B U S I N E S S

Property prices in Holy City skyrocket
A great variation exists in the prevailing properties prices of commercial and residential in the city. The rates in commercial areas have shown an alarming increase whereas the residential localities are witnessing a constant rate for the last several years.

PREPARING FOR RETIREMENT
Aviva offers Lifebond
Ludhiana
Rising inflation and decreasing interest rates are the worst combination desirable for a person whose income has been curtailed owing to retirement. Unfortunately both these things are happening in the Indian financial sector making post-retirement planning or managing funds for a comfortable retirement tougher than ever before.

Inflation falls to 3.15 pc
New Delhi, December 22
A near 10 per cent fall in the price of vegetables coupled with substantial slide in diesel and petrol prices, pushed inflation down to 3.15 per cent for the second consecutive week ending December 7.

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Lawyers’ strike: clients can seek damages
When resorted to on rare occasions, strikes and agitations can drive home a point effectively. But when they become frequent and commonplace and cause immense hardship to those affected by suspension of services, strikers lose public support and sympathy.

Insipid volumes signal correction is ahead
In the absence of any triggers, the market ended flat last Friday with a marginal loss of 5.75 points from the previous week’s close. Nevertheless, it was volatile-intra-week. The market opened firmly last week on the back of a landslide victory of the BJP in the Gujarat assembly elections. 

• HDFC Bank

• Dr Reddy’s Labs

• Hind Lever

• Coming fortnight

TAX & YOU

Tax problem

Property prices in Holy City skyrocket
Pawan Kumar & Neeraj Bagga

A great variation exists in the prevailing properties prices of commercial and residential in the city. The rates in commercial areas have shown an alarming increase whereas the residential localities are witnessing a constant rate for the last several years.

Commercial hub of the holy city is largely located in the walled city. It involves Katra Jaimal Singh, Amar Talki Chowk, Hall Bazar, Shastri Market, Guru Bazar etc. These areas have been fulfilling the demand of its residents since decades. The prices there depend on the location of shop and building and go up to crores. Baldev Singh a property dealer of the area said that there were no set rates in these areas and everything depends upon the location of shop or building, which could solve the purpose of running the business well. But in the residential areas it oscillates between Rs 6,000 to Rs 8,000 per square yard, whereas in commercial areas it started from Rs 20,000 per square yard and could go much higher as it depends on location.

However, a new trend of shopping complexes being built outside the city have started coming up and it had now taken momentum. These plazas are generally located near the civil area. Not only the local government authorities but also several private entrepreneurs have started investing money in it. The local improvement trust has constructed two commercial complexes so far with the availability of parking facilities too. Close to the heel a number of private complexes have also been erected. These types of plazas are mainly located on Lawrence Road and Mall Road. The novel idea has fast caught up the fancy of the resident.

Mr Rajesh Bhalla a property consultant in the area said that it was obvious that the trend would certainly change. As the traditional markets in the walled city had no parking facility. Moreover, the roads were narrow and vehicles could hardly move without hindrance. The long jams had marred the shopping craze. Whereas the new shopping complexes were located on wide roads and vehicles could be passed easily.

According to the rate list circulated by the district authorities the price of residential areas inside walled city near commercial markets go upto 8,800 per square yard (PSY) while the commercial sites itself goes to Rs 19,800 PSY. The difference of price between commercial and residential varies from minimum Rs 4,000 to maximum 10,000. But there is a sharp difference between the rates specified by the authorities and the rates in reality charged by the people.

The specified rates of the authorities in inside walled city are as follows Bagh Ramanand Rs 3,300 PSY residential and Rs 9,350 commercial, Bombaywala Khuh, Bhagtanwala to Lahori Gate, Chowk Parag Dass, Chowk Lachhmansar, Chowk Chattiwind Gate, Chowk Chinpourni, inside Hathi Gate, inside Beri Gate, Mahan Singh Gate, Sheraanwala Gate, Misri Bazar, Katra Bhai Sant Singh Rs 4,400 for residential and Rs 11,000 for commercial PSY. Gate Hakima, Gate Khazana, Mohalla Balmiki and Katra Khazana at Rs 2750 for residential and Rs 11,000 for commercial.

