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Air Sahara faces hefty penalty
Amritsar plans city for healthcare
Indian, Pakistani banks to set foot on each other’s soil
Nabard to aid rural artisans
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Aviation Notes
Investor guidance
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Air Sahara faces hefty penalty
Mumbai, October 15 According to sources in the Airports Authority of India (AAI), more than Rs 1 crore have been spent on pulling the aircraft out of the muck. More than 200 employees belonging to private contractors, the Indian Railways and Air-India were deployed in this operation, officials said. The AAI had to hire equipment from the Indian Railways, including steel plates and railway sleepers to extricate the aircraft, sources said. Meanwhile senior AAI officials said fines to the tune of several crore rupees would be levied against Air Sahara for the losses caused to other airlines. Most airline schedules were affected for four days and often aircraft were forced to circle over Mumbai for several hours burning expensive aviation fuel. The flight from Kolkata overshot the runway at the Mumbai airport on October 9 — an incident that AAI in its preliminary report said was “purely due to the mistake of the pilot of the aircraft.” The Directorate General of Civil Aviation has initiated an inquiry into the entire episode. “The aircraft was maintaining higher speed, it was unable to maintain the normal decent profile for a safe landing...speed combined with higher altitude...could not touch down at the designated landing point,” the sources said. So far the AAI has tabulated total losses at Rs 75,000 per hour or Rs 11.25 crore for 82 hours. About 500 flights were delayed and more than 1 lakh passengers affected. Meanwhile, the Air Passengers Association of India (APAI) in Chennai alleged that negligence on the part of pilots of the airline had led to the mishap. It also charged the airline with following an ‘outdated’ Standard Operating Procedure (SOP) and expressed surprise at the way DGCA, which carries out safety audits of all airlines each year, had been giving clean chit to Air Sahara.
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Amritsar plans city for healthcare
Amritsar, October 15 He said the government had already prepared a project report and it was forwarded to the Central Government for approval. He said this mega healthcare project would solicit NRI investment to the city and would provide world-class healthcare facilities. Mr Singla informed that the state government had drawn up several development projects with private and public participation. He said the next important venture would be to set up the special economic zone (SEZ). He informed that the Prime Minister had announced to set up a 1,200 MW power project by NTPC at Gurdaspur recently. He said the government would play the role of a facilitator and would encourage private investments even in the areas of power generation, roads and real estate.
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Indian, Pakistani banks to set foot
Islamabad, October 15 Two Pakistani commercial banks, Bank Alfalah and National Bank of Pakistan, are setting up their branches in India, while two Indian banks — State Bank of India and Bank of India — are opening their branches in Pakistan on a reciprocal basis, officials here said. The banks are expected to start operations by December. The decision to open commercial banks in each other’s country was taken recently when the State Bank of Pakistan Governor, Dr Ishrat Husain, visited Mumbai and held a meeting with his counterpart and senior commercial bankers. Teams of the bankers from India and Pakistan are
expected to visit each other’s country to finalise arrangements for setting up mutual banking relations by the end of 2005, the officials were quoted as saying by daily, The Dawn.
— PTI
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Nabard to aid rural artisans
Chandigarh, October 15 "In addition to Punjab and Haryana, we are implementing this project in eight other states as well on a pilot basis.” Mr Devinder Dutta, Assistant General Manager, Nabard, said the bank would provide a grant of Rs 90,000 for opening outlets at tehsil, block and village level, while Rs 1.45 lakh will be provided for those opening outlets at district level.
— PTI
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AAI blames staff shortage for delay after Sahara mishap by K.R. Wadhwaney The woes of Indian civil aviation will continue to surface in troubled skies as long as the Airports Authority of India (AAI) is unable to improve its functioning. The AAI has a huge balance, collected from users of airports, in its kitty. But, sadly, it refuses to spend money on important projects to strengthen the general health of airports, most of which are unfortunately decaying. It is simply shocking that, in the 21st century, it should have taken the AAI 72 hours to tow away Air Sahara aircraft lying in ‘kutcha’. The closure of the main runway at the Mumbai airport led to a virtual closure of the airport because subsidiary runway was inadequate for wide-bodied aircraft to land or take-off. Several flights had to be diverted causing insurmountable inconvenience. To avoid facing widespread criticism from different quarters, the AAI threw blame on paucity of the air traffic controllers (ATCs). Instead, there is an acute shortage of ATCs. But what had the ATCs to do when the airport was closed for operations? The truth of the matter is that the AAI does not possess the requisite equipment to tow away the aircraft lying on ‘soft ground’. Indigent methods had to be employed to strengthen the ‘kutcha strip’ with wooden planks and iron rods to firm up the ground for the aircraft to roll back. Luckily, the aircraft escaped disaster. But the accident has given rise to several questions. Most of the airlines, particularly private operators, are devoid of the required equipment. The status of the AAI is no better. The no-frills airlines do not even have competent crew to evacuate passengers in double quick time when an emergency occurs. After all, accidents take place suddenly. If such an eventuality takes place on most of airports, there will be a virtual chaos. The improvement of general health of airports is, therefore, most vital. Merger talk
The Minister of State for Civil Aviation Praful Patel has again hinted at the ‘merger’ of two national carriers, Air-India and Indian Airlines. Time and again this exercise has proved futile and crores of rupees have already been sunk on this proposal. The bulky files are lying buried in the Rajiv Bhavan. The synergy is possible only when there is a proper route planning and adherence to it. Mere talks will not help. Actions will. Politicians have to give officials free hand to do so. There is absolutely no need, whatsoever, in appointing a consultant from outside to bring about synergy. The synergy operational plans are lying in files. The need of the hour is to implement then instead of spending a sizable amount on the appointment of consultant. Aviation analysts are of firm view that the ministry should ‘look inwards in two national carriers’ instead of throwing away money on ‘outside agencies’.
