"January, 2011" Archive

Recognition of permanent diminution in value of investments in banks’ subsidiaries/joint ventures

RBI/2010-11/395, DBOD. No. BP.BC.79/21.04.141/2010-11 (31/01/2011)

DBOD. No. BP.BC.79/21.04.141/2010-11 In terms of para 15 of Annexure to circular DBOD.No.BP.BC.32/21.04.048/2000-2001 dated October 16, 2000 on ‘Guidelines for Classification and Valuation of investments by Banks’, banks are required to recognise any diminution, other than temporary, in the value of their investments in subsidiaries/ ...

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Regarding Import of inputs under Advance Authorisation (AA) and Duty Free Import Authorisation (DFIA) issued SIONs E-1 & E-5

Pocliy Circular No.13 (31/01/2011)

Therefore, (i) import of Tapioca Starch and Wheat Gluten as alternative inputs against import item No. 1 of SION E-5 and, (ii) import of Lactose / Fructose / Maltose / Mannitol / Sodium Saccharin / Artificial Sweetening Agents, as alternative inputs against import items No. 2 of SION E-5 and import item No. 1(a) of SION E-1, is not to be ...

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Operators may miss unsolicited calls deadline

Mobile subscribers looking for respite from unsolicited calls may have to wait for some more time as operators are facing technical difficulties in implementing system mandated by TRAI to check pesky calls. With telemarketers mandated to use '700' se...

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Posted Under: Fema / RBI |

Black money – FinMin panel on voluntary compliance

(31/01/2011)

Amid the growing clamour to crack down on generation of black money, the Finance Ministry has instituted a study group to improve "voluntary compliance" by suggesting appropriate measures to motivate tax evaders to disclose their unaccounted funds. T...

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Posted Under: Fema / RBI |

India not to rush into allowing FDI in retail – Official

In a clear message to global retail giants like Walmart, Tesco and Carrfoure, the Indian government today said it will not rush into allowing FDI into politically sensitive multi-brand retail sector. "Until a decision is formally taken to allow fore...

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Posted Under: Fema / RBI |

CBI files case against Biotor Industries for fraud

The CBI has registered a case of cheating and fraud against directors of Biotor Industries, manufacturer of castor oil, for allegedly submitting forged documents to three banks and availing a loan of Rs1500 crore. The Banking and Securities Cell of C...

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Posted Under: Fema / RBI |

VAT Cir – 3T of 2011 – Extention of Due date for Filing Form 704 for FY 2009-10

Trade Circular No. 3 T of 2011 (31/01/2011)

The representations from various Trade and Association have been received with a request to extend the due date for submission of Audit Report in Form-704. The issue has been examined. Accordingly, it has been decided to extend the due date for submission of the Audit Report in Form 704 for the period 2009-10 from 31st January 2011 to 15t...

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Notification No. 7/2011 – Customs (N. T.) Specify tariff on Crude/CBD Palm Oil/Palmolein, Poppy seeds, Brass Scrap etc

Notification No. 07/2011-Customs (N.T.) (31/01/2011)

In exercise of the powers conferred by sub-section (2) of section 14 of the Customs Act, 1962 (52 of 1962), the Board, being satisfied that it is necessary and expedient so to do, hereby makes the following further ...

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Maharastra Profession Tax – Mandatory e-return for PTRC Monthly filers

Notification No. PFT-1011/CR11/Taxation-3 (31/01/2011)

Maharastra Profession Tax - Mandatory e-return for PTRC Monthly filers Notification No - PFT-1011/CR11/Taxation-3 Mandatory e-return for PTRC Monthly filers ...

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Government of India issues revised guidelines on Conference Visa

The Indian immigration laws provide for grant of a special type of visa known as ‘conference visa’ to foreign nationals who intend to visit India for attending a conference, seminar or workshop. The Ministry of Home Affairs (‘MHA’), Government of In...

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Posted Under: Fema / RBI |

Outsourced clinical trial expenditure is not eligible for weighted Research and Development deduction

Concept Pharmaceuticals Ltd. Vs. ACIT (ITAT Mumbai)

The Tribunal has interpreted the wordings of Section 35(2AB) and concluded that the Section only allows weighted deduction in respect of in-house Research and Development facility. Any expenditure incurred outside the Research and Development facilit...

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Software industry – will the new notifications reignite the controversy?

Recently, the government issued fresh set of notifications rescinding the earlier ones which granted exemption from payment of Service tax on canned / packaged software if Excise duty / Customs duty (CVD) was paid. Similar set of exemption notificati...