Meanwhile, in the urban localities rates are as follows Rani Ka Bagh and Railway Station Rs 6,600 for residential and 16,500 for commercial PSY. Hukam Singh Road, Kot Atma Singh, Shivala Bhaiyan and Tilak Nagar have rates of Rs 5,500 for residential and Rs 16,500 for commercial PSY. While Court Road, Lawrence Road and Mall Road have rates of Rs 7700 for residential and 22,000 for commercial PSY. Similarly, Taylor Road and Queen’s Road have Rs 7700 and Rs 19,800 PSY for residential and commercial areas. Kashmir avenue, Jammu Wali Road, Krishna Square, CMO Office, Golden Avenue and Vijay Nagar Rs 5,500 for residential and Rs 16,500 for commercial sites PSY.

A new trend is being witnessed in the city as more and more people are opting for living in open places, who are free of constraints of narrow lanes and free of traffic hazards and din and noise of inner city. Addition to this people living in villages near the city had settled down here for the better prospect of education and livelihood, confided Mr Rajesh Bhalla a real Estate Consultant. He said obviously the rates in the residential areas were still and had not experienced any considerable change for quite some time. Moreover, the price of land depends upon its location whether it was in civil areas or somewhere else. The price in civil area was much higher than other part, he added.

But this trend is further paving the way for mushrooming of illegal colonies. Confirming this Ms Gurpreet Sapra Deputy Director Local Bodies-cum-Estate Officer PUDA said that a number of illegal colonies had sprung up and the cases were pending with the court.

On the other hand the improvement trust is initiating some schemes to fulfil the increasing demand of people. Mr J.S. Panther, Superintendent Engineer of the Trust said that in this scheme there were around 17,000 plots of measurement varying from 150 to 250 square yard. He said they received round about 8,000 forms in favour of these plots. All the plots had been sold from prices vary from Rs 2,500 to 3,750 per square yard, confided he. He said that after this successful venture the trust was contemplating another scheme of this kind. 

PREPARING FOR RETIREMENT
Aviva offers Lifebond
Naveen S. Garewal

Ludhiana
Rising inflation and decreasing interest rates are the worst combination desirable for a person whose income has been curtailed owing to retirement. Unfortunately both these things are happening in the Indian financial sector making post-retirement planning or managing funds for a comfortable retirement tougher than ever before. One way to counter the situation is to place funds where they not only provide a scope for growth, but also provide security.

Growth oriented funds linked with a life insurance covers are best suited for a person who is in the process of planning a safe and financially secure retirement. About a dozen companies have entered the insurance business providing flexibility to the way insurance linked investment business is conducted in the country today. Aviva Life Insurance, a joint venture between Dabur and CGU, a wholly-owned subsidiary of Aviva of the UK has launched a single premium investment bond called the Lifebond that is designed by Aviva to provide maximum benefit of investment return and the security of the investment to match your medium term savings needs.

Growth-cum-cover

The aim of the lifebond is to provide growth on lumpsum investment, guarantee that the selling price of units never fail to provide some profit, provide you a lumpsum fund when any need arises in future, offer flexibility of making additional lump sum investments through additional premiums and to provide an opportunity to increase your tax efficient savings. The lifebond comes with a twin option — unit-linked and unitised with profits. The Aviva Insurance has also introduced an inflation indexation’ product wherein the insured will be able to hike the sum assured to the extent of inflation reflected in the wholesale price index.

Single premium investment

Aviva Lifebond as the company puts it is a single premium investment plan and best suited to individuals seeking an investment plan coupled with an insurance cover. The features of the plan include growth on a lumpsum investment, two investment fund option; With Profit Fund and Unit Linked Fund or flexibility to invest in both options through a combination of two polices, the policy can be taken on single life as well as on joint life (with spouse only). The policy also offers an option to make additional lumpsum investments through additional premiums.

Offers option to surrender

The benefit includes full sum assured plus accrued bonus and is generally payable to the nominee on death of policy holder. The policy can also be surrendered in case of a ‘with profits policy’. On death lumpsum of 101 per cent of the value of initial single premium units in the account is promised to be paid without deduction of any surrender penalty.

Loan option available

This endowment policy offers a facility for loan for house as well as other loans. The policy can be taken for a minimum sum insured of Rs 25,000 while there is no maximum. The minimum age of entry is one year while the maximum is 65 years.

The company offers three products: LifeLong — a whole life flexible protection plan, LifeSaver — a regular premium endowment savings plan and EasyLife, is a simple endowment produced.

Aviva is the world’s oldest insurance group and is the seventh largest insurer worldwide with 25 million customers in over 50 countries. The company has already appointed about 700 agents and plans to increase it to 1500 next year and 2500 in the third year.

Inflation falls to 3.15 pc

New Delhi, December 22
A near 10 per cent fall in the price of vegetables coupled with substantial slide in diesel and petrol prices, pushed inflation down to 3.15 per cent for the second consecutive week ending December 7.

