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| Sunday, September 10, 2000, Chandigarh, India   
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Panel to probe
steel projects Amnesty scheme
fetches Rs 108 cr Disposal of cases in consumer courts slow
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Tourism revival
in Haryana Petro dealers threaten to
stop work Internet to change
market scenario
Rules for money changers
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Panel to probe steel projects NEW DELHI, Sept 9 — The Ministry of Steel has constituted a committee to enquire into the implementation of modernisation projects of Durgapur and Rourkela steel plants of SAIL. The committee headed by Mr J.S. Baijal, former Secretary in the Planning Commission, will enquire into the large cost and time overruns of these projects. This was announced by Minister of Steel, Braja Kishore Tripathy at a press conference here yesterday. The committee has been asked to submit its report within six months. The other members of the committee are Mr S. Samarpungavan, former Chairman of SAIL, Maj. Gen. (retd.) C.L. Verma, former Chief Engineer, Northern Command and Mr K.R. Sangameshwaran, former Managing Director, Bhilai Steel Plant. Mr R.K. Prasannan, Development Commissioner for Iron and Steel will be the convener of the committee. Mr Tripathy said the government had approved the modernisation of the Durgapur and Rourkela steel plants in February and October, 1989, at estimated costs of Rs. 2,668 crore and Rs. 2,461 crore respectively. The projects were finally completed in March, 1998, and November, 1999. The revised costs of these projects are estimated to be Rs. 5,075 crore and Rs. 5,105 crore respectively. The main objectives of these projects were to replace old and obsolete technology, overcome production bottlenecks, improve productivity, energy efficiency and the quality of finished products. The Parliamentary Standing Committee on Industry has also recommended that a high-level enquiry should be conducted in the undesirably large cost and time overruns in the modernisation projects. |
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Amnesty scheme
fetches Rs 108 cr NEW DELHI, Sept 9 — The Department of Company Affairs has managed to earn Rs 28.52 crore from companies in the Northern region which took advantage of the Company Law Settlement Scheme-2000 during its first three months ending August 31. Though only 35 per cent of the 2.54 lakh defaulting companies in the country have responded to the scheme, it has fetched more than the targetted Rs 100 crore set by the department. It has now extended the scheme by one month ending September 30, 2000. Under the law registered companies were required to submit various documents to the department. The amnesty scheme further allowed them to rectify their default by paying a lumpsum payment. According to the confirmed figures received by the Department of Company Affairs, companies all over the country paid Rs 108.64 crore to rectify their default. Of this Rs 35.14 crore came from the Western region, Rs 32 crore from the Southern region and Rs 12.98 crore from the Eastern region. The department said that the corporate sector has at last realised that if they do not respond positively to the amnesty scheme, they would not only have to pay fines which are 10 times higher than the present amount but also would have to face prosecution. The scheme has since been extended by one month ending September 30. During the extended period, the lumpsum one time settlement has been increased by 10 per cent. The department said that the defaulting companies which have filed all the necessary documents under the amnesty scheme can now approach the respective Registrar of Companies to get their name struck off from the register of companies. |
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Disposal of cases in consumer courts slow THE grant of special funds by the Centre to the consumer courts in Punjab did not yield the desired objective of reducing the pending cases and speedy disposal of the cases. The Centre has given ‘one time grant’ for strengthening of consumer disputes redressal commission (State Commission) and district consumer disputes redressal forum (district fora) with the object to dispose of pending cases in consumer courts. The Centre had released Rs 1.80 crore for Punjab. Out of Rs 1.80 crore received as one time assistance from the Centre, Rs 0.35 crore was lying with the state government and Rs 0.33 crore were with the State Commission/district fora. Rs 0.27 crore, according to the report of CAG for the year ending