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Posted Under: Fema / RBI |

Withholding tax not required on payment to non-resident agents of artists in absence of a permanent establishment

In a recent ruling, the Mumbai Income-tax Appellate Tribunal (the Tribunal), in the case of Wizcraft International Entertainment Pvt. Ltd. (the assessee) held that commission paid by an entertainment event management firm in India to a UK based ...

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Posted Under: Fema / RBI |

Setting-off of sundry debtors against sundry creditors and applicability of TDS on payment for use of computer system to

Menlo Worldwide Forwarding India Pvt. Ltd. Vs. DCIT (ITAT Delhi)

In a recent decision, in the case Menlo Worldwide Forwarding India Pvt. Ltd. v. DCIT [2010-T11-164-ITAT-DEL-INTL](the "assessee"), the Delhi Income-tax Appellate Tribunal (the "Tribunal") held that the recording the setting-off of sundry debtors agai...

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Prepayment of sales tax deferral loan on payment of net present value of future liability cannot be classified as remission

Sulzer India Ltd. Vs. Jt. CIT (ITAT Mumbai)

In a recent ruling, in the case of Sulzer India Ltd. v. Jt. CIT [2010-TIOL-670-ITAT-MUM-SB] , the Special Bench of the Mumbai Income-tax Appellate Tribunal (the "Tribunal") held that prepayment of deferred sales tax liability on the Net Present Value...

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Applicability of Limitation on deduction of expenses u/s. 44D on consideration other then Fees for Technical Services

Rolls Royce Industrial Power Ltd. Vs. ACIT (ITAT Delhi)

Limitation on deduction of expenses under Section 44D of the Act cannot be invoked if the consideration received by the foreign company is not Fees for Technical Services as defined in India-USA tax treaty ...

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ICAI to submit report on accounting frauds

The Institute of Chartered Accountants of India (ICAI) will submit its report against unethical practices by big four auditing and consulting firms — Ernst & Young, KPMG, Price Waterhouse Coopers and Deloitte Sells and Heskins — to the Ministry of Co...

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Posted Under: Fema / RBI |

UK Minister has 'serious concerns' over Big Four's audit dominance

THE GOVERNMENT'S employment minister has 'serious concerns' over a lack of competition in the audit market, and has urged company audit committees and shareholders to encourage companies to use accountants outside the Big Four firms to improve choice in audit services. Ed Davey, who is also minister for consumer and postal affairs, yester...

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Posted Under: Fema / RBI |

Right of nominee to exclusion of others

Harsha Nitin Kokate Vs. The Saraswat Co-op. Bank Ltd. & Ors. (Bombay High Court)

Mr. X. held certain shares in dematerialized account with a depository. Mr. X executed nomination in the prescribed form following the prescribed procedures in favor of his nephew (Mr Y). Upon the demise Mr. X, wife of Mr. X (say Mrs. X) filed a suit claiming an interest in those shares as a legal heir and representative. The Bombay Hi...

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Order of Court approving amalgamation is a “conveyance” and an “instrument” on which stamp duty is payable

Delhi Towers Ltd. Vs. G.N.C.T. of Delhi (Delhi High Court)

The Delhi High Court has inter alia held in the case of Delhi Towers Ltd. V. G.N.C.T. of Delhi [2010] 159 Comp Cas 129 (Del) that an order passed by the Court in terms of the provisions of Section 391 read with Section 394 of the Companies Act 1956 approving a scheme of amalgamation of companies is “conveyance” under Section 2(10) of ...

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Contract for sale of moveable property amounts to conveyance and is subject to stamp duty

State of Uttaranchal (now known as State of Uttarakhand) & Ors. vs. Ms. Khurana Brothers. (Supreme Court of India)

The Supreme Court in view of the facts of the matter analyzed the Sale of Goods Act, 1930 [SGA] and ISA and held that, the true and real meaning of a document needs to be ascertained to answer whether a contract for sale of movable property amounts to conveyance, and if yes, whether stamp duty is chargeable. The Supreme Court held that...

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Analysis of Amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 [ICDR Regulation]

Definition of ‘Qualified institutional buyer’ and ‘Retail individual investor’ • Insurance funds set up and managed by the Department of Posts, India have been given the status of Qualified Institutional Buyers [QIBs]. Accordingly, Postal Li...

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Posted Under: Fema / RBI | ,

Regulatory Framework Governing Core Investment Companies Issued by RBI- An Analysis

A Non-Banking Financial Company (‘NBFC’) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by Government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, ...