The point-to-point price change, as measured by Wholesale Price Index (WPI), declined from 3.40 per cent in the previous week and 2.27 per cent in the year-ago period. PTI

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by Pushpa Girimaji

Lawyers’ strike: clients can seek damages

When resorted to on rare occasions, strikes and agitations can drive home a point effectively. But when they become frequent and commonplace and cause immense hardship to those affected by suspension of services, strikers lose public support and sympathy.

In fact frequent agitations by service providers can invite public ire and that’s when strikes actually become counterproductive. This is what happened with bank employees and today, lawyers have landed themselves in a similar situation.

The Supreme Court’s judgement holding that lawyers have no right to strike, only reflects public sentiments in general and the anger and frustration of litigants in particular. In fact the warning bells were rung last October, when the apex consumer court came down heavily on strikes by lawyers and said no consumer court should allow an adjournment on the ground that the lawyer is on strike.

Expressing its displeasure at frequent strikes by lawyers, the commission said: “...we have to guard against this pernicious practice of strike by lawyers spreading to the Fora under the Act...”.

Similar sentiments were expressed by the Supreme Court last Tuesday when it said “courts are under no obligation to adjourn matters because lawyers are on strike. It is the duty of all courts to go on with matters on their boards even in the absence of lawyers”.

The apex court also minced no words when it expressed its disapproval of strikes by advocates: “unfortunately strikes and boycott calls are becoming a frequent spectacle and even unruly and an unbecoming conduct. On the slightest pretext, strikes are resorted to. The judicial system is being held to ransom. Administration of law and justice is threatened and rule of law is undermined”.

This should serve as a warning to all those who resort to strikes frequently, without a thought to those who suffer on account of disruption in services. In fact, if one were to look at the cases filed before consumer courts, one sees an obvious change in the attitude of the consumers and courts, too, to strikes and agitations.

When Bank of Baroda, for example, suspended its operations due to a prolonged strike lasting 54 days, causing immense hardship to the depositors, the Consumer Unity and Trust Society, Jaipur, sought compensation from the bank to all its depositors. The National Consumer Disputes Redressal Commission, however, said the management could not be held liable for the illegal strike resorted to by employees. Besides, the employees had physically prevented the bank from catering to even the urgent needs of some customers and had even gone to the extent of defacing and mutilating the cheques issued by the bank. The Supreme Court, too, concurred with this view of the commission.

Subsequently, following disruption in service provided by Air India on account of a strike by the Indian Flight Engineers Association, the Common Cause filed a case before the national commission. Here, in addition to the union of India and Air India, it named the flight engineers’ association as one of the respondents. And this time, the national commission drew a distinction between legal and illegal agitations and said where strikes were legally launched in conformity with the provisions of the law governing industrial and labour relations, no proceedings could be instituted under the Consumer Protection (CP) Act against the employees.

However, where strikes were illegal, managements would not be held liable, but the trade unions would be. Here the commission dismissed the contention of the association that they had no contractual obligation in law towards passengers. It also disagreed with their argument that proceedings against the association under the CP Act were barred under Section 18 of the Trade Union Act, 1926.

Administering a strong word of caution, the commission said in case of similar instances of disruption of service caused by illegal strikes or agitations, it would have no hesitation to award proper compensation to the affected consumers.

More recently, referring to strikes by lawyers , the commission made it clear that clients who were affected by lawyers’ non-appearance before consumer courts could seek damages for any loss or injury caused. The CP Act provides for compensation against deficient services and the commission said the absence of a lawyer in a court or a tribunal or any authority, after accepting a brief will constitute deficiency in service for which the client or the consumer can haul up the advocate before the consumer court. And this will also apply to non-appearance of lawyers on account of strikes too.

Now the five-judge Constitution Bench of the Supreme Court has reinforced this further by saying that lawyers would be personally liable to pay costs to the court in addition to damages to the litigant for any suffering caused on account of such strikes. It has also made it clear that a lawyer who has accepted a brief cannot refuse to attend the court even in pursuance of a call for strike by the Bar Association. 

MARKET UPDATE

Insipid volumes signal correction is ahead
Lalit Batra

In the absence of any triggers, the market ended flat last Friday with a marginal loss of 5.75 points from the previous week’s close. Nevertheless, it was volatile-intra-week. The market opened firmly last week on the back of a landslide victory of the BJP in the Gujarat assembly elections. Profit booking on the last two trading days saw market erase the gains made during the earlier part of the week. Banking and pharma stocks were the major gainers during the week.

