IT : Where there was complete disclosure of facts by assessee that an amount of Rs. 1.11 crore, which was received on account of a project not being fructified, was credited to partner's capital account and assessee's claim was not found acceptable, no penalty could be imposed on assessee under section 271(1)(c)
Tuesday 18 August 2015
Separate comparables should be chosen for different business activities carried by an enterprise
IT/ILT : Where TPO made addition to assessee's ALP by combining its three business activities, namely, manufacturing, physical trade and merchanting, matter was to be remanded back for disposal afresh with a direction that margin of three different activities should have been separately calculated and compared with margin of comparables enterprises
Broker couldn't question jurisdiction of Arbitral Tribunal after opting for it to address investor's
Arbitration Act: Where petitioner, trading member of stock exchange, itself opted for arbitration in terms of SEBI's Circular with regard to Investor Grievance Redressal Mechanism, its contention with regard to jurisdiction of Arbitral Tribunal to arbitrate claims filed by respondents need to be rejected
Service of order to daily wager 'Kitchen boy' is not valid as he is not authorised agent of assessee
Excise & Customs : Daily wager 'Kitchen boy' cannot be said to be an authorised agent of assessee; hence, service of adjudication order on him is not a valid service as per section 37C of Central Excise Act, 1944
Even though shuttering material in itself is a plant, yet every individual article/unit/component of
IT : Even though shuttering material in itself is a plant, yet every individual article/unit/component of shuttering material cannot be treated as plant and, thus, assessee, a contractor, was not entitled to claim 100 per cent depreciation on centering/shuttering material
Cos with high related party transactions and extraordinary events can't be selected as comparables
IT/ILT : Where TPO made addition to assessee's ALP is respect of rendering software development services to AE, in view of fact that certain comparables selected by TPO were developing their own software products whereas some other comparables were improper on account of high RPT and happening of extraordinary event like amalgamation, impugned addition was to be set aside
Dept. of info and public relation didn't abuse dominance in procuring ads space in print media
Competition Act, 2002: Where the advertisement expenditure of Department of Information and Public Relations, of State Governments of Punjab, U.P, Tamil Nadu and West Bengal ('Opposite Parties') central was insignificant and was only about one-eight of total print advertisement expenditure, they could not be considered having dominant position in their respective relevant market in procuring the advertising space in print media
Interest on tax refund isn't taxable under sec. 44BB
IT/ILT : The amount of interest received on the refund of Income Tax is not includible in the amount on which the assessee is liable taxed under Section 44BB of the Act
Cotton Mills Forced To Scale Down Production By 15-20Pc
Representatives of the Confederation of Indian Textile Industry, South India Millers' Association, North Indian Millers Association, and Texprocil met in New Delhi on Monday to take stock of the situation faced by cotton spinning mills. Currently, the cotton spinning mills are facing crisis due to high input costs and subdued demand and thus decided to go slow on production.
In the meeting, it was decided to appoint an agency to study the gravity of the situation, prepare a memorandum, and send to the government.
Most of the mills have either already cut production by 15-20 per cent or are mulling to do so soon. Salem-based Sambandam Spinning Mills is one such. Its director S Dinakaran said that the mill is keeping operations suspended for one day every week, starting this month. This is the first time in 40 years that the mill has faced such a crisis that production has had to be scaled down.
While bigger players are resorting to a one-day production cut, smaller ones have opted to shut production for two days a week. The plight of cotton mills in north India, too, is similar.
What has added to the woes of the sector is the dramatic increase in capacity over the past few years on the back of incentives offered by various state governments. This, as well as a drastic fall in export demand, has put the sector in a shambles.
According to D K Nair, secretary-general, Confederation of Indian Textile Industry, the sharp decline in exports from a peak of 140 million kg a month last year to an average of 100 million a month in this quarter has put the spinning sector in doldrums. A 40 percent decline in export demand in such a short span was unexpected and the sector was not prepared for this. The devaluation of yuan might further hamper exports as Indian yarn has become more expensive in the international market in the after effects of Chinese currency's fall.
Dinakarn, who is also the chairman of Texprocil's yarn committee, said that the Chinese buyers have been delaying the LCs (Letters of Credit) and not opening the LCs. The mills are bleeding and there is no option other than suspending production. Of the 500 small mills in Tamil Nadu, most are keeping operations shut once or twice a week.
These mills are into blended yarn and fibre. Since there is no excise duty on cotton, the 100 per cent cotton yarn makers are disrupting production only once a week.
