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Sunday,
March 24, 2002, Chandigarh, India  
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Farooq seeks investors’ help to develop J&K
No FDI in print media, says Standing Committee
Make levy rice payment: millers
I-Flex IPO by first week of May |
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Milkfed to work for dairy farmers
In the wonderland of investment
Punjab Laminates
gets ISO
Bharti offer on Magic card
Aviation sector needs concessions
Open land
Local tax to hit Punjab industry
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Farooq seeks investors’ help to develop J&K New Delhi, March 23 ‘’The state has substantial natural resources and several sectors are open for collaboration...The industrialists should capitalise on the potential state,’’ Dr Abdullah said at an international launch of the Kashmir Vision 2020, at Wisitex 2002 exhibition here last night. He said the world terrorism has to come to an end. ‘’All out efforts need to be made to take the state out of tragedies of past 13 years to a better future,’’ Dr Abdullah said. A sustainable economic development was the real answer to the problems, which have arisen due to disturbed conditions in the state. ‘’Economic development depends upon exploiting the natural and human resources of the state, particularly in latest technologies.’’ He called upon the investors to invest in horticulture, floriculture, information technology, food processing, industrial infrastructure and power sectors. Dr Abdullah also asked them to visit Kalakote coal mines in the Jammu region and explore the possibilities of investing in this sector. The Chief Minister said the last foreign participation in the state was a power project, in collaboration with Hungary. After that no new projects have been taken up, he added. He said handicraft was another sector, which could draw investors. In his message on the occasion, Minister of State for External Affairs Omar Abdullah expressed the hope that the Kashmir Vision 2020 will give a major boost to the investments in the state. “The 21st century is the century of super highways in knowledge and technology sectors and I hope bid business houses will participate in the development of the state in a big way,” he said.
UNI |
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No FDI in print media, says Standing Committee New Delhi, March 23 The report, on the entry of ‘Foreign Print Media and Foreign Direct Investment in Print Media’, presented to the Lok Sabha and laid before the Rajya Sabha later, “however thinks that publication of foreign scientific and technical magazines can be allowed for the benefit of the students of science and technology and the scientific community in collaboration with well-known or competent Indian publishers dealing with the subject.” The report said the entry of foreign investors would have the potential of “polluting” the cultural life and changing the “basic orientation” of the Indian mind in the long run. The Committee, headed by CPI-M leader Somnath Chatterjee, did not approve the contention by some witnesses that foreign investment should be allowed with a “reasonable cap” on the foreign shareholder. “Whether 10 per cent of the shareholding will enable the foreign company to control the management or 51 per cent, entry of foreign interest in the domestic print media sector is detrimental to the interest of the country,” the Committee held. The Committee felt it was pointless to argue that foreign equity upto 25 per cent was safe. It felt the foreign investor, even with a minority shareholding, could gain effective control of management and editorial board of the newspaper through a shareholders agreement or a loan agreement. The Committee said the foreign investor who came forward to invest in the Indian newspaper industry would do so not merely due to the lure of returns but “because of the tempting prospect of gaining enormous clout in the socio-political life of this country”.
UNI |
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Make levy rice payment: millers Jalalabad, March 23 Mr Rajan Gumber, a spokesman of the local Rice Millers Association has alleged that the outgoing state government diverted the levy rice payment received from the Central government in other development works thus flouting the Levy Rice Control Act. According to which the govt is bound to release the payment within 24 hours, where as it is due for the last three months. He urged the state govt to ensure the levy rice payment to the millers. This part of the state is already under the financial crunch due to recent disturbances on the border, deployment of army and laying of mines in most of the agricultural fields. He has also suggested to arrange the payment of levy rice directly from the Central government, by which the smooth payment will be ensured, as this has been adopted by Haryana, UP and Andhra
Pardesh. |