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Posted Under: Fema / RBI |

Goodwill paid for commercial rights in the form of knowhow, technical information, etc. are eligible for depreciation

Commissioner Of Income Tax - IV Vs Hindustan Coca Cola Beverages Pvt. Ltd. (Delhi High Court)

Though the High Court was dealing with a contention that the depreciation on goodwill could be a possible view and agreed with that view, the decision highlights that it may be possible to claim depreciation on goodwill where the facts demonstrate t...

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Outstanding receivables from international transactions held to be within the jurisdiction of TPO

Logix Micro Systems Ltd. Vs. ACIT (ITAT Bangalore)

By considering the potential loss on the long standing receivables as a genuine adjustment in the course of assessment, the Tribunal has reinforced the principles that the concept of TP cannot be that of an exact science and that constant application...

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CCIT Personally Responsible For Timely Filing Of Appeals – CBDT Chairman

As you are aware, the Apex Court of the country has time & again expressed its anguish & annoyance over the delayed filing of SLPs as also appeals in the High Courts. In some cases, such delay is inordinate. The inordinate delay is more pronounced in...

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Posted Under: Fema / RBI |

Income Tax officials to raid Katrina Kaif's bank locker

Bollywood actresses Katrina Kaif and Priyanka will face more troubles as the IT department officials all set to raid their bank lockers. Sources reported that officials will continue investigation on tax recordes of these actresses. Earlier on Monday...

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Posted Under: Fema / RBI |

VAT implications on Intra State Stock Transfer – Life after Delhi High court decision in Havell’s and ITC

Stock transfers to a branch or consignee have been the norms of trade in both pre and post VAT regime. Further, Stock Transfer can be both inter-state and intra-state. · Various businesses contemplate options of selling the goods to another ...

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Posted Under: Fema / RBI |

PayPal follows RBI to restrict e-payment to Indian merchants

Online payment service PayPal on Friday announced changes in its payment to Indian transactions, following the guidelines issued by the Reserve Bank of India on requirements for governing the processing and settlement of export-related receipts facil...

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Posted Under: Fema / RBI |

Banks to impose penalty on premature closure of FDs

Next time you wish to cash in your fixed deposits, be ready to pay a penalty of as much as one per cent of the investment if money is withdrawn before completion of the maturity period. In a bid to discourage premature withdrawal of money from fixed deposit accounts, banks have decided to impose a penalty on such transactions to minimise ...

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Posted Under: Fema / RBI |

ICAI Convocation (II)-2010 for newly enrolled Members

Members who enrolled as Associate members from 01st March, 2010 to 31st August, 2010 would be eligible to receive their membership certificates in person at the Convocation. Members are requested to wear the Royal Blue Colour Blazer /Navy Blue Col...

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Posted Under: Fema / RBI |

Switzerland to share tax information with India- official

Dismissing the perception that Switzerland is a tax haven, a senior Swiss government official today expressed hope that the revised tax avoidance treaty with India will be ratified during the year, following which Swiss authorities would provide administrative assistance to India to deal with cases of tax evasion....

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Posted Under: Fema / RBI |

Reopening U/s. 148 without service of reasons to the assessee before the expiry of period of 6 years renders reopening invalid

Shri Balwant Rai Wadhwa Vs. ITO (ITAT Delhi)

As the issuance of the s. 148 notice and the communication and furnishing of reasons go hand in hand, the reasons have to be supplied to the assessee before the expiry of period of 6 years. If this is not done, the validity of the s. 148 notice cannot be upheld. In any proceeding, whether civil or criminal, a summons issued without a copy...

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Regarding Amendment in para 60 and 72(6) of the Employees Provident Fund Scheme, 1952

Amendment in para 60 and 72(6) of the EPF Scheme, [F. No. S-35012/01/2010-SS-1I] (15/01/2011)

Regarding Amendment in para 60 and 72(6) of the Employees Provident Fund Scheme, 1952 MINISTRY’ OF LABOUR AND EMPLOYMENT NOTIFICATION New Delhi, the 15th January, 2011 G.S.R. 25(E).—In exercise of the powers conferred by Section 5, read with sub-section (1) of Section 7 of the Employees’ Provident Funds and Miscellaneous Pro...

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List of CA Institute's Publications relevant for May, 2011 Examination

LIST OF INSTITUTE’S PUBLICATIONS RELEVANT FOR MAY, 2011 EXAMINATION . The following List of Institute’s Publications is relevant for the forthcoming examination i.e. May, 2011. Students may kindly take it into consideration while preparing for the ex...

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Posted Under: Fema / RBI |

Transfer Pricing – Reimbursement of incentive paid to employees through Indian co.

M/s. Aricent Technologies (Holding) Limited Vs. DCIT (ITAT)

The TPO in his order held that the payment of incentive to employees is towards technical services rendered by the assessee to the AE and that the AE has entered into such transaction to avoid paying a mark-up on the payments. In the transfer pricing documentation, since the assessee had shown its operating profit margin at 27.95% (OP/TC)...

