IT: Where assessee, matrimonial agent, made payments to newspapers for publication of matrimonial advertisements on behalf of its clients, since there was no contractual relationship between assessee and publishers, section 194C did not apply to said payments and, accordingly, disallowance could not be made under section 40(a)(ia)
Tuesday, 25 August 2015
DRP couldn't pass brief and cryptic order without considering objections of assessee to draft assess
IT/ILT : Where DRP had not properly considered and adjudicated objections of assessee to draft assessment order and passed a brief and cryptic order, said order being in violation of principles of natural justice, was to be set aside
Exemption available on intermediate product even if by-product arising in course of manufacture is a
Excise & Customs : 'Tobacco refuse' arising in course of manufacture of cigarettes from intermediate goods 'cut tobacco', is not a 'final product'; hence, even if tobacco refuse is exempt, exemption to intermediate goods 'cut tobacco' used in 'exempted tobacco refuse' cannot be denied
HC directs co. to pay gratuity to director as agreed under consent terms filed before CLB
CL : Where under consent terms filed before CLB, it was agreed and confirmed that gratuity would be paid to respondent-director by appellant-company, CLB was entitled to reject claim of appellant-company that respondent was not entitled to payment of gratuity under Payment of Gratuity Act
TDS default doesn't invite sec. 40(a)(ia) disallowance if total income of deductor is exempt
IT : Where assessee's total income is exempt under section 10(26), for assessee's lapse of not complying with his tax withholding obligations, there cannot be any occasion to invoke section 40(a)(ia) to treat relevant amount disallowable as an income of assessee on standalone basis
M.S. Plates, Angles and Channels used in construction of plant are eligible for credit as capital go
Cenvat Credit : Outdoor catering services for employees and outward transportation of final product amount to 'input services' and are eligible for Cenvat Credit
India To Auction 20 Major Iron Ore Mines To Revive Industry
India will auction about 20 major iron ore mines this year in its first such sale ever, a top government official said, as it looks to revive its corruption-tainted mining industry.
India's mining sector has been mired in controversy over illegal allocation of resources. Once the world's third-biggest iron ore exporter, the country now imports the steelmaking ingredient due to a court-led crackdown on illegal mining.
The government hopes auctions will help curb wrongdoing. While it is unlikely to lead to an immediate boost in iron ore output at a time when there is a global glut, mine sales will bring India closer to its target of tripling its steel capacity to 300 million tonnes by 2025 and relying less on ore imports.
"Most of the states are in the midst of carrying out their pre-auction activities and hopefully by the end of October and November onwards they will start (auctions)," Mines Secretary Balvinder Kumar told Reuters in an interview on Monday evening.
He expects about 80 mines to be auctioned in the first phase, including limestone, gold and "about 20 iron ore mines". States are estimating reserves, Kumar added.
India produced 136 million tonnes of iron ore last fiscal year ended March 31. About 1.5 million tonnes of ore are needed to make 1 tonne of steel, implying India's ore output will have to more than triple in 10 years if steel companies are to be self sufficient.
Most of the iron ore mines being sold are in the southern state of Karnataka, known for its high-quality ore. This will greatly benefit local steelmakers like JSW Steel . Led by JSW's purchases, India's ore imports hit a record of over 15 million tonnes last fiscal year as global prices collapsed. Kumar expects prices to improve by the time the mines start.
"The mining process takes two to three years because they will need all kinds of clearances: forest, environment, from pollution control board. (It) takes a lot of time to comply."
Source:moneycontrol.com
Crude Crash Impacts India’S Efforts To Boost Self-Sufficiency: Report
Crashing oil prices will hit India’s energy security efforts, and impact Indian Prime Minister Narendra Modi’s roadmap for the country to reduce dependence on oil imports by 10 percent in the next few years, local newspaper Economic Times reported Monday, citing industry executives and analysts.
India, which imports 80 percent of its daily oil needs, should make such a reduction by 2022, Modi said in March.