President of South Indian Spinners' Association, C Varadarajan said that as the textile sector is one of the largest employers, production cuts for a longer time could result in layoffs, resulting in labour unrest. The situation is precarious and the government should provide immediate relief to save the livelihood of millions engaged in textile sector.
There is also a need to revive the interest subvention, for release of pending TUF, and introduction of measures to expedite exports. According to experts, the delay in disbursement of Technology Upgradation Fund, or TUF, has affected the sector.
Source:yarnsandfibers.com
Modi To Bet $1.5 Billion On Palm Oil Plan As Imports Surge
India plans to spend $1.5 billion in the next three years to help farmers grow oil palm trees in an area the size of New Jersey, government sources said, with Prime Minister Narendra Modi pushing to make the nation self-sufficient in edible oils this decade.
Modi is targeting India’s $10 billion import bill for edible oils, its third-highest overseas spend after oil and gold, and has already been considering buying oilseeds directly from farmers and boosting government support for growing rapeseed, soybeans and peanuts.
A successful Indian push into palm cultivation would drag on international markets for the commodity, hitting Indonesia and Malaysia as they are currently the only major growers of the crop.
“We’ve identified nine states with suitable climatic conditions but we were apprehensive that the long gestation period would dissuade farmers from adopting the crop,” said one of the sources involved in the planning. He declined to be named as he was not authorised to speak with media.
“That’s why we’ve decided to earmark 10,000 crore rupees ($1.53 billion) that will largely be spent on supporting the farmers.”
Palm, the highest-yielding perennial edible oil crop, needs a fraction of the area used to grow other oilseeds, potentially attractive in a country like India where land is increasingly scarce as the population rockets.
But a gestation period of up to five years and laws limiting the size of each palm development have stymied previous efforts to switch to the crop, putting off local farmers as well as companies such as Ruchi Soya (RCSY.NS), Cargill and Bunge (BG.N).
However, the government hopes that its $1.5-billion backing will make the difference, with sources saying that direct support from Modi will also be key.
“It’s a pity that we couldn’t meet our earlier targets,” said the first source. “But he fact that the prime minister is giving a lot of impetus due to unbridled edible oil imports, we’re trying our best to make it happen this time.”
The government is mostly targeting fallow farmland in coastal states such as Maharashtra and Karnataka to grow palm on 2 million hectares, which could produce 8 million tonnes of oil annually once the crop bears fruit in about five years, another government source said. Food ministry spokesman N.C. Joshi declined to comment.
Indian consumption of vegetable oils has trebled over the last 20 years as the population grows and incomes rise, while output has increased by less than a third. That has forced it to become the world’s biggest importer of edible oils, with palm oil accounting for 80 percent of that.
Annual edible oil imports have risen 12 times to 14.4 million tonnes per year, with the product used to make everything from bhajis and biryanis to potato chips and noodles.
Togar Sitanggang, secretary general of the Indonesian Palm Oil Association, told Reuters that India’s plan would increase pressure on the Southeast Asian nation to use more biodiesel, made with palm, at home.The Malaysian Palm Oil Board declined to make immediate comment.
Since India’s first major attempt to cultivate palm more than two decades ago, the area devoted to the crop has risen to about 200,000 hectares from around 8,600 hectares.
The country last tried to boost palm cultivation in 2010/11 by setting a target to produce 4 million tonnes of oil in five years. Output has not risen above 70 tonnes a year. Some industry officials were sceptical the latest push would work without changes to the law.
“The bizarre rule that subjects (growers) to the land ceiling laws that don’t allow commercial cultivation of oil palm by private companies is the crux of the problem,” said B.V. Mehta, executive director of industry body the Solvent Extractors’ Association of India.
Unlike tea, coffee and rubber, India still does not recognise oil palm as a plantation crop, prohibiting large-scale cultivation by individual companies that would make economic sense. One of the reasons for limiting palm coverage is the fear that corporations would take over large tracts of land at the cost of other crops, the government sources said.
As a result, the only option for any firms that want to develop palm is to do so via contract farmers, Mehta said. But one of the government sources said New Delhi had not yet considered altering the land-holding limit, with any change in law needing parliamentary approval.
“This fund will only be used to support farmers who will practically have no income until their plants are ready to give them returns,” he said.
