmark Australian thermal coal at Newcastle port ended the week to Aug. 7 at $59.54 a tonne, down 7.5 percent from the end of 2014.

While the Newcastle index is still mired near the 8-year low of $54.37 a tonne from April, Australian miners haven't suffered as much as their Chinese counterparts this year, and have also had a longer time to adjust to the reality of falling prices, given the current four-year losing streak.

Lower domestic prices may ultimately lead to extended pit closures in China, but the short-term impact is more likely to be to render imports less competitive against local production.

With Beijing also ordering the shutdown of industries to improve air quality ahead of a parade to commemorate the 70th anniversary of the end of World War Two, coal demand may also drop in August and into September.

However, the overall trend of China trying to limit coal use remains intact, as does the stricter quality standards for imports of the fuel blamed for most of the country's pollution problems.

This makes it unlikely that China's coal imports have turned a corner and will resume growing. However, it does make it more likely that volatility in monthly figures will increase as traders try to arbitrage domestic and international prices.

INDIA HOPES FADING?

The great hope for coal exporters in Asia has been India, and the 11 percent slump in imports to 19.3 million tonnes in July from the same month a year earlier will cause consternation among miners.

July's drop was the first in 15 months and was largely the result of lower demand from power generators, according to commodities trader mjunction, which supplies the data.

If there is a positive in the decline in July's imports, it's that the demand is still there. What's lacking is the money to pay for power generated from imported coal.

Power distributors in India are struggling to pay for electricity given high levels of debt and uneconomic regulated pricing regimes that result in financial losses.

However, there are some signs that state-controlled behemoth Coal India is making progress in lifting output in line with the government's desire for domestic production to reach levels that would make imports unnecessary.

Coal India boosted output in the fiscal year to end March to 494 million tonnes, which was 3 percent below the targeted 507 million tonnes, but still 32 million tonnes more than the prior year.

This increase was more than the cumulative 31 million tonnes of growth in the four years from 2010 to 2014, according to a report in The Hindu newspaper on Aug. 8.

Coal India's output rose 12 percent to 121.3 million tonnes in the April to June period this year as it opened new mines and received approvals to expand existing facilities.

However, the company is still a long way from meeting its target of 1 billion tonnes by 2019-20, and it will have to add more than 100 million tonnes of output every year from now until then to meet the target.

While this would seem unlikely, even partial success will hurt demand for imports, which may drop 3 percent to 210 million tonnes this fiscal year, according to Coal Minister Piyush Goyal.

This is based on a coal requirement of 910 million tonnes, up 10 percent from the prior year, and total domestic output of 700 million tonnes from Coal India and other miners, up 15 percent.

This seems a reasonable forecast, and if achieved, would end India's run of rising annual imports, which dates back to 2004, according to data from the U.S. Energy Information Administration.

Overall, there are reasons to be optimistic that India may manage to curb its appetite for foreign coal, while at the same time there are reasons to be pessimistic about a revival of Chinese import demand.

Source:- in.reuters.com

Govt Mulls Sugar Export To China Under Preferential Quota

Government is considering a proposal to allow sugar mills to export to China under the preferential quota system as part of a strategy to help them liquidate surplus stocks.

India exports 10,000 tonnes of white sugar to the EU and 8,100 tonnes to the US through the preferential quota system, under which exports are permitted at low tariffs. After the quota is reached, a higher tariff is applied on additional exports.

Food Minister Ram Vilas Paswan had said last week that the government is considering barter trade of sugar against import of farm items like pulses from some countries.

"Besides barter trade, we are exploring sugar export under the quota system to China. We are also looking at giving sugar as part of the aid programme to African nations," a senior government official told agency.

The commerce and external affairs ministries are holding discussions with various countries and their missions in India on this issue, the official added.

On sugar exports under the quota system, the official said, "We have been selling sugar to the US and EU markets under the preferential quota system. We can explore the same with China, which imports about 3-4 lakh tonnes of sugar annually from India."

The government is also in discussions with other countries like Canada, Indonesia and Malaysia to know if there is a possibility to barter sugar for vegetable oils and pulses in those countries.

India has managed to export 1.26 million tonne sugar in seven months to April 2015 at a time when the world market is facing a glut situation, as per the official data.

Although exports via normal route are not viable now due to sharp decline in global prices, the government is trying all options to push export of 4 million tonnes of surplus sugar to help cash-starved domestic mills make payment of dues over Rs 14,000 crore to cane farmers.

The sugar industry is unable to make payment as it is facing severe liquidity crunch on account of surplus production that has resulted in low prices of sugar in domestic markets.

Sugar output has exceeded domestic demand in the world's second largest sugar producing country for the last five years and the trend is expected to continue in this marketing year (October-September) too.

The country is estimated to produce 28 million tonne sugar in 2014-15 marketing year, against annual demand of 24.8 million tonne. There is still surplus stock of 10 million tonne in the country.

Source:- moneycontrol.com

Mistake of issuing block assessment notice on non-existent entity couldn't be cured by resorting to

IT : Where subsequent to search Assessing Officer issued notice under section 153C to assessee-company as by that time assessee was already amalgamated into another company, as completion of assessment in respect of a non-existent company was a nullity and also same could not be cured under section 292B

Indian Rupee Gains 4 Paise Against Us Dollar In Early Trade

Snapping its three-day falling streak, the rupee recovered 4 paise to 63.77 against the US dollar in early trade today on fresh selling of the American currency by exporters and banks amid a higher opening in the domestic equity market.

Selling of the American currency by exporters and banks supported the rupee, but dollar’s strength against other currencies overseas capped the gains, dealers said.

Besides, a higher opening in domestic equity market helped the rupee, they added.

The Indian rupee had shed four paise at 63.81 against the US dollar in Friday’s trade on sustained demand for the American currency from banks and importers.

Meanwhile, the benchmark BSE Sensex recovered by 62.59 points, or 0.22 per cent, to trade at 28,298.98 in early trade.

Source:- financialexpress.com

Trust can earmark its existing fixed deposits for future application to claim exemption under sec. 1

IT : In order to claim deduction under section 11(2) it is not necessary that deposits have to be made out of current year's income; earmarking of existing fixed deposits, which is free from any lien, towards income accumulated under section 11(2) during year under consideration would be sufficient compliance

Liability of creditors ceased to exist under sec. 41(1) when they didn't demand anything for more th

IT : Where assessee could not provide addresses, confirmation, etc., from two creditors and it was found that in last so many years those parties had never been seen by anybody and they had also not made any demand from assessee for last more than 10 years, liability in respect of said creditors was considered as having been ceased under section 41(1)

Supplies made in retail packs even to institutional consumers shall be valued at Abated MRP

Excise & Customs : Notified goods sold in retail packs with declaration of retail sale price and without any marking 'not for retail sale' are to be valued as per section 4A of Excise Act even if said goods are cleared in bulk to industrial/institutional buyers

Debit note raised by foreign buyer for carrying out repairs on goods exported by assessee was allowa

IT : Where foreign buyer carried out minor repairs on products exported by assessee and raised debit notes against it which were debited by assessee as expenditure in books of account, such expenditure was to be allowed while computing profits of assessee