A barrel of Brent crude oil, a benchmark for oil prices around the world, closed below $40 on Monday for the first time since early 2009. Stock markets around the world plummeted on the day, triggered by a rout in China. Investors remain nervous about the slowdown in the world’s largest consumer of raw materials.
Oil companies in India, especially private ones, are hesitant to invest money in new projects, thwarted by cheaper imports, the paper reported, citing an unnamed industry executive.
In March, Cairn India Ltd. slashed capital expenditure for the fiscal year 2015-16 by 60 percent. Falling oil prices made it unviable to invest in additional capacity, the company, which accounts for a quarter of India’s oil production, said at the time.
India’s consumption of petroleum products rose 6 percent in the April to July period versus the year earlier, but as imports become cheaper, a simultaneous cut in local production hurts the country’s energy security, the newspaper reported.
In that period, local production was little changed at 12.4 million metric tons (mmt) from 12.5 mmt a year earlier. Imports of crude, however, rose 6 percent to 66.3 mmt and petroleum products import jumped 40 percent to 9.2 mmt. India's own share of petroleum products consumed fell to 20.1 percent from 21.3 percent.
Consumption could potentially be higher had the government passed on the entire benefit of lower oil prices. “Given that the government is unwilling to pass on the entire benefit of low crude prices in terms of ensuring lower retail prices of petrol and diesel, the impact will be somewhat muted,” Kunal Kundu, vice president and chief economist in India at Societe Generale, said in an Aug. 13 report. Kundu was referring to the effect of lower prices on deflation in the economy.
While state-owned companies such as Oil and Natural Gas Corporation Ltd. have continued to invest in some new projects, under pressure from the federal government, it won’t be enough to meet the 10 percent reduction in dependence on oil imports, the paper reported.
Source:ibtimes.com
Cultivation of agricultural land by assessee himself isn't necessary to claim sec. 54B relief
IT : Once it is established that land owned by assessee has been used for agricultural purpose, he becomes entitled for claim under section 54B on sale of land even if he is not a cultivator himself but gets it cultivated under his supervision
Imported Onions Arrive, Prices Continue To Soar
Though imported onions have started trickling into the markets of the country, prices are showing no signs of declining and have skyrocketed to Rs 60 a kg in several cities. Trade estimates say that by the end of August, around 50 containers of onion from Egypt are expected to reach the Mumbai port, while 18 trucks of onion from Afghanistan have reached Azadpur market in Delhi.
On Saturday, average price of onion at Lasalgaon wholesale market had risen to a two-year high of Rs 5,700 per quintal. Retail prices of onion across major cities crossed Rs 60 per kg. Escalation of onion prices, especially before elections in Bihar, has been a cause of worry and the government had increased Minimum Export Price (MEP) to $700 per tonne.
As prices rose, there was a steep decline in arrival of the produce at Lasalgaon market. On Saturday, only 2,000 quintal of onion reached against 12,000 quintal a year back. The state government is also on guard against any hoarding of onions by traders and merchants. MoS for marketing, Ram Shinde had also spoken about a special squad to check hoarding but no such team has been deployed.
Last week, the district supply office (DSO) of Nashik surveyed traders in the district. Officers attached with the search said it was carried out on the orders of the central government to learn about the quantity of onion stock available. Premises of over 375 traders were inspected and the district was found to have 1.5 lakh quintal of onion. Officers associated with the survey said they have not come across incidents of hoarding, as of now.
Nanasaheb Patil, chairman of the Lasalgaon Market Committee said traders have confirmed about the imports but are not divulging details. Patil said most of the onion import would be from Egypt.
Officers associated with Nashik-based National Horticulture Research and Development Foundation (NHRDF), on the condition of anonymity, said hoarding might have something to do with the price rise. “The landing cost of onions from Egypt in India is around Rs 30-35 per kg. Many traders in Mumbai are importing the produce from Eqypt. Traders in Delhi are importing onions from Afghanistan via Pakistan,” said an officer.