Source:thehimalayantimes.com
Machine hire charges and sundry receipts aren't deductible under sec. 80-IA
IT : Since interest income earned from employees, machines hire charges, rent receipts and sundry receipts could not be characterised income derived from eligible undertaking, deduction claimed by assessee under section 80-IA would not be allowed
Pharmexcil To Hold 11Th Agm From Sept 22-24 In Hyderabad
The Pharmaceuticals Export Promotion Council of India (Pharmexcil) will hold its 11th annual general meeting (AGM) from September 22-24, 2015 at Hotel Trident in Hitech City in Hyderabad.
As part of this annual meet, the Council is planning to conduct 3 important events which include global pharma business meet, technical seminars and pharma CEOs conclave. According to Dr. P.V. Appaji, director general of Pharmexcil, as usual this year’s annual event is going to become a big platform for the Indian pharma fraternity to meet. “During the 11th annual meet we are inviting about 80 overseas buyers from important markets across the globe. The Indian players, particularly the SMEs can make this event an opportunity to meet pharmaceutical manufacturers and entrepreneurs to promote their products,” informed Appaji.
As the 11th AGM is going to witness finished formulations manufacturers, the Indian API exporters can use this platform to promote their APIs, pharma machinery and packaging equipments. As majority of Indian firms are also involved in contract manufacturing, they can also use the platform of 11th AGM as an opportunity to meet with global leaders to build up their business by participating in the B2B meetings.
“We are planning to conduct 4 sessions of B2B meetings along with an exhibition. We are also planning to conduct technical and commercial seminars, where the members can take part and share their views and upgrade their knowledge relating to recent regulations, exports and imports and can raise issues of their concern and suggest ideas,” said Appaji.
The technical seminars on pharma will focus on issues like regulatory compliances, clinical research, packaging solutions, PICS and its implications and harmonisation of Indian pharmacopeia in international markets. The seminar will also throw light on recent government schemes and issues relating to financing in pharmaceutical exports. Speakers are also expected to deliberate on issues concerning service providers for statutory compliance, export opportunities and intellectual property rights during the seminar.
During the CEOs conclave, which is scheduled to be held on September 23, all CEOs and leaders of Indian pharma industry are expected to attend and deliberate on present challenges facing the Indian pharma sector in the country. During the panel discussion, the leaders are expected to deliberate on preparedness of pharma industry to resolve the present issues and tackle the future challenges.
Senior government officials from the departments of commerce, pharmaceuticals, health, DCGI, DBT, DST, DGFT, state and central drug controllers are also expected to attend the 11th AGM event of the Pharmexcil.
Source:pharmabiz.com
India Raises Import Tariff Value On Gold And Silver
The Indian Government today announced hike in import tariff value for gold and silver . The import tariff value of gold was increased by nearly 2.5%, in accordance with prices of precious metals in the international market. Meantime, tariff value on imported silver has been increased marginally by 0.2% for the second fortnight period of the current month.
The Central Board of Excise and Customs (CBEC) issued notification in this regard elevating the gold import tariff value to $363 per 10 grams. The import tariffs are being hiked from the existing $354 per 10 grams. Meanwhile the import tariff value of Silver has been increased slightly from $498 per kilogram to $499 per kilogram.
The government move to lower the import tariff value is in primarily on account of rebounding gold prices in the global and domestic markets. The strong cues from the market indicate that there is more upside left for gold prices.
Meanwhile, gold prices edged higher on London spot market session today, on the back of rising safe-haven demand amidst risks surrounding currency devaluation by Chinese authorities. Spot gold traded at $1,178.78 per Oz in morning trade in Europe. Meantime, a few brokerages and analysts have come out with reports that predict mildly elevated prices for gold in the near-term. HSBC foresses 10% surge in gold prices towards the end of the current year. Analyst at Phillip Capital too expects gold prices to remain calmly bullish going forward.
The gold in India edged higher by Rs 20 per 10 grams to Rs 26,220 per 10 grams on rising demand from retail buyers and jewellers top meet seasonal demand. Silver too witnessed marginal rise on increasing demand. The prices gained Rs 270 per kg to touch Rs 36,400 per kg.
Tariff value is the base price on which the customs duty on imported gold or silver is calculated and it further helps prevent under-invoicing.
Source:metal.com
Delhi High Court asks dept. to respond to challenge made against amended provisions of Service Tax A
Service Tax : Delhi High Court issued notice in matter of writ petition challenging validation of service tax audit vide section 94(2)(k), rule 5A(2) of Service Tax rules, 1994 and Circular, dated 10-12-2014
Here's Why The Rupee May Not Tumble Much Further Against The Dollar
The rupee tumbled to over two-year lows on Monday, continuing a weak trend that started after China devalued its currency last week. The world's second largest economy devalued its currency by over 5% in three tranches, in a bid to make its exports more competitive in the global market.