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Posted Under: Fema / RBI |

Priyanka Chopra has unaccounted assets worth Rs 6 crore – IT Dept

The Income Tax raid at Priyanka Chopra's premises has revealed that the Bollywood actor has unaccounted assets worth Rs six crore, a senior official said today. Primarily of what we have scrutinised, we have found that assets worth Rs six crore were not accounted for, the Income Tax official said. However, the official did not divulge det...

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Posted Under: Fema / RBI |

President's Message – February 2011

Let me start my message with the words of a Gandhian Nobel Peace Laureate, Martin Luther King, Jr.: Let us not wallow in the valley of despair, I say to you today, my friends. And so even though we face the difficulties of today and tomorrow, I still...

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Posted Under: Fema / RBI |

ICAI inks MoU to train accountants in UAE

DUBAI: Institute of Chartered Accountants of India (ICAI) has signed an MoU with an Abu Dhabi-based research institute to train mid-rank accountants in the UAE . ICAI and Centre of Excellence , Research and Training (CERT), the commercial arm of the ...

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Posted Under: Fema / RBI |

Katrina Kaif claims no unaccounted income or unaccounted lockers declared

Ms. Katrina Kaif is a rather pained woman. The IT tax raids and the unsavoury publicity, notwithstanding, Kaif is rather miffed over tabloids tinting her a slimy tax evader. And this whole talk of her unaccounted moolah running into crores of rupees and the undisclosed lockers have quite rankled her starry nerves....

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Posted Under: Fema / RBI |

No VDIS scheme for those who stashed black money abroad – Gove Clarifies

The government said it has no plans to bring out a tax amnesty scheme to lure black money stashed away in foreign accounts. The finance ministry made this submission before Parliament's standing committee on finance. ...

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Posted Under: Fema / RBI |

Once the tax is deducted at source, the same cannot be levied once again on the assessee who has suffered the deduction

Yashpal Sahni Vs. Assistant Commissioner of Income-tax (Bombay High Court)

From the language of section 205, it is clear that once the tax is deducted at source, the same cannot be levied once again on the assessee who has suffered the deduction. Once it is established that the tax has been deducted at source from the salary of the employee, the bar under section 205 of the Act comes into operation and it is im...

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Upcoming changes to PayPal User Agreement for India With effect from 1 March 2011

With effect from 1 March 2011, Paypal Account holder in India are required to comply with the requirements set out in the notification of the Reserve Bank of India governing the processing and settlement of export-related receipts facilitated by onli...

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Posted Under: Fema / RBI |

Civil Court's jurisdiction in respect of SARFAESI proceedings?

The object of SARFAESI Act, 2002 is to enable the Banks to recover their dues without resorting to Civil Court for obtaining decree and consequential execution in accordance with the provisions of Civil Procedure Code. It is known fact that a proceeding initiated in a Civil Court can be prolonged unreasonably and everybody is aware of the...

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Posted Under: Fema / RBI |

Procedure regarding Transfer / Transshipment of cargo

Circular No. 08/2011-Custom Duty (28/01/2011)

Attention is invited to Board Circular No.6/2007-Customs dated 22.01.2007 which outlines comprehensive procedures and guidelines for transhipment of cargo from one Custom station to other Custom stations...

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Allocation of TRQ for import of Natural Rubber

Trade Notice No. 05/2011 (28/01/2011)

The applicants are advised to approach concerned Regional Authorities (as per jurisdiction) alongwith ANF 2B duly filled in with applicable fees to obtain the necessary authorization to import Natural Rubber as per allocation made to them, on or before 15th February 2011. RAs would be issuing Import Authorisation, after scrutinizing the ...

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Women power comes to the fore – ICAI

Institute of Chartered Accountants of India president Amarjit Chopra today said women taking up accounting profession have increased recently. Addressing the members of the local chapter Chopra said nearly 40 per cent of the 6 lakh students currently...

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Posted Under: Fema / RBI |

It dept claims it detects Rs 11 cr undeclared wealth at homes of Priyanka, Kasbekar'

Income-tax officials on Thursday claimed to have detected documents revealing unaccounted wealth of around Rs 11 crore during their searches at the properties of actress Priyanka Chopra and photographer Atul Kasbekar. Documents seized during searches at the office and homes of the two celebrities have reportedly revealed a total unaccoun...

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Posted Under: Fema / RBI |

SC asks govt to ascertain source of black money

Expressing concern that black money stashed in banks abroad might have originated from arms deals, drug trafficking and smuggling, the Supreme Court today asked the government as to what action it had taken against individuals and firms having foreign accounts....

