Introduction of leasehold property as capital in consortium amounts to ‘transfer’ under section 2(47

IT : Where assessee company had entered into consortium agreement and passed bundled of rights to consortium on land and even permitted bank for mortgage on said property, there was a transfer

Norms for appointment of non-official director of a bank aren't applicable for appointment of shareh

Banking Laws: Government criteria for appointment of non-official director would not be made parameters for judging fit and proper status of a candidate who submitted nomination for post of shareholder director

India Steps Up Aluminum Production, Despite Surplus Chinese Imports

Indian aluminum is flying through some turbulence right now as neighbor China tries to push some of its surplus aluminum into India. At the same time, for some Indian manufacturers of the metal, the Chinese imports are no deterrence to capacity expansion.

National Aluminium Company (NALCO) is a case in point. Late last week, its board approved a major capacity expansion plan to set up a one million-metric-ton alumina refinery in the Odisha province for about $860 million. NALCO plans to use bauxite from its captive mine in the same province for this project. Executives there say they anticipate a spurt in demand because of the “Make in India” campaign, hence the move.

NALCO has  a committed client, as well. 50,000 mt of aluminum metal to be supplied to Angul Aluminium Park, a joint venture between NALCO and the Industrial Development Corporation of Odisha.

Elsewhere, Sesa Sterlite, a Vedanta Group company, too, contemplates ramping up its aluminum capacity at its Jharsugda plant, again in Odisha. CEO Tom Albanese went on record saying his company was actively thinking of stepping up aluminum production.

For now, Sesa operates the plant at about 25% of installed capacity. What stands in the way is limited electricity supply and s raw materiadl crunch (bauxite), both of which Sesa claims to be working on.

Another aluminum major, Hindalco, is in the process of adding 720,000 mt of smelting capacity since April 2013, trying to step into the gaps left by plants shuttered in North America, Australia and Europe.

In fact, Indian exports of aluminum have been on the rise for some time now, since local use had gone down because of the economy grinding to a standstill until the election of the new government in May last.

Aluminum from Hindalco’s Mahan unit in Madhya Pradesh province is being shipped to countries such as Japan and South Korea, the US, and some African nations. A surge in demand for aluminum especially by the automobile industry and for use in cans was the driver, benefiting Hindalco and others.

Source:- agmetalminer.com

Excise Levy Makes Synthetic Textile Export Uncompetitive, Promotes Imports

Faced with rising import of synthetic yarn largely from China due to cost competitiveness, Indian textile manufacturers have urged the government to exempt excise duty to nullify the price advantage for Chinese exporters.

While synthetic filament yarn enjoys 12.5% of excise duty in India, cotton yarn has no such levy. Thus, cotton yarn import from China remains uncompetitive in India.

With this 12.5% of duty differential, import of synthetic yarn has increased substantially in the last few years. During the last financial year alone, import of synthetic yarn has shot up by upto 25%.

Staple fibres import into India shot up to $196.86 million between April – February period of 2014-15 as compared to $149.11 million in the financial year 2013-14, data compiled by the apex trade Synthetic & Rayon Textile Export Promotion Council (SRTEPC) showed.

In the last two years, Chinese cost of manufacturing has gone up with increased workers’ wages and financial costs. Rising energy cost has also gone raised cost of manufacturing in China. Consequently, export share has gone down by 10-12%.

So, they have vacated a space of $40-50 billion in global markets. But, the capacity additions made in the last two years has resulted into excess availability of synthetic yarn which is currently being dumped into India.

“Because of the contraction in exports and continuous capacity additions in the last two years, China has huge surplus of filament yarn, synthetic staple fibre and other raw materials and fabric of synthetic textiles. Now, rising import is not only idling our domestic mills but also support huge foreign currency outgo. The only way forward, therefore, is to reduce excise duty on all synthetic textile raw materials and fabric to enable Indian producers to grab the global opportunity vacated by China,” said Anil Rajvanshi, chairman of SRTEPC.