On Monday, the rupee had weakened to 65.21 against the dollar, a two-year low, breaching the September 2013-level it had touched against the dollar in the earlier trading session. Excess dollar demand from exporters is also keeping the rupee pressurized.
The rupee, however, has shed less gains to the dollar compared to other emerging market currencies, since the Chinese devaluation.
While the rupee may be shedding gains against the greenback, it's not a cause for alarm, Dr Arun Singh, Senior Economist at Dun & Bradstreet India said.
“The Indian economy and rupee today, are more resilient to international factors than they were during the last crisis,” he said.
In 2013, the Indian currency had weakened from 54 to nearly 69-70 to a dollar, a tumble that had to be contained by intervention from the government and the Reserve Bank of India (RBI). There is weakness in the rupee, but it is resilient, which is a good sign, Dr Singh said. There are multiple factors keeping the rupee low against the safe-haven dollar right now.
There's China's devaluation. China's economy has been slowing, and the Yuan has been devaluated to jump start it. Worries about an unrest in Ukraine; concerns in Greece are easing, but a consensus on the bailout plan still evades; and expectations of an interest rate hike from the US – a first in nearly a decade, are all keeping the rupee weak.
Dr Arun Singh said that despite the weak trend and numerous international factors pressurising the rupee, he doesn't “expect the rupee to cross 66 (to a dollar) this year”.
“The last 400 days of the new government stable government have improved the sentiment and confidence of investors; FII inflows are strong since. This is despite some concerns in India regarding growth,” Dr Singh said.
The Current Account Deficit (CAD) is down, fiscal deficit is expected to decrease, CPI is down, WPI is in negative territory, and RBI is expected to cut rates going forward, looking at the indicators. All this is increasing inflows into the country, he said.
The US Federal Reserve is expected to cut rates in September. Won't that ensure a sustained weakness in the rupee? Dr Singh said that the US Fed has been talking about an interest rate cut since the last 6-7 months. Indications were first put out in May-June, which was then postponed to September. He says, that a rate cut, however, isn't likely till late-November or December as economic indicators about growth in the US economy, although positive, aren't as strong.
Going ahead, in the mid-term, the rupee will keep international development in focus. Although, Dr Singh says, he doesn't see any significant change. “Unless any dramatic change happens in the US or China”, the rupee won't tumble much further, he said.
Source:dnaindia.com
AO was directed to determine date of conversion of capital asset into stock-in-trade for capital gai
IT : Though capital gains on conversion of capital assets into stock-in-trade, is payable only in year in which assessee ultimately sells such stock-in-trade, yet for purpose of computing capital gains date of conversion would have to be determined
Govt. tweaks Rules relating to reduction of tax credit under Delhi VAT
VAT/INDIAN ACTS & RULES : Delhi Value Added Tax (Amendment) Rules, 2015 – Amendment in Rules 6A, 7, 7A, 16, 45, Form DVAT 01, Form DVAT 04A, Form DVAT 11, Form DVAT 16, Form DVAT 16A and Form DVAT 17
CBDT notifies rules to determine period of stay of crew members of foreign bound ships in India
IT/ILT : Income-Tax (Twelfth Amendment) Rules, 2015 – Insertion of Rule 126
Sale of products while developing special skills in women wasn't commercial activity by trust
IT : Where motive of assessee is not generation of profit but to provide training to needy women in order to equip or train them and make them self-confident and self-reliant and occasional sales or trust's own fund generation was for furthering objects of trust, proviso to section 2(15) would not apply
Transferee-Co. can change its name as per Amalgamation Scheme
CL : Where scheme of amalgamation provided that name of transferee company would be deemed to have been changed to name of transferor company but Regional Director raised an objection that transferee company would follow Procedures and Rules laid down for such change of name, scheme being passed by requisite majority as laid down under section 391 there did not exist any necessity to have a repeated exercise of same in terms of section 21 of Companies Act, 1956 as amended by section 13 of Compan
TRO can’t review an order after lapse of 14 years without pointing out any apparent mistake in that
IT: TRO could not have reviewed an order under rule 87 of Schedule II to Act after lapse of 14 years without in any manner, pointing out how and why did TRO realize that there was a mistake/error in order
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