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Posted Under: Fema / RBI |

Annual Financial Inspection – Priority Sector Loans – Mis-classification by Banks

RBI/2010-11/393 RPCD.CO.Plan.BC. 49/04.09.01/2010-11 (28/01/2011)

RPCD.CO.Plan.BC. 49/04.09.01/2010-11 It has been decided that henceforth the amount of loans wrongly classified under priority sector identified and reported by Principal Inspecting Officers (PIOs) during Annual Financial Inspection of banks will be taken into account for arriving at the shortfall under priority sector lending targets....

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Sebi to impart financial skills to home makers, students

Market regulator Securities and Exchange Board of India (Sebi) will impart financial education and investments skills to executives, home-makers and even school children, to spread awareness about sound investment practices and promote financial incl...

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Posted Under: Fema / RBI | ,

Treat corp funding to political parties as expense – ICAI

Corporate funding to political parties should be treated as expenditure in order to increase transparency in financial statements and curb black money flow, Accounting regulator ICAI has said. It also added that Companies Bill should incorporate this...

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Posted Under: Fema / RBI |

Empanelment of Schools/ Educational Institutions for holding May-2011 CA Exams & CPT June-2011

Empanelment of Schools/ Educational Institutions for holding May-2011 Chartered Accountants Examinations and Common Proficiency Test June-2011 The ICAI conducts Chartered Accountants Examinations in most of the cities in the Country as under :...

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Posted Under: Fema / RBI |

50 DoT officials under CVC scanner for graft

The Central Vigilance Commission has imposed major penalty on 226 officials of different government organisations for their alleged involvement in corrupt practices. Out of the total 226, a highest of 50 are from Department of Communications, 36 from...

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Posted Under: Fema / RBI |

Income Tax Scrutiny- Dept upgrading system to avoid scrutiny of Assessee for transaction done in one year in year after

Income tax department is upgrading its system to ensure an assesse, scrutinised for a particular financial transaction, does not land in trouble the year after. The income tax department has undertaken intensive upgrade of its software and systems responsible for picking up cases for intensive scrutiny. ...

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Posted Under: Fema / RBI |

Open market operations not debt mgmt tool – RBI

India's central bank said on Thursday open market operations in the bond market were a monetary policy tool for the Reserve Bank of India (RBI), and not a debt management instrument. ...

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Posted Under: Fema / RBI |

Govt plans to strengthen service tax regime and plug loopholes in various sectors

It is learnt from sources that finance ministry is likely to strengthen the service tax regime and plug loopholes in sectors like construction, oil and gas, telecom, works contract and industrial construction and will come out with clear guidelines r...

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Posted Under: Fema / RBI |

CUSTOMS Notification No 04/2011- Further amends Notification No. 21/2002 – Customs, dated 1st March, 2002

Notification No. 04/2011-Customs (27/01/2011)

In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes ...

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Rate of exchange of conversion of each of the foreign currency with effect from 1st February, 2011

Notification No. 06/2011-Customs (N.T.) (27/01/2011)

section 14 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.102/2010-CUSTOMS (N.T.), dated the 29th December, 2010 vide number S.O.3054 (E), dated the 29th December, 2010...

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Notification No. 05/2011-Customs (N.T.)- Appoints Common Adjudicating Authority

Notification No. 05/2011-Customs (N.T.) (27/01/2011)

In exercise of the powers conferred by sub-section (1) of section 4 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby appoints the Commissioner of Customs (Imports), Mumbai to ...

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Notification No. 4/2011-Customs (N.T.)- Appoints Common Adjudicating Authority

Notification No. 04/2011-Customs (N.T.) (27/01/2011)

In exercise of the powers conferred by sub-section (1) of section 4 and sub-section (1) of section 5 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby appoints the Additional ...

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CUSTOMS Notification No 03/2011 (NT) – Appoints Common Adjudicating Authority

Notification No. 03/2011-Customs (N.T.) (27/01/2011)

In exercise of the powers conferred by sub-section (1) of section 4 and sub-section (1) of section 5 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby appoints the Additional or Joint ...

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Construing ‘consent’ under section 399 of Companies Act, 1956?

399. (1) The following members of a Company shall have the right to apply under section 397 or 398:- a) in the case of a company having a share capital, not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth...

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Posted Under: Fema / RBI |

Assocham calls for gradual transition to avoid hiccups'

Amid confusion surrounding the progressive implementation of International Financial Reporting Standards from April, 2011, industry body Assocham has suggested that companies should initially be asked to only prepare their consolidated accounts as pe...