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Joint holders cannot open two PO savings accounts
by A.N. Shanbhag Q: I am a retired senior citizen. I am placed in peculiar situation described as follows. My wife and I are individual investors in post office monthly income scheme (MIS) since nearly three years. We have our investment pattern as follows. MIS deposit joint account A. First holder -Myself Second holder -My wife B. First holder -My wife Second holder -Myself Corresponding joint saving account A. First holder -Myself Second holder -My wife B. First holder -My wife Second holder -Myself My wife and I have invested from our individual finances. We both are individual taxpayers and filling separate income tax returns and have our individual PAN. Now the post office is creating a problem after three years of opening the account. They say that my wife and I cannot have separate saving account and that one of the saving account will have to be closed. The MIS interest of the closed saving account will be deposited into the continuing saving account. Further Post Office says that unless I comply with this, no interest will be allowed to be drawn from the saving accounts. Also the post office has scribed some remarks, to this effect into our respective saving account pass books. This sounds ridiculous. How can a post office club two individuals and force to close one of the saving accounts? Is there any such rule? If there is, why, three years ago, did the post office open two separate saving accounts? — Rajni Ochhavlal Parikh A: The PO rules do not allow two joint holders to open two savings accounts in the same post office, even if the order is different. You can transfer the interest of both your MIS to one savings account. Since the interest of the PO savings bank is exempt from income tax, there is no need to split the interest in your tax returns. You can show the interest earned from your MIS accounts in your individual returns. Last, but not the least, complying with this rule will not have any adverse bearing on you financially or otherwise. HUF accounts circular Q: I opened an HUF account in post office under MIS on February 1, 2005. The government has directed to close all HUF account by December 31, 2005. Please clarify this account opened, as HUF prior to May 13, 2005, will also be required to close or not. Please confirm whether the amount, invested after May 13, which I am supposed to withdraw, can be invested in 8 per cent taxable bonds of RBI, SBI etc. in HUF category. —
R.K. Jain A: As per our understanding, there is no circular that has directed closure of all HUF account by December 31, 2005. According to notifications issued on May 19, 2005, there were six schemes of the post office where fresh investments from persons other than individuals would not be allowed after May 13, 2005. If such investments are made after May 13, 2005, the same would be treated void ab initio and such deposits would be closed and the money refunded to the depositors without any interest. However, Government of India, Ministry of Finance, as per letter F.No.2/8/2005-NS-II dated May 20, 2005, have, clarified that the above amendments are not applicable to existing accounts i.e. accounts opened prior to May 13, 2005. These shall continue till maturity and deposits, withdrawals in/from these accounts shall be allowed to be made in accordance with the said rules. Therefore, you need not withdraw the account opened in the name of HUF in the post office MIS scheme. Even if you do, you are free to invest the same in RBI bonds.
Dividend stripping Q: I have invested Rs 1 lakh in an equity fund nearly five months ago. I got approximately 30,000 as dividend. Then I sold the units after approx three months from purchase and got approx 85,000. Please tell what should me my tax liability (dividend is tax free)? — Sunil Sahni, Jaipur A: In your query you mention that “you have invested Rs 1 lakh in an equity fund nearly five months before.” At the same time you also mention that “then I sold the units after approx three months from purchase & got approx 85,000.” These two statements contradict each other. In any case, the law relating to dividend stripping is as follows: The modified Section 94(7) has been made effective from April 1, 2004. This means that the provision will be applicable whenever a person sells shares or units after this date and the following four conditions are simultaneously satisfied — 1. The purchase has been within three months before the record date, 2. The sale has been within three months in the case of shares and nine months in the case of units, after the record date 3. The dividend is tax-free and 4. The sale results in a loss (naturally, short-term). In that case, the loss arising on the sale to the extent it does not exceed the exempt income has to be ignored. In your case if the dividend was paid more than three months after the date of purchase the section does not apply to you and you can setoff the short-term capital loss of Rs 15,000 against any capital gains that you earn during the FY. If you have no capital gains you may carry forward the loss. If the record date of the dividend was within three months of the purchase. You will not be allowed to carry forward the loss of Rs. 15,000 incurred by you. There is no tax liability to you for this transaction.
Benami transaction Q: I have purchased a plot in the name of my wife for which I have paid all money as she has no income being a housewife. Now I want to build a house on said plot by taking a home loan of Rs 15 lakh. I am a government servant. Kindly guide as the plot is in the name of my wife for which I have paid all money in the past & will be paying in future also. How can I get income tax rebate for the home loan to be taken in near future. — Ashok Tarwani, Nagpur A: Since the land belongs to her, you will not be able to claim any benefit on housing finance, unless the land is transferred to you. Purchasing a house (or land) in the name of the wife by applying your own funds means that you are using her as a name-lender and this is a ‘benami transaction’. This is illegal. The transaction can be made legal by transferring the land in your name but this will involve stamp duty and registration charges.
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