March 1999, were utilised for making payment of cost of land for which there was no provision in the scheme. Insufficient utilisation of funds (47 per cent) resulted in non-provision of additional infrastructure in the consumer courts which hampered the disposal of pending cases within stipulated period. Thus, the purpose for release of grant was defeated. Scrutiny in audit revealed that monitoring reports were not evaluated and the second instalment was released to all district fora though in three districts fora of Amritsar, Gurdaspur and Mansa no case was disposed of and in two district fora of Hoshiarpur and Kapurthala the disposal was less than 50 per cent. Similarly third and fourth instalment was released to Mansa district forum even though disposal of cases was only 60 per cent. This resulted in irregular release of funds to the tune of Rs 3 lakh. The Centre provided funds for 13 district fora originally included in the scheme. Scrutiny of records, however, revealed that Rs 8 lakh were released by the State Government to four district fora of Fatehgarh Sahib, Moga, Muktsar and
Nawanshahr, though they had not been included in the scheme and no funds had been provided for them by the Centre. The state government intimated in August 1999 that the prescribed norms were duly achieved by the district fora. However, the CAG has not agreed with it. As per scheme 100 per cent disposal of cases within 90 days as laid down under the Consumer Protection Act, 1986, was to be ensured by the State Commission. During scrutiny of the record relating to cases finalised, the State Commission and 13 district fora during the period between July 1995 and December 1998, it was noticed that 1,714 and 9,621 cases, respectively, were finalised after the expiry of 90 days. Of these 8,355 cases were even decided after the expiry of 150 days. While releasing the assistance for speedy disposal of cases, it was provided that the state government should insist on final disposal of at least ten cases per day in the State Commission as well as in each district fora. It, was, however, noticed that the average rate of final disposal of cases per day in the State Commission and 13 district fora was 2.53 and 1.72, respectively, which is much below the standard norm prescribed by the Centre thereby resulting in accumulation of 4760 cases in State Commission and district fora at the and of March 1999. The State Government attributed delay in disposal of cases to lack of funds, existence of vacancies of president and members in the State Commission and district fora and inadequacy of staff. The reply was not considered to tenable because both financial and administrative control vested in the government which as such should have itself redressed such problems for achieving speedy disposal of cases. |
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Tourism revival
in Haryana THE Haryana tourism department is engaged in executing numerous projects to boost tourism in the state. Private entrepreneurs are being encouraged into the sphere of tourism promotion by offering incentives for more diversified tourism in the state. So far 48 tourism projects with an investment of Rs 351 crore and a capacity of 3,394 rooms have been approved in the private sector. Out of these, 25 hotel projects have been completed and commissioned. The government has constituted the State Tourism Promotion Board to constitute and approve hotel/tourism project received from the entrepreneurs. The government has approved the policy of collaboration/joint venture with the private sector. The joint venture will be entered in the field of setting of hotels, motels, resorts and beauty parlours, amusement parks, multiplex complexes, golf courses and shopping arcades. During last year
Haryana tourism opened a number of new avenues and protects for providing more facilities to tourists. It has started the ethnic India project at Rai where a fast food centre and a motel with 10 guestrooms were opened. Similarly a new motel was opened it Tilyar lake near Rohtak and a fast food centre was added to it. Besides new projects, Haryana tourism has upgraded its present facilities and undertook renovation of some tourist resorts. It has completed the renovation project at the 17th century Mughal Gardens at Pinjore. There is a plan to set up an amusement park at Pinjore to increase the inflow of tourists to the complex. Haryana tourism has replaced the waterway supply line at Debchick resort at Hodel and a fast food centre has been set up. In view of its proximity to Delhi, Aravalli Gold Course at Faridabad is being given a new look by expanding trees and greens. At Magpie Resort, here room accommodation is being upgraded. The parking lot has also been renovated and a beauty parlour is on the proposed list here. At Pipli on the GT road the construction of a shopping arcade at Parakeet Resort is nearing completion. The old restaurant here is being converted into a conference hall and more shops are being constructed. New entries to fast food centre have been completed at Panipat and Kingfisher Resorts at Ambala. The total expenditure on renovation projects alone came to Rs 129.51 lakh. Haryana tourism is also taking up new projects at Jungle Babbler at