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Amitabh, Sachin in Pepsi ad New Delhi, March 23 One is the universally acknowledged star of the millennium while the other is the undisputed batting maestro. For the first time in the country’s advertising history, Amitabh Bachchan and Sachin Tendulkar appeared together for an advertisement. Pepsi Foods has roped in the two biggies for its coming commercial, one of the costliest being shot till date, which is expected to create ripples in the advertising circuit. “The ‘Yeh Dil Maange More’ campaign is in its fourth year now and we could not have asked for a better combination of public icons who personify the desire to do more in their lives than Amitabh and Tendulkar. Also, the reason for shooting the commercial in Jodhpur is simple as it is the Blue City and blue happens to be the theme colour for Pepsi,’’ says Rohit Ohri, Vice-President and Client Services Director HTA, the agency behind the ad. Pepsi has just shot an ad with Kareena Kapoor, Fardeen Khan and TV star Amar Upadhyay. And earlier, Tendulkar and superstar Shah Rukh Khan had appeared in an ad as well. Although Amitabh has been with Pepsi for over three years and Sachin has been lending fizz to the brand for over eight years now, their other advertising obligations did not allow them to come together earlier. The Big B has apparently been paid a huge figure to appear in the 60-second television advertisement, which has been shot in Jodhpur and is being directed by Prahalad Kakkar. ‘’Pepsi itself has used Shah Rukh and Sachin in an advertisement. Still, considering the crest of popularity that both of them are riding at the moment, there is no reason why the idea should not click. After all, Amitabh is a megastar today and Sachin, well... is Sachin,’’ Ohri adds. UNI |
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I-Flex IPO by first week of May New Delhi, March 23 “It takes at least three weeks to get an approval from the SEBI for the IPO. We hope to get the nod by April 11 and after that it would take another 20-22 days to chalk out allotments and hit the market in the first week of May,” I-Flex chief financial officer Deepak Ghaisas told PTI from Mumbai. The company submitted a draft prospectus to the SEBI on March 21. The company plans to offload 10 per cent stake totalling 3.96 million shares to the public at face value of Rs 5 a share. Ghaisas, however, did not comment on the premium or the size of the IPO, which would be fixed entirely through the book-building process. In January 2002, the company roped in Standard Chartered Bank as its
strategic partner by privately placing a portion of equity at a price of Rs 650 a share. I-Flex would be the first software company to tap the market in the last 18 months. The company would hold a 12-day roadshow in India and abroad to generate interest among the investors soon after getting the SEBI nod, he said. “We will be holding roadshows for the upcoming issue from April 15 onwards in Indian cities like Mumbai, Delhi, Bangalore, Ahmedabad, Hyderabad, Kolkata and Indore. We will also hold roadshows in overseas markets like Singapore, Hong Kong, Frankfurt, Milan, London, Edinburgh and Amsterdam,” Ghaisas said.
PTI |
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Milkfed to work for dairy farmers Chandigarh, March 23 Dr Mahajan said Milkfed had launched various programmes including the productivity enhancement programme. The objective of the plan is to produce maximum milk of the best quality at least cost per litre at the dairy farmer’s level and utilise it at milk plants for high standard value-added products to earn maximum income and in turn paying remunerative price for raw milk to the milk producers. Out of total 12,428 inhabited villages in Punjab, Milkfed plans to bring 8,000 villages under dairy co-operative societies by 2004, which are at present 6,600 and he is also looking for vision 2010
wherein around 10,000 villages will be covered under dairy co-operatives. Under the programme, major emphasis is being laid to educate the farmers and to provide technical input services to reduce the cost of milk production. One of the major component is cattle breed improvement programme for which Milkfed is exploring possibility of having a long-term joint venture with the Live Stock Improvement Corporation (LIC), New Zealand. |
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In the wonderland of investment Q: Our company has a policy of paying 15 per cent of basic salary of an employee towards company’s contribution towards superannuation every year to the LIC. The contribution made by the company gets forfeited or does not get accrued to an employee if he/she quits the company before completing a continuous service of 5 years. However, in case of an employee getting transferred to our group and posted abroad, the management approves payment of superannuation to such employee upon receipt of refund of superannuation contribution from the LIC. 1. Whether such payment of superannuation by the company to our ex-employee is taxable in the hands of the employee? If yes, what happens if the employee gives us a declaration in writing that he/she does not have any income in India or the income earned in India is less than the exemption limit? What happens if the employee is not in a position to give us any declaration? 2. What should be the accounting treatment of such refund received by the company in the current year given the fact that whenever such contribution was remitted to the LIC in the previous years, contribution was charged to revenue and was claimed as a revenue expenses and it was fully allowed in the assessment? 3. What happens if the refund received by the company in the current year is taken to an income account and a part of it is refunded in the subsequent years? Whether such subsequent refund can be claimed as a revenue expenses?