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Posted Under: Fema / RBI |

Govt plans to widen the scope of wealth tax in Budget 2011-12

The government plans to widen the scope of wealth tax in Budget 2011-12 to include several assets that escape the tax net as they are acquired through cash transactions.Armed with a survey on ostentatious display of wealth, the government is collecti...

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Posted Under: Fema / RBI |

More efforts needed to increase FDI inflows to country- RBI

The Reserve Bank today said efforts should be made to attract more Foreign Direct Investment (FDI) in the country, as they are more stable than portfolio investments. These remarks come a day after the central bank said that environment-sensitive pol...

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Posted Under: Fema / RBI |

Provides Relaxations in Branch Authorisation Policy

RBI/2010-11/ 390 DBOD.No.BL.BC. 78/22.01.001/2010-11 (27/01/2011)

In terms of Circular DBOD.No.BL.BC. 65/22.01.001/2009-10 dated December 1, 2009, general permission was granted to domestic scheduled commercial banks (other than RRBs) to open branches in Tier -3 to Tier- 6 centres (with population upto 49,999 as per Census 2001) and in rural, semi urban and urban centres in the North Eastern States and...

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RBI notification defining “Small Account" and prescribing rules related to opening of the same

RBI/2010-11/389 DBOD.AML.No. 77/14.01.001/2010-11 (27/01/2011)

These rules may be called the Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermedia...

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Establishment of Connectivity with both depositories NSDL and CDSL – Companies eligible for shifting from TFTS to normal Rolling Settlement- CIR/MRD/DP/ 01 /2011

Circular No. CIR/MRD/DP/ 01 /2011 (27/01/2011)

Establishment of Connectivity with both depositories NSDL and CDSL – Companies eligible for shifting from Trade for Trade Settlement (TFTS) to normal Rolling Settlement...

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Where assessee files its return u/s 44AD, it is not under obligation to explain individual entry of cash deposit

CIT Vs. Surinder Pal Anand (Punjab & Haryana High Court)

Section 44AD of the Act was inserted by Finance Act, 1994 w.e.f. 1.4.1994. Sub-section (1) of Section 44AD clearly provides that where an assessee is engaged in the business of civil construction or supply of labour for civil construction, income shall be estimated at 8% of the gross receipts paid or payable to the assessee in the previou...

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Depreciation on assets acquired out of foreign currency loans

DDIT (Int'l Taxation) Vs. Staubil A. G. India Branch Office (ITAT Mumbai)

The assessee has stated that additions to the fixed assets include loss of foreign exchange rates at the year-end which is added to the written down value of the block of assets. This adjustment pertaining to fixed assets i.e. (premises) acquired in India out of foreign currency loans. The assessee was asked as to why such claim should no...

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Cross-border services- Prior to 18-4-2006 services rendered by a non-resident service provider to a resident recipient could not be taxed as a service at the hands of resident recipient

S. R. Batliboi & Associates Vs. UOI (Delhi High Court)

In fact, the Bombay High Court in Indian National Shipowners Association v. Union of India [2009] 19 STT 408 (Bom.) has more than adequately dealt with the entire issue and inter alia concluded that it is only after enactment of section 66A that taxable services received from abroad by a person belonging to India are taxed in the hands of...

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The CIT must give reasons and basis for his conclusion that the order sought to be revised is erroneous

Crisil Ltd. Vs. Addl. CIT (ITAT Mumbai)

The assessee is mainly engaged in the business of rendering rating, advisory, and research and information services, and the assessee also has a unit registered under the software technology park scheme which is granted approval for "development and export of computer software, information technology and enabled services". During the cour...

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Profit on frequent purchase and sale of shares in short period by assessee has to be treated as `income from business’

Harsha N. Mehta Vs. DCIT (ITAT Mumbai)

The activity of frequent buying and selling of shares over a short span of period has to be treated as business being adventure in the nature of trade and the income has to be treated as business income and not as capital gain....

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Payment made for renewal of DOT licence should not fall under section 35ABB as it would fall more appropriately u/s 37

Bharti Airtel Ltd. Vs. ACIT (ITAT Mumbai)

The DOT licence fee paid by assessee is not in the nature of capital expenditure falling under section 35ABB, but the same is revenue in nature, allowable under section 37(1)...

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Just because creditors/share applicants could not be found at address given, it would not give Revenue the right to invoke section 68

CIT Vs. Dwarkadhish Investment (P.) Ltd. (Delhi High Court)

Though in Section 68 proceedings, the initial burden of proof lies on the assessee yet once he proves the identity of the creditors/share applicants by either furnishing their PAN number or income tax assessment number and shows the genuineness of transaction by showing money in his books either by account payee cheque or by draft or by a...