Dundahera, Surajkund Motel and Sultan Pur Bird Sanctuary. The total cost of these new expansions facilities will be around 157.07 lakh. The Mahar Singh Fort at Ballabgarh is being renovated and its is proposed to offer this valuable property to private entrepreneur for the setting up of Heritage Hotel. About four acres have already been acquired by Haryana tourism opposite the already popular Oasis Tourist Resort and the government proposes to launch a Ski Resort at this place under the scheme. Kalesar is the only natural Sal forest reserve of Haryana. It lies in the foothills of Shivalik and is ideal site for a hotel project. The government has acquired 30 acres for environment-friendly hotel and it is proposed to offer this site to the private sector under the joint venture scheme. |
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Petro dealers threaten to
stop work NEW DELHI, Sept 9 — The Federation of All-India Petroleum Dealers today threatened to stop supplies of petroleum products from October 6 if its demand for higher commission is not met. Petroleum dealers all over the country will stop lifting petroleum products from any company from that date, Federation President Ashok Badhwar said here. The 0.7 per cent commission given at present was inadequate to meet the expenses incurred by the dealers. This included payment to the staff and maintenance of establishment. The federation wanted that the commission should be hiked to at least 5 per cent. The dealers also wanted that they should be allowed to check the quality of products instead of the oil companies checking them at random. Officials of the oil companies checked samples at random and after some days simply informed the dealers that their products were not up to the prescribed quality. “We have no power to check the products” he added. The right to check the products must be given to the dealers by providing them the necessary instruments, he added.
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Internet to change
market scenario CHANDIGARH, Sept 9 — In the coming one or two years the scenario of the capital market is going to change drastically owing to the Internet revolution. Now even small investor, on account of Net trading, can get information about his company in detail , which otherwise was the facility which only big investor could get. Transaction costs due to direct contact of the customer with the manufacturer or the service provider have also come down substantially. Mr S.S. Sodhi, Executive Director, Delhi Stock Exchange, while speaking on the “Investor Education Programme” which was organised by UTI Institute of Capital Markets here, detailed the changes that the capital and secondary market today is going through. He said dematerialisation of shares has also increased a lot and more than 90 per cent of the transactions in the stock exchange are carried in D’-mat
form." Coming years will see tremendous change in the scenario and there might be even less than 10 stock exchanges world-wide”, he said adding that the reduction in the number of stock exchanges will only benefit the investor since he will get closer to the international market. Mr
B.B. Verma, Associate Professor, UTI while speaking on “Equity and debt investments” said additional public offerings (APOs) are better than the initial public offerings (IPOs) due to simpler pricing. “A company which is doing well is only most likely to offer a rights issue which places the APO(s on a better position than the IPOs”, he said. Though most experts advise the investor to opt for IPOs, which are safer as it is hardly 20 per cent of the applicants who get allotments ,but even then the investor has to be wise and go in for any company after being satisfied about it’s fundamentals. Mr A.N. Palwankar, Adviser, UTI-ICM advised the small and medium investors to go in for mutual funds since risk involved in this case is lesser. Others who spoke were Mr A.P. Kurian Chairman, Association of Mutual Funds of India, and Mr Kanu H. Doshi, Tax Consultant.
