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Raha terrific CEO, but ONGC faulty, Mani tells PM
CII unhappy with power sector
POSCO to invest Rs 16,000 cr in first phase
US court ruling may hit Ranbaxy shares
Exemption ceiling on tuition fee deleted
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Market may test new highs
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Raha terrific CEO, but ONGC faulty, Mani tells PM
New Delhi, December 18 Mr Aiyar is understood to have told the Energy Coordination Committee, headed by the Prime Minister, on December 16 that the ONGC had a “very poor” track record in finding new oil and gas fields in India and had neglected exploration and production — its core competence — for its downstream refining, power and petrochemical projects, sources said. His eight-minute presentation on domestic oil production scenario focussed mainly on ONGC’s failure to put the riches it reaped because of a sharp rise in international oil prices in E&P. The ONGC, he said, was signing MoUs with state governments for power and petrochemical projects but was refusing to sign a performance MoU with the Petroleum Ministry. Rather than investing in finding oil under the Deccan Plateau, which Mr Aiyar claimed to have more oil than the Gulf, the ONGC was concentrating on acquiring oil properties abroad. Sources said when Finance Minister P. Chidambaram pointed that Mr Aiyar’s views on the ONGC were a reflection of his media spat with company Chairman Raha, the Petroleum Minister emphatically stated that Raha was a terrific CEO and he had no issues with him. Mr Aiyar asserted he was only raising fundamental issues concerning India’s energy security. Mr Chidambaram said India’s energy security issues would be served as long as the ONGC got the set quantity of oil either from its domestic fields or its overseas assets and wanted foreign firms to explore the Deccan plateau rather than a company with a “poor track” record. Sources said Mr Chidambaram disapproved of the ONGC being asked to explore the Deccan Plateau, saying that as per Mr Aiyar’s own assertion, the company had a very poor track record and this amounted to putting good money behind bad money. If sources are to be believed, the Prime Minister asked the Petroleum Ministry to put down its views on the ONGC’s performance and the company’s response and make a presentation to the ECC at a future date. Mr Raha has stated that the ONGC’s integration plans, which involve forays into LNG imports, petrochemical plants and power projects, had no bearing and impact on its E&P spending. Of the Rs 12,251 crore being invested in E&P in 2005-06, one third is going into exploration — finding new fields — and the remaining two-thirds into production — putting new fields on production and increasing production from existing ones. Mr Raha had said that of the Rs 75,339.87 crore capex planned for the 10th Five Year Plan period (2002-2007), Rs 47,951.72 crore (64 per cent) was in the domestic oil hunt, Rs 24,968.33 crore (33 per cent) in overseas asset acquisition, and only Rs 2,419.82 crore (3 per cent) would go into integration projects.
— PTI
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CII unhappy with power sector
New Delhi, December 18 “The constitution of the Energy Coordination Committee headed by the Prime Minister and the Energy Implementation Committee headed by the Cabinet Secretary has been a remarkable achievement,” CII said. The setting up of the ECC and the EIC would help the energy sector work in cohesion and resolve issues amicably and within noticeable timeframes, it added. The industry chamber expressed concern over the not-so-good performance of the power sector as compared to telecom, information technology, services, retail and biotechnology. India is facing a shortage of fuels such as coal and gas. Almost 2,000 MW of power capacity in the country involving investments of Rs 8,000 crore is at cross-roads due to the unavailability of gas. The industry chamber welcomed some of the amendments to Electricity Act, 2003, particularly related to captive power generation and giving more authority to law-enforcing agencies to curb power theft. The chamber said it was essential to curb the commercial losses of Rs 28,000 crore incurred by the state electricity boards every year in order to turn the sector around. A single agency was required to ensure coordinated, synergetic growth in the power sector, it said.
— PTI
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POSCO to invest Rs 16,000 cr in first phase
New Delhi, December 18 The Board of Directors of POSCO met at Seoul and declared that POSCO-India’s proposed 12 MTPA integrated steel plant at Paradeep in Orissa would be constructed in three phases . The capacity of the plant in phase-I would be 4 MTPA as against 3 MTPA, which was originally mentioned in the memorandum of understanding (MoU) signed with the Government of Orissa on June 22, 2005. However, the total capacity of the fully integrated steel plant would remain at 12 MTPA, said an official of POSCO India.