—- Vimal Kishore Soni, C.A. A: Payments made to LIC by the company is on expense amount. Payments received from LIC by way of forfeiture is on income (= negative expense) account. Money paid out of this forfeited amount to the employees is again an expense. The following are provisions in the Act: Where any contributions by an employer including interest, are repaid to the employer it shall be deemed to be income of the employer. Where contributions made by the employer including interest, are paid to an employee during his lifetime, (in circumstances other than those refer to u/s 10 (30) the employer shall apply TDS at the average rate of tax at which the employee was liable during the 3 preceding years. I wonder why you are asking this question. Obviously, your company has been in existence for quit a number of years and is surely some method to account for these transactions. Any change in the method already allotted will require the Department’s permission. Q: I have a house (self occupied), the construction of which has been completed in May 2001, I had taken loan for the said house from SBI in Nov 99 and I am availing the house tax rebates for interest as well as principal for the said house in the current financial year. I had taken a second loan of Rs 1,15,000 from SBI only in July 2001 for construction of one room along with attached latrine and bathroom to the aforesaid house, the completion of which is expected by end January. Can I claim house tax rebate for interest as well as principal for the second loan? If yes, what all documents need to be submitted along with IT return? —- Shirish Penurkar A: Where there are more than one self-occupied property, only one property, as per the choice of the assessee can be taken at nil value. All others will be treated as let out. There is no ceiling on the deduction of interest on let-out properties. Rebate on repayment of capital is riddled with a small confusion, where the assessee has taken loans for acquiring or purchasing two or more houses. To explain this, let me draw a parallel from exemptions on long-term capital gains u/s 54 and 54F. Exemptions u/s 54 as well as 54F are available if the assessee purchases or constructs a residential house within stipulated periods. The villain causing confusion is the article ‘a’ used before ‘residential house’. The word seems to imply that the exemption would be available if and only if the assessee invests in one residential house and the amount of exemption would be limited to the cost of that one house. I strongly feel that this was not the intention of the legislation. If it were, the word ‘one’ would have been specifically used or an explanation given. Nonetheless, most of the ITOs have been construing it to mean one, unless they like the face of the assessee. Coming back to the rebate u/s 88, it is available if the loan is taken —- for the purposes of purchase or construction of a residential house property.... Same confusion. However, in this case, the error does not hurt as much as it does in the case of capital gains. All that it can be construed to mean is that an assessee cannot buy 2 houses simultaneously with the same loan. If you have purchased two (or more) flats through housing finance, you can claim the interest deduction and also the tax rebate on both the flats. However, the ceiling on Sec. 88 rebate will remain at Rs 20,000 whether it is one or two flats. The story for interest is different. One of the flats of your choice can be claimed as self-occupied with no notional income. The ceiling on deductions will be Rs 1.5 lakh depending on the date of the loan. The other flat will be deemed to be let out and you can claim the entire interest paid on the loan as a deduction and there is no ceiling. On more interesting aspect. You are entitled to choose one house as self occupied and the other as let-out and during subsequent years, reverse the order. |
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Punjab Laminates gets ISO Chandigarh, March 23 The company with its registered in Jalandhar and factory at Mehatpur in Una was started in 1986 by Mr B.S. Bindra and is presently engaged in the manufacture of decorative and industrial laminates in 150 designs in five impressions from 0.8 mm to 15 mm thickness. At present it is the leading supplier to Indian Railways. Mr Amit Bindra, the Vice-President of the company, was recently on a mission to South Asia. The export potential to Europe, USA and Russia is extremely good, says Mr Bindra. |
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Bharti offer on Magic card Chandigarh, March 23 The customers will be eligible to attend a musical show performed by Karisma Kapoor on Monday. In addition, three lucky customers chosen by draw of lots will get an opportunity to dine with her. “With its generic benefits of no rentals, no security deposits, no bills, instant connectivity, STD and ISD connection, ease of availability and low entry costs, Magic has registered impressive growth throughout the country and will be a key growth driver for the Punjab market as well”. |
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Aviation sector needs concessions COME