Rules for money changers NEW DELHI, Sept 9 — Money changers and Authorised dealers have been allowed to make payments otherwise than by crossed bank cheques and drafts. A notification to this effect has been issued by the Central Board of Direct Taxes. The notification amends rule 6DD of Income tax rules to provide that no disallowance under section 40A(3) of the Income-Tax Act be made where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers’ cheques in the normal course of his business. This is intended to remove hardship faced by money changers and authorised dealers who in the normal course of their business have to make payments otherwise than by crossed cheques or crossed bank drafts against purchase of foreign currency and travellers
cheques. |
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In the wonderland of investment Q: I reside in a company-leased accommodation, which is valued at 10 per cent of my salary+ allowances for IT. During the year, I received a special award for executing a job well. This is a one-time award only and was subjected to tax as income. Should this also be considered for perquisite valuation of leased accommodation? In that case the total tax payable on this award would be 30 per cent as direct IT plus 30 per cent of 10 per cent perquisite value = 33 per cent. Then there is 15 per cent surcharge on this taking the tax on the award to 37.95 per cent. This would be too hard on me. — Abbalaji@vsnl.com Ans:
I have good news for you. The award is treated as salary and taxed accordingly, since its nexus is your salary. However, for the purpose of determining the perk value of the rent-free accommodation, salary means the basic pay and includes DA if terms of employment so provide. It also includes commission based on a fixed percentage of turnover achieved by the employee as per terms of contract of employment. However, it excludes all other allowances and perks 117 ITR Gestetner Duplicators Pvt. Ltd. v CIT (1979) (SC). As per Explanation (ii) to rule 2A, salary received in arrears or in advance for periods other than the current year, as well as salary received for periods during which rental accommodation was not occupied during the current year are not to be taken into account for this exemption, even if these are taxed on receipt basis. I prefer objection to different definitions of salary for different purposes. It makes the ITA quite complicated. However, in your case, this has benefited you. Q: I had purchased a ready built house from Housing Board, Jaipur in 1996 and I am still paying instalments thereon. If I purchase a second house, with yet another loan, would I be eligible for tax deduction on interest upto Rs 1,00,000 and tax rebate upto Rs 20,000? If necessary, I am ready to stop taking the tax benefits on the first house. — R.P. Maheshwari, 4G8, Jawahar Nagar, Sri Ganganagar Ans:
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 is a different story riddled with a small confusion. 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 in 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 contention 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 constructing 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 two houses simultaneously with the same loan. Q: I am a retired army officer and get my pension regularly through a bank. Tax is deducted at source by the army accountant but no certificate is ever issued to me, in spite of repeated requests. My ITO refuses not only to take cognisance of this TDS but also the standard deduction I am entitled to. Please help. — Taxpayer, Mumbai Ans:
As per circular 761 dt 13.1.98, Sec. 203 bounds the tax deductor to issue TDS certificate in Form-16. In your case, it is the bank that deducts the tax. No employer-employee relationship need exist for this purpose. Further the tax deductor need not know the other income of the receiver of the pension. Make an application to the bank to solve your problem. Q: Through short term capital gains I have made the following profits. Rs 2836 (After Sept 15, 1999 and before Dec 15, 1999) Rs. 42615.40 (after Dec 15, 1999 and before Mar 15, 2000). I have paid an interest of Rs 3843 on March 22, 2000 towards housing loan. These are not covered in my Form 16 and my income falls in the 30 per cent bracket. Please let me know the tax that I should pay. —
Parasar(pvs@eth.net) Ans: There was a time when an assessee was required to pay advance tax on 15th of September, December and March even if he had earned capital gains on 28th of March of the relevant financial year. This was stupidity of nth order. FA 96 has taken corrective action. Accordingly, no interest would be charged in respect of any income, which was neither anticipated nor contemplated, received after the date of first or subsequent instalment of advance tax. However, it would be necessary to pay advance tax on such income at the next due date for advance tax. Tax of Rs 9,375 should have been paid on 15th March. Now you have to pay penalty @ 18 per cent for 3 months on this amount. Your ST gains would be added to your normal income for tax purposes. The interest can be claimed as deduction under income from house property. |
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by Praful R. Desai Comparative hardship Q:
Even if the eviction is sought for bona fide and reasonable requirement for personal use, has the court to consider the comparative hardship of the parties? Ans:
Bombay HC was dealing with this point in the case of Abdulraheman alias Iqbal v Sou. Kamalanben Mohanlal Shah (2000 (1) RCJ 561). The court observed that the case U/s 13(1) (g) of the Bombay Rent Act has been fully and properly established by the landlord. In that circumstances, before passing eviction order, the lower courts ought to have framed the issue U/s 13(2) and examine the comparative hardships of the landlord and the tenant. In other words, the HC said, even if the eviction is sought for construction and the tenancy is for the open land and if the landlord demands that construction is for the purpose of his personal use, though it appears that it has a trapping of S. 13(1) (i), the eviction sought really has to be considered U/s 13(1)(g). Consequently, S. 13(2) will come into play. In fact, this contention was raised in the appellate state on behalf of the tenant but the Lower Appellate Court has brushed aside saying that the eviction is sought for only U/s 13(1)(i). Concluding, the HC pointed out, even though landlord seeks eviction U/s 13(1)(i) and it has come out in the pleadings as well as in the evidence that the construction proposed to be done in the premises is for the purpose of his own use and occupation, then notwithstanding the claim by the landlord based on S. 13(1)(i), S. 13(2) will come into play and the court can pass a decree of eviction after establishing the reasonableness and bona fide of the landlord’s requirements only after considering the comparative hardship of the landlord and tenant as envisaged U/s 13(2) of the Act. With the result, the HC allowed the appeal.