An internal survey of NHRDF put the stored stock of onion at around 13 lakh quintal in the beginning of August. Patil said that on August 27, tenders floated by the government to procure onion will be opened. The government, through MMTC, floated the tenders to procure 10,000 quintal of onions after a similar bid by NAFED did not evoke any response.
Source:indianexpress.com
Rupee Rebounds; Rbi Intervention Seen
The Indian rupee on Tuesday afternoon strengthened sharply following cues from other Asian currencies, but the Reserve Bank of India had to intervene too, say currency dealers.
At 4.07 pm, the home currency was trading at 65.93 a dollar, after strengthening as much as 65.92 a dollar in the intraday. The intraday gain of 0.9% was rupee’s steepest gain since 18 November, 2013.
Rupee had opened at 66.50a dollar, from its previous close of 66.65 a dollar. The rupee had touched a low of 66.77 a dollar, prompting the Reserve Bank of India to intervene.
“RBI pulled rupee to 66.70 level and the market got the message. Rupee strengthened rapidly after that,” said a senior currency dealer with a foreign bank who did not wish to be named.
Meanwhile, Bloomberg news agency reported that RBI may have asked the oil marketing companies not to buy dollars directly from the market, which may have an impact on the sentiment and strengthened rupee, said the dealer.
China’s central bank cut its benchmark lending rate for the fifth time since November and lowered the amount of cash banks must set aside, stepping up efforts to cushion a stock market rout and deepening economic slowdown.
The one-year lending rate will drop by 25 basis points to 4.6% effective Wednesday, the Beijing-based People’s Bank of China said on its website Tuesday. The one-year deposit rate will fall by 25 basis points to 1.75%, Bloomberg report said.
Most of the Asian currencies were trading higher. Malaysian ringgit was up 1.1%, Singapore dollar 1%, Taiwan dollar 0.9%, Philippines peso 0.5%, Thai baht 0.4%, China Offshore spot 0.4%, South Korean won 0.28%. However, Japanese yen was down 1.1% and China Renminbi 0.14%.
Asian markets closed down. Hong Kong’s Hang Seng was up 0.7%, China’s Shanghai Composite 7.6% down and Japan’s Nikkei Stock Average was down 4%. The benchmark Sensex index rose 0.82% or 210.91 points to 25,952.47 points.
The yield on India’s 10-year benchmark bond was trading at 7.836% compared with its Monday’s close of 7.891%. It opened 7.895% and touched a high of 7.911% -- level last seen on 29 June. Bond yields and prices move in opposite directions.
So far in August, the rupee has fallen over 2.5%. It has been the worst month for the currency in at least two years. Since the beginning of this year, the rupee has lost 4.5%, while foreign institutional investors have bought $6.46 billion from local equity and $6.33 billion from bond markets.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.567, up 0.25% from its previous close of 93.332.
Source:livemint.com
Diamond Exports Down 18% In July
Reflecting a serious slowdown in the global trade for diamonds, India's polished diamond exports were to an all time low at 18.34 per cent and rough diamond imports were down at 42.9 per cent in July 2015 when compared to the corresponding period previous year.
This was revealed in the latest data released by the Gems and Jewellery Export Promotion Council (GJEPC) on Monday.
Exports of cut and polished diamonds in July 2015 were $1.51 billion down 18.34% from to $1.85 billion in July 2014. In volume terms, the decline was 14.40%, with the centre exporting 2.80 million carats in July this year as against 3.26 million carats a year earlier.
Similarly, imports of rough diamonds in July fell by 42.9% to $1 billion against US$ 2 billion last year. In volume terms, 9.36 million carats of rough were imported during July, a decline of 40% compared with the imports of 15.59 million carats in July 2014.