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US court ruling may hit Ranbaxy shares
New Delhi, December 18 Earlier, a UK High Court had given a ruling in October directing the company to delay an early launch of a generic drug atorvastain in the British market, a competing drug for Pfizer’s Lipitor. Ranbaxy shares, which closed at Rs 390.25 on the BSE on Friday, are down by 38 per cent in 2005, underperforming the 41 per cent jump in the BSE index in the same period. The stock is trading lower than its 52-week high of Rs 1,300. Ranbaxy President Malvinder
Singh, however, said the ruling would have no impact on the company’s business plans. He said: “we will press our case in the U.S. Court of Appeals for the Federal Circuit.” But market analysts feared that Ranbaxy shares would further fall on Monday after the adverse ruling though Pfizer’s victory lifted its shares by 10 per cent in New York on Friday. Ranbaxy’s generic alternative had threatened Pfizer’s largest source of revenue — $12 billion a year. It is another matter that even in the best case, the generic drug would not have been hit the market before 2008 because of all the appeals, they added.
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by S.C. Vasudeva Exemption ceiling on tuition fee deleted
Q.1 What are various deductions of exempt amount of Rs 1,00,000/-? In the Assessment Year 2005-06, two children Rs.12,000/- each i.e. total Rs.24,000/- tuition fees for education excluding, development/capitation fees is exempted. In the assessment year 2006-07, what is the amount of exemption of tuition fees for education, excluding development/ capitation fees for two children. Moreover, in the assessment year 2005-06, if the wife is in Govt service, she can also exempt the balance amount above Rs 12,000/- per child i.e. Rs 24,000/- for two children tuition fees for education, excluding development/ capitation. In the assessment year 2006-07, she can also exempt the amount up to the limit.
Ashok Gupta, Ludhiana A.1 The deductions available under section 80C of the Income Tax Act, 1961 (The Act) are similar to those which were covered under section 88 of the Act. It is not possible to list all deductions that are covered under section 80C of the Act. However, even in assessment year 2006-07, a deduction can be claimed in respect of tuition fees paid to any university, college, school or educational institution situated within India. Further, the ceiling of Rs 12,000 per child has been deleted and accordingly, you can claim any amount paid as tuition fees as a deduction from your total income subject to the overall limit of Rs.1,00,000/-. Your wife would also be eligible for the deduction if the tuition fees is paid by her.
Section 80C puts no ceiling on PPF Q.2 Kindly give the below information regarding the assessment year 2006-07. (i) Interest earned on previous NSC was to be added in the total income and deduct the same as deduction in the assessment year 2005-06. Please clarify the latest procedure. (ii) How much maximum amount saved in VPF and PPF under Section 80C. Is it Rs 1 lakh or 70,000/- + 30,000/- in infrastructure bonds. K.K. Karmaker, Patiala A.2 (i) The taxability of interest on NSC stands changed for the assessment year 2006-07. For the said assessment year, the interest earned on NSCs would be added to the total income and as such interest is deemed to be reinvested, it would qualify for deduction under Section 80C of the Act. However, in view of the deletion of Section 80L of the Act, you would not be eligible for any deduction on account of the interest due on NSC for the relevant year. (ii) Section 80C of the Act does not place any restriction on the amount to be invested in VPF and PPF. The said section only provides for a maximum limit of Rs 1 lakh. The amount of deposit that can be made in the PPF account is governed by the PPF Rules which provide that the maximum amount that can be invested in one year cannot exceed Rs.70,000/-.
Deduction allowed under Section 80 U Q.3 I am physically handicapped person having 60% disability. I am working in a Punjab Govt Department. As such, I have been claiming rebate/exemption under Section 80U of the IT Act for the past so many years as is admissible under Section 80U. But this year due to the introduction of a Section 80C, my DDO is refusing to give me this rebate or exemption as provided under Section 80U of the IT Act on the plea that all such rebate/exemptions has been included/merged in the new Section 80C (subject to maximum of Rs 1,00,000/-). Please clarify whether I am entitled to this exemption/rebate under Section 80U for the current financial year 2005-06 (Assessment Year 2006-07) also irrespectable of the rebate admissible under Section 80C. Dhan Paul Jain, Mohali A.3 The deduction available under Section 80U is independent of the deduction available under Section 80C of the Act. For the assessment year 2006-07, you can continue to claim the deduction as provided under Section 80U of the Act provided you fulfil all necessary conditions specified in the said section.