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by A.K. Sachdeva Q: We are registered as a dealer under the provisions of the Punjab General Sales Tax Act, 1948 and the Central Sales Tax Act, 1956. During the assessment year 1995-96 we had sold, inter alia, goods worth Rs 50,000 in the course of inter-State trade or commerce to a Delhi based registered dealer and entries to this effect was duly made in the account books as well as the periodical sales tax returns. Central Sales Tax that became payable on this transaction was also deposited. However subsequently the buyer returned the consignment within a period of two months on the ground that the goods were not acceptable to him. The price of the goods as well as the amount of Central Sales Tax collected by us was refunded to the buyer immediately and necessary entries were made in the account books. In the sales tax returns we could not erroneously claim the deductions from the gross turnover. Now in the assessment proceedings we have claimed refund of the amount of Central Sales Tax to which the assessing authority does not agree on the ground that this claim ought to have been made in the relevant sales tax returns. Kindly advise if the assessing authority is right in its approach? — V.K. Sood Ans.
Section 8A of the Central Tax Act, 1956 lays down in plain terms, inter alia, in determining the turnover of a dealer for the purpose of this Act, the sale price of the goods returned to the dealer by the buyer of such goods within a period of six months from the date of delivery of the goods shall be deducted from the gross turnover. What the dealer claiming deductions under these provisions is required to do is to produce before the assessing authority satisfactory evidence of such return of good and of refund or adjustment in accounts of the sale price thereof. This statutory provision does not restrict a dealer for claiming deductions from the gross turnover simply because he has not made such a claim in the periodical sales tax returns. The dealer is at liberty to claim the benefit of refund of tax even after filing of the returns when the turnover is proposed to be determined by the assessing authority. Q: We are engaged in the business of manufacture and sale of machinery, its parts and other related equipments in Haryana being a registered dealer both under the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. During the year 1997-98 we contracted to supply certain machinery parts to U.P. based registered dealer and we agreed to send the goods to Uttar Pradesh for approval of the buyer. In fact these goods were to be used for the maintenance of the plant and machinery of the buyer. On approval, the buyer remitted the price on the aforesaid goods when 2 per cent amount of the total price was deducted on account of “Tax deduction at source ” under the provisions of the U.P. Trade Tax Act, 1948. Kindly advise as to how the amount deducted by the buyer can be got refunded from the sales tax authorities of U.P.? — Anil Chopra Ans:
From the facts stated by the queriest it cannot be disputed the transaction involving supply of goods from Haryana barely constituted a sale in the course of inter-State trade or commerce within the meaning of Section 3 (a) of the Central Sales Tax Act, 1956 on which tax liability under sub-section (1) of Section 9 could only be imposed in Haryana. This transaction did not give rise to any liability either under the provisions of the U.P. Trade Tax Act, 1948 or the Central Sales Tax Act, 1956 in the State of Uttar Pradesh. Therefore the deduction of 2 per cent “Tax deduction at source” is not legally justified. You can, therefore, claim refund of this amount either from the buyer if he has not so far paid over this amount to the State Government. If the amount stands already deposited by the buyer with the sales tax authorities of U.P. you can make an application for refund of this amount explaining these facts in detail to the effect that no tax liability on the supply of machinery parts from Haryana could legally fastened in that State. In support of this claim the queriest is advised to get a certificate of deduction from the
buyer.