Export of gold jewellery (plain and studded) was also down during the same period, falling by 14.67% from $613.44 million last year to $523.42 million in July. However, exports of gold coins and medallions shot up sizably from $84.95 million last year to $426.85 million in July this year.
On a cumulative basis between April - July 2015, cut and polished diamond exports were down 10.19% to US$ 6.75 billion and rough imports were down 25.8% to US$ 5.2 billion.
Dinesh Navadia, regional chairman, GJEPC said, "The markets in China, US, UK, Middle East are very weak and the demand is not picking up. On the other hand, there is no question of buying rough diamonds due to the skyrocketing prices and the polished diamonds prices reducing. Most of the clients of big mining companies like De Beers and Alrosa have been rejecting more than 80 per cent of the goods this time."
Source:timesofindia.indiatimes.com
Input tax credit can be used to pay output tax of any division of assessee having common TIN for all
CST & VAT: Andhra Pradesh VAT - There is no statutory provision in VAT Act restricting input tax credit only to output tax payable in a particular division
TP addition should be considered only on international transactions with AE and not on entire turnov
IT/ILT: ALP can only be considered on value of international transactions alone and not on entire turnover of assessee
Salaries paid by lessee couldn't be charged to ST by treating them as supply of manpower by owner of
Service Tax : Payment of salaries/wages to employees/workers of factory taken on lease by lessee, cannot be charged to service tax under 'manpower supply services' in hands of owner of factory
Exercise of ESOPs shall not be deemed as trading under insider trading norms; SEBI clarifies
SEBI : Guidance Note on SEBI (Prohibition of Insider Trading) Regulations, 2015
Free-home delivery of food isn't liable to service-tax
SERVICE TAX : Clarification on Levy of Service Tax on Food Sold by Way of Pick-up or Home Deliveries
Recovery proceedings can't be initiated without passing assessment order and issue of demand notice
IT : Where no assessment order was passed against an assessee nor any notice of demand under section 156 was issued, recovery proceedings could not be initiated against it
Payment of tax at lower rate under bona fide belief doesn't attract penalty
CST & VAT: Rajasthan VAT - Where assessee under a bona fide belief had paid tax at rate of 4 per cent on branded confectionery and Assessing Authority taking view that confectionery was taxable at rate of 12.5 per cent held that assessee was liable to pay differential tax of 8.5 per cent and also levied penalty upon it under section 61, levy of penalty was not justified
SEBI Board nods to draft amendment making way for merger of FMC with SEBI; relaxes ESOPs norms
SEBI : SEBI Board Meeting – FMC – SEBI Merger; Anchor Investors in Public Issues; Amendments in SEBI (Share Based Employee Benefits) Regulations, 2014 etc.
Govt. grants tax exemption to 'Press Trust of India' for three assessment years
IT : Section 10(22B) of The Income-Tax Act, 1961 – Exemptions – News Agency – Notified News Agency
Money held by Bishop of Church in his fiduciary Capacity couldn't be held as unexplained
IT : Where assessee was bishop/metropolitan of a church and money deposited in bank account of assessee did not belong to him in his individual capacity and he was holding account in his fiduciary capacity, said money had to be considered only in hands of church and there could not be any addition in hands of assessee under section 69
Additional CIT and Joint CIT shall perform functions of AO under the Black Money Act
IT/ILT : Section 120 of the Income-Tax Act, 1961, read with Section 6 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 – Income-Tax Authorities – Jurisdiction of
HC can't entertain revenue's appeal against an order which is already pending in Supreme Court
Excise & Customs : Where appeal against a part of order of Tribunal has been entertained by Supreme Court, there is no question of High Court entertaining appeal of revenue irrespective of grounds of appeal; revenue should also approach Supreme Court
Referral fee paid to AE on property transaction allowed as assessee had furnished evidence to justif
IT : Where Tribunal recorded factual finding that assessee had paid referral fee to its AEs with respect to revenue earned by assessee on property transaction referred to it by its AE, such expenditure was to be allowed under section 37(1)
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