April 1, Qantas Airways, the Australian national carrier, will discontinue operations in India. Indeed traffic to Australia has shown improvement in the last two-three months, but the Qantas authorities believe that the traffic is not high enough to continue the operations. There are mixed opinions about global downturn in the Indian aviation. Some airline officials claim that carriers, which withdrew operations post September 11 attacks in the USA, are wanting to resume operations. But the Directorate-General of Civil Aviation (DGCA) is raising technical problems. Many experts, however, are emphatic that the improvement is only marginal and the flying weather is not yet serene for full-throttled operations. Whatever may be the existing situation, travellers are being harassed and subjected to inconvenience. As the capacity has reduced following withdrawal of operations by several airlines, the demand has increased. There are instances of offloading of passengers at international airports in Delhi and Mumbai. Qantas officials are generally realistic in their review and assessment of the market. Their withdrawal points to “uncertain trends” prevailing in the market. Empty talk The fleet expansion plans in Air India and Indian Airlines have gone haywire. If these are caught between politicians and bureaucrats, private operators have placed their proposals on the backburner because of unstable conditions in the Indian skies. The budget allocation has also failed to boost the aviation sector. It was hoped that Yashwant Sinha would be sympathetic and realistic to provide certain concessions like cut in aviation turbine fuel (ATF) prices and considerable reduction in airport levies. Indeed it will be beneficial to the airlines to exempt them from paying customs duty on import of air craft/helicopters, gliders and simulators. But more concession in the area of landing and parking fees will have provided much-needed relief. The Minister for Civil Aviation Shahnawaz Hussain has said. “We will provide all facilities to foreign airlines to resume operations’. |
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Open land Q: If licence in respect of open land in tenancy of Defendant No. 1 was granted further to Defendant No. 2 and 3 without the consent of the landlord, would it be a good ground for eviction? Ans: Gujarat H.C. was dealing with this point in Amrutlal J. Trivedi v Smitaben B. Sheth [2001 (2) RCJ 350]. The plaintiff is the owner of one open land Defendant No. 1 is the owner of the construction. Defendant No. 1 let out only open land for the purpose of motor repairs. Defendant No. 1 ceased in dealing in motor repairs and had illegally let out the premises to defendant No. 2 and 3 for monetary consideration Tenancy of defendant No. 1 was determined by notice. Yet, she did not vacate and hence the suit for eviction. The suit was decreed by the trial court but the appellate court set aside the decree and hence the present revision before the H.C. S.13(1) (cc) of the Bombay Rent Act provides that the landlord shall be entitled to recover possession of any premises if the Court is satisfied that the tenant after the commencement of this Act given the whole or any part of the premises on lease by monetary consideration to any person without previous permission of the landlord. Monetary consideration for granting licence is established in as much as, it is in evidence that the defendant No. 2 was paying Rs 1500 to the Defendant No. 1 and Defendant No. 3 was paying Rs 2100 to the Defendant No. 1. Thus, if the licence in respect of the open land in the tenancy of the defendant No. 1 was granted to the Defendant No. 2 and 3 for monetary consideration and whole of the premises, namely, open land was as assigned or transferred under licence to the Defendants No, 2 and 3, the Defendants are rendered liable for eviction U/s. 13(1) (cc) of the Act, held the H.C. There is no evidence that the defendant No. 1 granted licence to the defendants No. 2 and 3 with the previous consent of the landlord. The theory of dual ownership is hardly of any significance on the facts and circumstances of the case, opined the H.C. and the tenant-in-chef so also the so-called sub-tenants, assignee or transferee from the tenant-in-chief or licence from the tenant-in-chief cannot escape from decree of eviction. As a result, the H.C. held that the view taken by the lower Appellate Court is contrary to law and affirmed the view taken by the trial court. With the result, the H.C. confirmed the order of eviction of the defendants. In that way, the H.C. allowed the present Revision application.  |
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Local tax to hit Punjab industry In the Finance Bill, 2002, the Ministry has proposed that in Section 8 (Sub section 1) of the CST Act after the words “4 per cent of turnover” the words “or at the rate applicable to the sale or purchase of such goods inside the appropriate state under the sales tax law of that state” be inserted. As per the amendment the ceiling of 4 per cent CST has been removed. Mr Sinha has also allowed states to impose local sales tax more than once on all declared goods. Such good are of national importance and had been kept under the ceiling of 4 per cent. Under section 14 of the CST Act these goods include cereals like paddy, wheat, cereals, coarse grains, cotton, cotton fabrics and yarn and iron and steel, etc. Amendment of Clause (a) of section 15 of CST empowers the states to impose local sales tax on declared goods at more than one stage within the state. On goods other than declared goods sales tax rate will now be calculated at 10 per cent or at the rate applicable to the sale/purchase of such goods inside the appropriate state whichever is higher. These amendments have proposed as a built-up to ushering in the VAT regime from next year. Earlier the government had given the notion that the CST rate will be reduced gradually with the ultimate aim of eliminating the tax to avoid cascading of taxes under the new tax regime. The proposed amendment includes other vital issues on sales tax. Although Commodity Taxation Laws cover only sale transactions constitution was amended in 1982 to provide both the Centre & the state governments to tax other transactions like; transfer to branches in other states; transfer of property in goods by way of execution of works contract; delivery of goods under hire purchase; supply of foods and refreshments by hotels, etc. Finance Bill 2002 has now proposed to include these transactions within the meaning of “sale”. These changes will have serious consequences to consuming states like Punjab where most of the items of consumption come from outside. Bulk of items of production in Punjab go out of the state. Higher rates of tax on inter-state transactions will make Punjab’s industry totally unviable.
P.D. Sharma, Ludhiana |
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