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by Pushpa Girimaji Check document before buying old vehicle CAR financing might have brought down the market for used or second hand cars, but it has also made such cars — particularly luxury cars — highly affordable for those who would like to purchase them. Use of Compressed Natural Gas as alternate fuel for running a car has also made buying such big used cars that are otherwise petrol guzzlers, attractive. However, buying a used car is far more difficult than buying a new car because unless one is careful, one may well end up with a dud or a ‘lemon’ as they say in the United States. While buying used cars, one has an option of buying either from individuals or from used car dealers. Both have their advantages and disadvantages. Buying from an individual might be relatively cheaper, but usually in such deals, you have to take a quick or an immediate decision which might not always be the best decision. When you are buying from an individual, you are also buying on ‘as-is-where-is basis’ and if something were to go wrong, you cannot go back to the seller of the vehicle, unless of course he or she made certain claims about the vehicle that are untrue. On the other hand, if you are buying from a dealer, you are paying for his commission too, but if you have problems with the vehicle, then you know you can catch the dealer. Besides, if the dealer is willing to give you a warranty or a guarantee, that would certainly be to your advantage. In addition, a dealer might offer you a wider choice or you can perhaps give him your specifications and ask him to look for a car to suit your requirements. It will at least save you the hassle of running around looking for a suitable car. And if you are looking for finance, the dealer may even arrange it. However, here too one must be careful and choose a reliable dealer. In the United States, where an estimated 40 million used cars are bought every year at a cost of $ 366 billion, the Federal Trade Commission (FTC) enforces ‘Used Car Rule’ to protect the interests of buyers. The Rule, which covers all used car dealers in the country, requires for example, that the dealers post a one-page buyers’ guide or a disclosure document in every car to ensure that consumers get information in writing about any warranty protection that they have if there is a problem with the car after purchase. The guide becomes a part of the sales contract and overrides any contrary provisions contained in the sales contract. The guide also gives consumers certain important suggestions and warning including the need for asking the dealer to put any promises that he may make in writing. The FTC also issues ‘consumer alerts’ on how to be discerning while purchasing a used car. Unfortunately, we do not have any such specific safeguards for consumers in India, but a consumer can seek relief from consumer courts if the seller makes tall promises that turn out to be untrue or the dealer does not stick to his side of the deal as stipulated in the warranty, if any, or the sales contract. In fact in the case of Byford Leasing vs SVR Rao, the consumer courts upheld the complaint of the consumer that the car sold to him with a six-month warranty was not a re-conditioned car as promised and that despite repairs, it had not become roadworthy. The court asked the dealer to pay back the amount collected for the car, along with 12 per cent interest and Rs 10,000 as damages, besides costs amounting to Rs 1,500. The apex consumer court, the National Consumer Disputes Redressal Commission, which upheld this decision of the State Commission also awarded costs of Rs 5000 to the consumer. Coming back to the check-list for buying a second hand car, it is always better to take a qualified mechanic that you can trust for an inspection of the car. A good mechanic for example, will look at the year of manufacture and tell you whether the cars manufactured during that year were of good quality or had some defects. He can also tell you whether the price being quoted is fair. Check the vehicle’s registration certificate and insurance papers to find out about the car’s year of manufacture, owner’s name and address and any accident and damage caused to the vehicle. Make sure that the car is not a stolen one. And pay through a cheque and pay the entire amount only on registering the car in your name. It is always better to have a witness when you finalise a deal — take a friend along. Do not hesitate to ask questions about the car and note down the promises made at the time of purchase. And remember, you have to take a fresh insurance policy for the vehicle. |
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