China’s vacated space is gradually being grabbed by Bangladesh and Vietnam as India remains uncompetitive in global markets with 12.5% of excise levy.

Apart from fibres, filament and spun yarns import of worth $825 million, India also imported synthetic fabric worth $780 million in 2014-15.

Filament yarn is weaved directly for synthetic saris, dress materials and shifting etc. and therefore, is an item of mass consumption which is produced by over 35 producers in India in small, medium and large segments.

“Rising import has resulted into about 30% looms closing down in major producing centres like Surat. Thus, the industry needs urgent attention,” said a senior industry official.

It is a mass commodity product and thus, sold at cheaper prices as compared to staple fibre which is mixed with cotton and viscose to produce good quality suiting and shirting etc. Thus, PSF is sold at import parity. In India, out of 4 million tonnes of polyester produced, 3 million tonnes is filament yarn.

Source:- business-standard.com

No Dairy Exports To Russia, For Now

 India may not be able to export dairy products to Russia due to stiff conditions set by the latter, including that interested companies should possess at least 1000 milking animals.

This means that traders and processors of milk derivatives, such as cheese, will not be able to access Russian markets; exports of such products were allowed earlier this year.

"No exports to Russia, for now as the Russian authority has put in stiff conditions. Among others, the interested exporters should have at least 1000 milking animals," said R S Sodhi, managing director of Gujarat Co-operative Milk Marketing Federation Ltd which sells Amul brand milk and its derivatives.

In fact, Amul had already initiated dialogues with a handful of Russian buyers for export of milk derivatives but those were derailed because of impossible conditions.

Russia allowed access to its markets for Indian dairy exporters in January this year after the country's Prime Minister Vladimir Putin visited India and announced firming of trade ties between the two countries.
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Following this, Amul initiated talks with about half a dozen Russian dairy importers. Other exporters had also showed interest in Russian markets.

India is the world leader in milk production.

Most dairy producers in India operate under a co-operative model in which animals are owned by farmers and co-operative factories only process the procured milk. Under the existing Russian framework, therefore, such co-operatives do not fit the bill as they do not directly own the milch animals.

Farmers' co-operatives, however, have approached the government for a favourable revision in Russian framework.

An official from Schreiber Dynamix Dairies Ltd which sales dairy products under "Dynamix" brands, said, "As far as I know, there has been no export of dairy products to Russia."

Source:- business-standard.com

Steel Imports Surge 58% In May; Consumption Up 6.8%

India's steel imports surged 58 per cent in May to about a million tonne, indicating tough times are here to stay for domestic producers facing price pressures and cheap imports from countries like China and Korea.

On the other hand, what appears to be a silver lining for the industry, steel consumption grew 6.8 per cent year-on-year to 7.23 million tonnes (MT) last month.

In May 2015, steel imports stood at 0.91 MT, a rise of 58 per cent, compared to April 2015 when they rose by 20.4 per cent, as per data by the Joint Plant Committee (JPC), under the Steel Ministry.

For the first two months of the 2015-16 fiscal, India was a net importer of steel with in-bound shipments growing by 54.5 per cent to 1.67 MT, compared to April-May of 2014-15.

Similarly, imports grew 71 per cent to 9.32 MT in 2014-15 as compared to 2013-14, making India a net importer of steel.
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According to rating agency Moody's, steel imports are not expected to come down in the current fiscal ending March 2016.

Last week, India slapped anti-dumping duty on imports of certain steel products from three countries, including China, to protect domestic producers, a development that is expected to help contain the rising imports of the metal.

An investigation by Directorate General of Anti-Dumping Duty (DGAD) concluded that domestic industry suffered material injury, both by the volume and price effect.

Another positive development is rising steel consumption, which has been registering a gradual increase and is expected to help shore up the top and bottom line of domestic firms.

India's consumption of total finished steel rose by 6.8 per cent to 7.234 MT in May, 2015 against the year-ago period. It was up 31.3 per cent against April, 2015, JPC data showed.

