The Tribune, Chandigarh, India

	Iran, Pak sign gas export deal Tehran, June 13 Iran and Pakistan formally signed today an export deal which commits the Islamic republic to supplying its eastern neighbour with natural gas from 2014. The contract is the latest step in completing a multi-billion dollar gas pipeline between Iran and Pakistan within the next four years. "This is a happy day," Iran's Deputy Oil Minister Javad Ouji told reporters at the contract signing ceremony in Tehran. "After decades of negotiations, we are witnessing today the execution of the agreement... To export more than 21 million cubic metres (742 million cubic feet) of natural gas daily from 2014 to Pakistan," he added. He said from Monday, Iran will start building the next 300-kilometre leg of the pipeline from the southeastern city of Iranshahr to the Pakistani border, through the Iranian port of Chabahar. Iran has already constructed 907 kilometres of the pipeline between Asalooyeh, in southern Iran, and Iranshahr, which will carry natural gas from Iran's giant South Pars field. Pakistan's Deputy Energy Minister Kamran Lashari, who was present at the signing ceremony, said Islamabad would conduct a one-year feasibility study for building its section of the pipeline. It will then "take three years for constructing the 700-kilometre pipeline" from the Iranian border to the Pakistani city of Nawabshah, he added. The pipeline was originally planned between Iran, Pakistan and India, but the latter pulled out of the project last year. Pakistan plans to use the gas purchased from Iran for its power sector. Ouji said Iran, which has the second largest gas reserves in the world, currently produces 600 million cubic metres of natural gas, of which 430 to 440 million cubic metres is consumed domestically. It plans to raise output to 900 million cubic metres over the next three years with the expansion of South Pars and hopes to further hike it to 1,100 million cubic metres by 2015. — AFP
	Broadband Wireless Access RIL’s entry may spark tariff war Tribune News Service New Delhi, June 13 Getting the backing of his younger brother Anil Ambani over Reliance Industries making a foray into the telecom sector with the buyout of Infotel, the Mukesh Ambani-led company would not only be looking at making quick giant strides but may force a new tariff war in the sector as it goes about attracting customers. The broadband sector remains a highly lucrative and the buyout of Infotel, the only company to have won a pan-India licence for the BWA, clearly reflected that it always had the backing of the RIL. It also reflected the seriousness of the elder Ambani’s company about their interests in the sector, which remained the most explosive sector even during the downturn in the country. Incidentally, Anil Ambani’s ADAG chose to withdraw from the bidding in the BWA leaving the field open for his elder brother, who was the force behind undivided Reliance’s entry into the telecom sector, to regain a foothold in the Indian market. With over 400 million subscribers in the mobile telephony sector and a huge potential awaiting in the broadband sector, Indian market remains one of the fastest-growing telecom market in the world. Experts said the impact of immediate cash outflow post-bidding will be limited since big listed players either opted out of the process or participated only in a few circles. But the entry of RIL could well mark the beginning of not only a tariff war but also one of holding onto their turf for the existing BWA operators. There would not be much affect on the outflow for the big players with Bharti Airtel, the country’s largest telecom player, winning licences in just four circles for a total of Rs 3,314 crore and RCom and Idea Cellular decided to opt out of the bidding. Experts say the entry of RIL is expected to bring down the operating margins from existing level of 40-45 per cent for the segment. However, they point out that the impact of RIL’s entry may not be felt as much by the already existing large telecom operators but would have a major impact on pure broadband players. This, as telcos earn a substantially lower portion of revenue from this segment. Pure play broadband players such as Tulip Telecom and Tata Communications may see an erosion in margins in case of a tariff war. The effect of a possible price war in the wireless broadband will also be felt by players such as You Broadband and Cable, which currently provide wired broadband services. Broadband prices will be dragged down by competition, experts say. Experts also foresee emerging opportunities in the field of WiMAX solutions. WiMAX holds promise especially for rural internet connectivity, given its ease of installation of last-mile connectivity.