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Roaming charges paid by telecom service providers not in nature of ‘rent’ which attracts withholding tax

On the issue of whether such payments are, alternatively, in the nature of fees for technical services (FTS), liable to tax withholding under any other provision of the ITL, the Mumbai ITAT restored the matter to the Tax Authority for fresh adjudication in the light of the Supreme Court's (SC) directions in the case of Bharti Cellular Ltd...

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Posted Under: Fema / RBI |

Upon amalgamation rights of amalgamating company devolve upon amalgamated company

Speed line Agencies Vs. T Stanes & Co. Ltd [2010] 160 Comp Cas 33 (SC)- Supreme Court of India

The Supreme Court has, on facts of the case, upheld the decision of Madras High Court that from the scheme of amalgamation becoming effective, proceedings in which the transferor company was a party be continued and enforced by or against the transferee company in the same manner and to the same extent as it could be or might have been co...

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Govt considering Voting rights for NRIs

The government is considering the issue of granting voting rights to Non-Resident Indians and suggestions have been submitted to the Election Commission on the matter, Union minister for overseas Indian affairs Vayalar Ravi said on Sunday. Speaking...

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Posted Under: Fema / RBI |

Synopsis of Foreign Contribution (Regulation) Act, 2010

The Foreign Contribution (Regulation) Act, 2010 [FCRA] has been passed by both the houses of Parliament to replace Foreign Contribution (Regulation) Act, 1976 [FCRA 1976] to • regulate the acceptance and utilization of foreign contribution prohibit acceptance and utilization of FC or foreign hospitality for any activities det...

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Posted Under: Fema / RBI |

RBI’s subsidiary model will raise foreign banks’ tax liability- experts

An expert said under the new structure, foreign banks’ tax liability might go up if the wholly-owned subsidiary decides to pay a dividend, as such payments will attract dividend distribution tax. Tax liabilities of foreign banks will rise marginally ...

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Posted Under: Fema / RBI |

Regulatory framework for Core Investment Companies notified

Reserve Bank of India [RBI] had on 12 August 2010 issued guidelines for Core Investment Companies [CICs]. RBI has on, 5 January 2011 notified Core Investment Companies (Reserve Bank) Directions, 2011 [CIC Directions]. The CIC Directions and the conse...

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Sebi, RBI on watch for illicit Swiss money coming back home

Financial regulators Sebi and RBI have enhanced vigil on Indian entities routing their funds from secretly-held Swiss bank accounts to India through Dubai and other locations, on fears of getting exposed for stashing the money in the European nation....

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Posted Under: Fema / RBI |

Taxation of procurement activity undertaken by a foreign company through a liaison office in India

This ruling clarifies that the ‘purchase exclusion’ contained in the ITL for export of goods out of India can be relied upon by a non-resident only if income otherwise does not accrue or arise in India. This ruling also states that if a non-resident ...

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Posted Under: Fema / RBI |

Government Removes Shri Suresh Kalmadi and Shri Lalit Bhanot from OC , CWG 2010

The Government has decided today to remove Shri Suresh Kalmadi from the position of the Chairman of the Organizing Committee, CWG, Delhi, 2010 and the position of Chairman, Executive Board of the organizing, CWG, 2010 and Shri Lalit Bhanot from the position of Secretary General of the Organizing Committee, CWG, 2010 and from the position ...

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Posted Under: Fema / RBI |

Pass- through costs that are incurred for non value- added purposes should not form part of the cost base while determin

Cheil Communications India Private Limited Vs. Dy. Commissioner of Income Tax (ITAT Delhi), ITA No: 712/Del/2010

The ruling upholds and reiterates the OECD position on pass -through costs that are not incurred for value-added purposes. It will provide clarity and guidance to taxpayers and tax administration alike on the issue of determination of cost base in si...

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Press Statement by Ministry of Finance on issue of black money

So far there are no reliable estimates of black money both inside and outside the country. The interim recommendations of BJP Task Force 2009 have estimated the amount of black money to be between USD 500 billion to USD 1,400 billion. A current study...

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Posted Under: Fema / RBI |

Finance Minister Presents Presidential awards to Officers of Customs and Central Excise and Directorate of Enforcement

The Union Finance Minister Shri Pranab Mukherjee presented the Presidential Awards to the officers of the Customs & Central Excise and Directorate of Enforcement, here today. The officers of the Customs & Central Excise Department are considered for ...