Steel consumption saw a growth of 7 per cent in April-May 2015-16 at 12.742 MT over same period of last year, it added.

Similarly, consumption grew 3.1 per cent in 2014-15 at 76.36 MT over the same period of 2013-14.

According to industry body World Steel Association, steel consumption in India is expected to grow by 6.2 per cent to 80 MT in 2015 from 75.3 MT in 2014.

Similarly, Moody's expects consumption to rise on the back of an projected rise in sales of consumer vehicles.

Besides, declining prices of iron ore and cooking coal as well as the government's decision to resume mining will aid in reducing pressure on the companies, the agency added.

Source:- business-standard.com

SARFAESI Act doesn't permit secured creditor to publish photo of defaulter in newspapers/ magazines:

SARFAESI: A secured creditor, who has initiated action for enforcement of its security interest in terms of provisions of SARFAESI Act is not entitled to publish photograph(s) of defaulting borrower(s)/guarantor(s) in newspapers/magazines etc.

HC stays recovery against assessee to which sec. 11 relief was denied on act of rehabilitation of sl

IT : Where Assessing Officer held activity of assessee slum rehabilitation authority not charitable in view of newly inserted proviso to section 2(15), but assessee fairly made out a case that its activity would be charitable being its object a general public utility, pending appeal before Commissioner (Appeals), recovery of demand against assessee was to be stayed on deposit of 10 per cent of demand

Unjust enrichment doesn't apply to amount deposited for release of seized goods as such deposit is n

Excise & Customs : Amount deposited for release of seized goods in compliance with interim order passed by High Court, was not towards duty; hence, question of unjust enrichment would not arise at all to refund thereof

Cash salary deposited by assessee in his bank account couldn't be held as unexplained credit

IT: Where assessee had received remuneration partly in cash and partly in cheque and he had already recorded cash deposited in his account as remuneration, it cannot be said that it was unaccounted money of assessee

TP : Working cap adjustment to be made to comparable and not profit of assessee if latter bore no wo

IT/ILT : Segmental information pertaining to a comparable obtained by TPO should be provided to assessee for its objections and then he has to re-consider whether said company is comparable or not

Housekeeping and gardening services availed to maintain factory in eco-friendly manner are eligible

Cenvat Credit : Housekeeping, landscaping and gardening services availed by an assessee to maintain their factory premises in an eco-friendly manner, are eligible for credit as 'input services'

Acquisition of software allowed as revenue exp. as it was used as raw material in business of softwa

IT : Where software was purchased by assessee-software exporter to use same as a raw material in manufacturing of software, same to be treated as revenue expenditure

Unjust enrichment doesn't apply to amount deposited for release of seized goods as such deposit was

Excise & Customs : Amount deposited for release of seized goods in compliance with interim order passed by High Court, was not towards duty; hence, question of unjust enrichment would not arise at all to refund thereof

No penalty even when seller didn't completely fill up declaration form as purchaser filled his part

CST & VAT : Rajasthan VAT - Where Form No. 18A accompanied with goods under transport was incomplete only to extent that seller did not fill up columns though purchaser had duly sent filled in Form on his part, imposition of penalty on plea that Form No. 18A was not filled in properly was not justified

Sum incurred towards a project which couldn't be materialized is allowable as revenue expenditure

IT : Where new project did not materialized, expenses incurred towards such project was revenue expenditure

Higher Cotton Stocks Will Put India In Comfortable Position

Cotton inventory, estimated at around 70 lakh bales at the close of 2014-15 season is expected to be the highest ever cotton stock carried by India after 2008-09.

This huge volume of carry forward cotton stock would place the country in a comfortable position, the Chairman of The southern India Mills’ Association T Rajkumar said.

He said the predominantly cotton-based textile industry in the country was subjected to crisis due to volatility in the price of the white fibre.

“There was some respite during the current season as the prices had remained comparatively stable due to reduced imports by China and the over supply in the global market,” Rajkumar added.