HDFC Bank

HDFC Bank, the leading private sector bank, which was left out of the current rally in the banking stocks finally showed its mettle by gaining 17.3 per cent in the last seven trading sessions to close at Rs 221.15. The reason for its late rally seems to be the fact that the introduction of the Securitisation Bill has created the right environment for the lending business as a whole.

HDFC Bank, which hitherto has been concentrating largely on AAA rated corporates, can now spread its wings to other smaller and mid-sized corporates. Quality management and continuous growth has ensured that the stock enjoys high discounting on the bourses. Strong denials by the bank’s management of a possible merger with HDFC has also allayed the concern dogging the stock for a couple of months.

Dr Reddy’s Labs

A favourable ruling in a US court against Pfizer helped Dr Reddy gain over 11 per cent during the week to close at Rs 893. Pfizer had filed a complaint in a New Jersey court restraining Dr Reddy from launching the amlodipine maleate product in the US market. Dr Reddy is likely to launch the product in the middle of next year.

Ranbaxy also gained ground after a breakthrough in its R&D programme relating to a product of NDDS (new drug delivery system) product. Ranbaxy, according to some analysts, has still some room for appreciation in the light of new developments.

Hind Lever

Hindustan Lever Limited (HLL) gained 1.6 per cent to close the week at Rs 182.85. Value buying on the expectation of a cyclical recovery in HLL by the end of the current financial year seems to have fuelled the rise. Marketmen see strong industrial recovery and market-share stability, and easy base comparisons will reflect on revenue growth. Moreover, as all the negatives have been priced into the stock, and any recovery would lead to a 15-20 per cent jump in the stock price. Hence investors should keep a close eye on the movement of the stock.

Coming fortnight

The Sensex is showing a short-term weakness. The lower weekly close indicates weakness in the market. Next week should hopefully see a correction with most large cap stocks including Reliance Industries, HLL, Satyam and Infosys losing ground. The index is likely to test 3320. In case this is broken the fall will accelerate. Volumes have slipped recently drying up the buying pressure. Even a small quantum of selling could lead to a tailspin in prices. We can expect a possible bottom by the end of next week.

TAX & YOU

by R.N. Lokhotia

Tax problem

Q: Kindly advise me on the following Income Tax problems:-

1. Rs 55600/- has been received by me on the maturity of the Fixed Deposits which were in the name of my father. My father has been expired in 1999. Whether any part of this amount is taxable so far as my Income is concerned?

2. I have received Rs one lakh as share of my father on account of sale of shop which was in the name of my father and my uncle jointly. The shop was purchased in 1986 for Rs 1,52,000/- and payments were made in instalments upto 1990. Kindly advise whether any part of this amount is taxable or not?

— N.D. Rattan, Patiala

Ans: Only interest on bank fixed deposit after the death of your father upto maturity would be taxable in your hands. There is no income-tax on maturity would be taxable in your hands. There is no income-tax on maturity proceeds of a fixed deposit. On the sale of a shop owned in your father’s name but now held in your name, the capital gains would be calculated as if he was owner of the property. However, after applying the concept of cost inflation index the long-term capital gains would be nil.

Gift transaction

Q: Under the existing rules no income tax is to be paid by the donor or donee in the case of gift transaction. There is no maximum limit also. Kindly guide:

1) What are the documentary proofs to be completed/ exchanged by the Donor or Donee.

2) Whether such transactions are required to be shown in the Income Tax return by Donor or Donee.

— Shamsher Singh, Mohali

Ans: The documentary proof for a Gift transaction is to obtain a Gift-letter to be issued by the donor. However, it is not compulsory to issue gift-confirmation on a stamp paper as even a mere letter from the donor would be sufficient evidence in respect of making of a gift. The donee should sign the second copy of the Gift-letter by way of acceptance of the gift. The gift transactions are not required to be shown in the Income-tax return by the Donor or the Donee. However, it is always better to enclose with the Income-tax return a copy of the Gift deed/letter.

Form 15 H

Q: I am a pensioner and have following income for financial year 2002-2003.

1. Pension                       76,000

2. Interest on deposits      76,900

3. NSS payment               29,000

TOTAL                            1,81,900

I will invest

1. LIC pension 10,000

2. PPF, LIC Bonds 80,000

Income Tax payable is NIL

Please advise me if I can give 15H Form to bank and 15E to Post Office.

— Inderjit Nanda, Khanna

Ans: For the financial year 2002-03 you cannot give Form 15H, etc. to the bank for non-deduction of income-tax on bank interest because your gross income in excess of Rs 50,000.