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Posted Under: Fema / RBI |

NPA due to Bank’s mistake – remedies available to the Borrower – SARFAESI Act – a Case Study

There can be variety of credit facilities. In the course of adhering to the terms and conditions; like borrowers, the Banks too can commit mistakes and there can not be any doubt in this regard. Looking at the provisions of the SARFAESI Act, 2002, the rules, the practice and few precedents; borrowers and also professionals alike are doubt...

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Posted Under: Fema / RBI |

Satyam scam- ICAI to hold disciplinary meetings in Hyderabad

Institute of Chartered Accountants of India (ICAI) will hold all its Disciplinary Committee meetings on Satyam Computers multi-crore accounting scam henceforth in Hyderabad , ICAI Vice-President G Ramaswamy, Vice-President said on Monday. ...

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Posted Under: Fema / RBI |

Consensus on GST may take time Says Pranab Mukherjee

Finance minister Pranab Mukherjee today said the Centre is working at a "political level" with states for countrywide roll-out of goods and services tax (GST), but it may take some time to arrive at a consensus on the new indirect tax regime. "I am...

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Posted Under: Fema / RBI |

RBI hikes key rates by 0.25 Percent, retains GDP forecast at 8.5 percent

With a view to rein in high inflation, the Reserve Bank of India today raised its key short-term lending and borrowing rates by 0.25 per cent each with immediate effect. The short-term lending (repo) rate has been hiked to 6.50 per cent and the borro...

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Posted Under: Fema / RBI |

Purchase price of generic unpatented APIs from associated enterprises can be benchmarked against the price of same APIs

Serdia Pharmaceuticals (India) Private Limited Vs. ACIT (Mumbai Bench), ITA Nos: 2469/Mum/06, 3032/Mum/07 and 253 1/Mum/08

Purchase price of generic unpatented APIs from associated enterprises can be benchmarked against the price of same APIs sold by other independent producers despite difference in quality The Mumbai bench of the Income Tax Appellate Tribunal (Tribuna...

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Amount withdrawn from revaluation reserve and credited to the Profit & Loss account cannot be reduced from the book prof

Indo Rama Synthetics (I) Ld. Vs. CIT, New Delhi (Supreme Court) (Civil Appeal of 2011 arising out of SLP (C) No. 35133 of 2009)

The above ruling lays down that the amount withdrawn from revaluation reserve and credited to the Profit & Loss account cannot be reduced from book profit if such amount had not increased the book profit at the time of creation of reserve. ...

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Administrative expenses can not be disallowed under section 14A

The Commissioner Of Income Tax (CIT), Trichur Vs The Catholic Syrian Bank Ltd. I.T. Appeal Nos. 467, 720, 730, 843, 479, 1324 & 1045 of 2009 & 40 of 2010

So far as the disallowance of administrative expenditure is concerned, we feel considering the fact that there is no precise formula for proportionate disallowance, no disallowance is called for, for proportionate administrative cost attributable to earning of tax free income until Rule 8D came into force. We, therefore, dispose of the ap...

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Posted Under: Fema / RBI |

High Court has power to review its judgement u/s 260A

VIP Industries Ltd Vs. The Commissioner of Central Excise (CCE) (Bombay High Court)

In Commissioner of Customs and Central Excise Vs. Hongo India (P) Ltd., reported in 2009 (236) ELT 417 (SC), the Supreme Court approved this decision in M.M. Thomas (supra) and said that the High Court possesses all powers in order to correct the errors apparent on the face of record. In D.N. Singh Vs. CIT, reported in (2010) 325 ITR ...

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Transfer Pricing – Super-normal profit cos must be excluded from comparables. DRP must not pass cursory / laconic orders

Adobe Systems India Pvt Ltd Vs. ACIT (ITAT Delhi)

It is undisputed that these three companies have shown supernormal comparable profits as compared to the other comparable. There exclusion from the list of comparable is quite correct. By excluding these three companies from the comparables and showing the computation on the basis of TPO data the arithmetic mean of OP/OC to 17.15% which f...

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Format of Consent To Act As Director under Companies Act, 1956

I, the undersigned, hereby give my consent to act as a Director of the captioned Company pursuant to the provisions of Section 264(2)/266(1)(a) of the Companies Act, 1956. I hereby certify that I am not restrained/ disqualified/ removed of, for being...

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Posted Under: Fema / RBI |

Shri R. P. N. Singh Assumes the Charge of Minister of State for Corporate Affairs

Shri R. P. N. Singh assumed the charge of the Minister of State for Corporate Affairs here today at Shastri Bhawan. Secretary of the Ministry, Shri R. Bandyopadhyaya, and other senior officers of the Ministry of Corporate Affairs were present on the ...

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Posted Under: Fema / RBI |

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