	Airtel launches voice-blogging service New Delhi, June 13 Telecom major Bharti Airtel today gave social networking a voice with the launch of its voice-blogging service, allowing millions of subscribers to share recorded voice updates with their friends and family members. The 'Airtel Blog', which was officially unveiled today, had already roped in two million users in the first three months of its soft launch and is currently the world's fastest-growing voice-oriented social networking service, Bharti Airtel said. Through the service, Airtel mobile users can share recorded voice updates with their friends, family, or fans, adding a voice to social networking, it added. "Perhaps one of the fastest-growing value-added services in our stable in recent times, Airtel Blog is taking the concept of micro-blogging to an entirely new level," Bharti Airtel president (mobile services) Atul Bindal said. — PTI
	Market Update Advance tax, global cues to dictate trend by Lalit Batra Last week, it was a week of gap-downs and gap-ups. Finally, the market ended the week with minor losses as revival of monsoon, robust industrial production data and strong exports data from China, helped stocks bounce back from a sharp fall registered at the onset of the week. The BSE Sensex fell 52 points to 17,064 and the S&P CNX Nifty fell 16 points to 5,119 last week. Industrial output rose much faster than expected at 17.6 per cent in April 2010 from a year earlier on strong consumer demand and government spending. India’s monsoon delivered normal rainfall in the past week as per the India Meteorological Department. This is after an initial hiccup when cyclone Phet hindered the advance of the June-September monsoon, which irrigates 60 per cent of farms in India. The going ahead will be dictated by advance tax collection numbers and movement of the global markets. Long-term investors may buy stocks on dips as the Indian consumption story remains robust and intact. Allied Digital Services Allied Digital Services Ltd (ADSL) is an IT infrastructure management and technical support services (IMS) outsourcing company. It provides wide spectrum of technology solutions and services to a diverse customer base from BFSI, retail, telecom, manufacturing and BPO verticals. The company has a presence in over 132 locations in India and over 27 locations in the US. Industry prospects RIM or remote infrastructure management is seen as the next big growth engine for the offshore services industry. RIM involves handling clients’ technology infrastructure — from network services and help desk support to server maintenance and desktop management — from an offshore location. The industry is moving towards a remote delivery model (RIM), where services are increasingly delivered by vendors from low-cost locations. The addressable market for RIM is pegged at around $ 100 billion, which is comparable to the size of addressable market for core IT services like application development and maintenance and BPO. Changing business mix Allied Digital has successfully witnessed a change in its business-mix over the past couple of years. The company has moved up the value chain by reducing the dependence on hardware-intensive deals. Now, the company derives over 50 per cent of its revenues from managing IT infrastructure. There are several benefits from this shift that could accrue for ADSL in the future. IMS enjoys better margins through better billing rates and most of the services for clients abroad are being delivered remotely (RIM), which helps the company manage its costs well. And then, most of the IMS contracts are annuity based, which lends a good revenue visibility for ADSL. Inorganic growth ADSL has taken several inorganic growth initiatives (acquisitions) in the past to strengthen its organic efforts. It has formed various alliances to strengthen its services and solutions businesses. The focus has been more on the IMS space. ADSL acquired En-Pointe Global Services (EPGS) in 2008 to get a foothold in the US and access to a large customer base for the IMS business. This acquisition opened huge opportunities for ADSL’s growth in the US for its RIM and especially compliance solutions segment. Regulators across the world are looking to enhance compliance transparency and reporting from institutions. EPGS’ acquisition thus enhances compliance solution opportunities for ADSL across the world. The fact that EPGS is a well-established company gives ADSL a ready base to expand its presence and leverage on the cross-selling opportunity in RIM in the US market. Looking at the industry prospects and the fact that ADSL is poised to explore that growth, investors may buy into the stock of ADSL around the current market price of Rs 225 for a medim term.
	Tax Advice No tax on interest from PPF account by SC Vasudeva Q. I shall be thankful if you please let me know: 1. Whether interest earned on post office PPF a/c is free from income tax. 2. The amount deposited in post office 5 yearly recurring deposit is taken as saving u/s 80C of income tax or not. — Ramesh Chopra A. Your queries are replied hereunder: (i) Interest earned on Public Provident Fund account in not taxable. (ii) The amount deposited in post office for 5 years recurring deposit is not eligible for deduction under Section 80C of the Act. Form 16 A Q. I want to know whether there is any provision for revising Form 16 A? — Rahul A. Rule 31 of Income-tax Rule 1962 which provides for the issue of Form 16A does not contain any provision for the revision of such form. Sub Rule 3 of the said Rule deals with the issuance of a duplicate form in case the original is lost by the assessee. II Q. Is there any provision in Income Tax Act 1961 and some other act regarding correction of Form 16A issued by the deductor to deductee? My deductor deducted tax under Section 194J. While doing so, the deductor (i.e. bank) took into consideration stamp fees (paid by me on their behalf) & deducted tax on that also which is other than professional or technical fees (as prescribed under Section 194J). The bank issued Form 16A to me by deducting tax on stamp fees also. Stamp fees was paid to me by crediting my savings account. Now what is the best option for me while filing my return and also while drafting my profit and loss account? Should stamp fees be taken into income side of profit and loss account? — Sanjay A. Rule 31 dealing with the issue of Form 16A does not contain any provision for the revision of Form 16A. It would be advisable to show the amount on which tax has been deducted at source, as your income and seek the deduction of expenditure incurred in connection therewith while computing the total income for the purposes of the assessment. Creating HUF Q. I want to know how I can create my HUF? I am married without any son/daughter. Also, I have no property or agricultural land in my name. — Rahul A. The joint and undivided family is the normal condition of Hindu society. An undivided Hindu family is ordinarily joint, not only intestate, but also in food and worship. The joint and undivided Hindu family is different from a Hindu co-parcenary. A Hindu co-parcenary is a special feature of Mitakshara School of Hindu law. A co-parcenary includes only those who acquire by birth an interest in the joint or co-parcenary property. A Hindu undivided family is a unit of assessment under the Income-tax Act 1961 (the Act). It consists of all persons lineally descended from a common ancestor and includes their wives and daughters. A Hindu undivided family is a creature of law. It is only the corpus which can be thrown into such a family so as to make it a unit of assessment. Such a corpus can be obtained by a joint family by receiving a gift which can generate income for the purposes of an assessment. Such a gift should be evidenced by a gift deed. Your family can thus take a gift so as to form a unit of assessment under the Act. It is also possible to throw one’s individual property in HUF. However, in such a case provisions of Section 64(2) of the Act would become applicable whereby any act of impressing such separate property with the character of the property belonging to the family or throwing it into the common stock of the family or transfer of any such property to the family otherwise than for adequate consideration, then, notwithstanding anything contained in any other provisions of this Act or any other law for the time being in force, there shall be a deemed transfer of such converted property to the members of the family for being held by them and the income derived from the converted property or any part thereof shall be deemed to arise to such an individual and not to the family.