As international prices were ruling lower than Indian prices, CCI (Cotton Corporation of India) had to venture into MSP operations; CCI procured around 87 lakh bales during 2014-15 season. But their selling policy affected the domestic market as also the mills that used certain varieties of cotton (grown in Telangana and Andhra Pradesh) as the cotton was not released on time.

The global area under cotton is expected to drop by 7 per cent to 31.3 million hectares in 2015-16 and the production by 9 per cent to 23.9 million tonnes.

Yet, the supply position in 2015-16, industry sources say, “is expected to be comfortable as China would continue to reduce imports and downsize its reserves.”

“The cotton spinning mills, which hitherto carried 3-6 months’ cotton stock to tide over price volatility, can now reduce the inventory to 1-2 months and the mill sector can leverage the current situation by strengthening on the export front, particularly in the garments and made-up segments,” the SIMA Chief said.

He further pointed out that the CCI could sell only 12 lakh bales against 25 lakh bales offered during the last couple of months as the Corporation’s rates were high.

“By not offloading the fibre procured from Telangana and Andhra Pradesh till end-April, the Corporation gave mills a tough time, resulting in flaring up of prices.”

The industry has been pleading with the Centre to restructure the Cotton Advisory Board (CAB) by inducting industry stakeholders for better adoption of strategies and policies, Rajkumar said.

Reverting to CAB’s export estimate of 70 lakh bales during the current season, the SIMA Chief said “only around 45 lakh bales have been exported so far. It may not exceed 55 lakh bales this season as China has stopped imports.”

Voicing concern over purported rumours of Government attempting a G2G (Government to Government) arrangement to export definite cotton volumes to countries such as Thailand, China, Bangladesh, Pakistan and Vietnam, the SIMA Chief appealed to the Centre to desist from such a policy and leave the cotton market without any government interference.

Source:thehindubusinessline.com

Rupee Weakens Past 64 Per Dollar

The Indian rupee on Monday weakened past 64 against the dollar after local equity markets fell over 1,000 points in the last four days. The local unit opened at 64.04 per dollar. At 9.10am, the home currency was trading at 64.02, down 0.43% from its previous close of 63.76. The Sensex rose 0.24% or 59 points to 26,833.66 points.

 

Investors were also cautious due to the uncertainty over Greece’s debt obligations and strong US labour market report which added 280,000 jobs in May, the largest gain since December, indicating that the US economy is returning to growth after contracting in the first three months of this year, Reuters reported.

 

The local markets fell on fears of drought after the India Meteorological Department cut its monsoon forecast to 88% from 93% earlier. Also, the US jobs report reinforced expectations that the Federal Reserve could raise interest rates in 2015.

The yield on India’s 10-year benchmark bond was trading at 7.813% compared with its Friday’s close of 7.789%. Bond yields and prices move in opposite directions.

 

On Friday, the US 10-year yield rose 10 basis points to close at 2.4004% from its previous close of 2.3070. A basis point is a hundredth of a percentage point.

 

Since the beginning of this year, the rupee has lost 1.65%, while foreign institutional investors have bought $7.04 billion from local equity and $5.79 billion from bond markets.

 

Most of the Asian currencies were trading lower. Malaysian ringgit was down 1.18%, South Korean won was down 0.86%, Indonesian rupiah was down 0.55%, Philippines peso was down 0.53%, Taiwan dollar was down 0.38% and Singapore dollar was down 0.18%. However, Japanese yen was up 0.15%.

 

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.451, up 0.15% from its previous close of 96.306.

 

Source:livemint.com

No deemed dividend arise when loan is given by beneficial owner of shares to its assessee Co.

IT: Where recipient of loan, namely, assessee was not a shareholder of company giving such loan, section 2(22)(e) would not apply

DDA abused its dominant position by imposing unfair provisions in its housing scheme, says CCI

Competition Act: DDA is dominant in relevant market of provision of service for sale and distribution of flats in territory of Delhi and it had made unfair provisions in its Housing Scheme, 2010