30 pc rebate on rental income Q.4 As mentioned in the Income Tax Form No. 2-E, NAYA SARAL, ITS-2E under Sr. No. 2 to 5 30% amount of the annual rent received from rental property was exempted from Income Tax during financial year 2004-05 and earlier. Kindly intimate if this rebate of 30% under Section 24 is still admissible and can be claimed during the current financial year 2005-06 i.e. assessment year 2006-07. If so, this amount of 30% rebate under Section 24 will be in addition to Rs 1 lakh investment made in different schemes under section 80C of the Income Tax Act, which are allowable to be deducted from the total income. Narain Singh, Mohali A.4 The deduction of 30% available under Section 24 of the Act from income from house property is admissible for the assessment year 2006-07 also and is in addition to the deduction which can be claimed under Section 80C of the Act.
No income tax on accidental claim Q.5 We received an amount of Rs 90,000/- as compensation for accidental claim of our deceased father through a High Court order in April, 2005. We need your guidance on the following: (i) Whether this sum is included in our income for this financial year. (ii) How can we get relief from income tax for this sum or whether there is no income tax on this sum. Navin Gupta, Ludhiana A.5 The amount received by you as compensation for accidental claim of your father is a capital receipt and is not exigible to Income Tax. Accordingly, Income Tax is not payable on the said amount.
No IT on capital gains on farm land Q. 6 I am 60 years old and want to sell my ancestral inherited agricultural land for Rs 1.50 crore falling at a distance of 8 k.m. from the Municipal limit of Mohali. I am a tax assessee. Will this amount be taxable? Should it be shown in IT return of the year 2005-06. Mai Dass Khairya, Ropar A.6 The notification No. 9447 dated 06.01.1994 issued by the Central Government specifies the details of areas falling outside the local limits of municipality or Cantonment Board. According to the said notification, in the case of Mohali (SAS Nagar) areas falling within one k.m. on either side of Mohali — Kharar Road up to a distance of 6 km. from municipal limits fall outside the limits of municipality for determining whether the agricultural land is to be treated as a capital asset or not within the provisions of Section 2(14) of the Act. If your agricultural land is not covered in the above area, the same will have to be treated as a capital asset. In case it is so covered, the capital gains on sale thereof would not be taxable. In either case, whether the gain is taxable or not, the fact of sale should be disclosed in the return. In the case of capital gain not being chargeable to tax, the relevant fact should also be disclosed in the return giving a reference to the section under which such exemption is being claimed. |
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by Lalit Batra Market may test new highs The Indian stockmarket continued with their upward spiral last week as well. While sensex gained a little over 1.5 per cent to close at an all-time high of 9284, Nifty also closed higher by 1.23 per cent at 2810. In the current move, which started seven weeks ago, Sensex has gained close to 19 per cent. Relentless buying by the FIIs has helped the markets sustain the momentum, which is also characterised by bouts of profit booking at every rise. Though valuations of most stocks are already way ahead of their fundamentals, markets may continue to scale new highs in the short term on the continued inflows from FIIs. Kirloskar Pneumatic Kirloskar Pneumatic Company Ltd (KPCL), established in 1958, is one of the leading domestic manufacturers of air compressors and gearboxes for windmills and other industrial applications. Steel and fertiliser plants as well as the engineering industry use the main products of the company — air and gas compressors. KPCL has diversified into related fields like air-conditioning, refrigeration and transmission. While in 1983 it merged with Kirloskar Tractors, it went public in 1990. The company, which suffered due to the downtrend in the economy during 1999-2002, is now on a firm road to recovery. KPCL has expanded the product portfolio by acquiring KG Khosla Compressors, a major competitor in the compressor segment and merging the company with itself. The competing product lines were utilised to manufacture high-range compressors. This resulted in a complementary product portfolio and an uni-directional marketing approach. Hence, the merger led to good synergy and expanded KPCL’s product portfolio. The company has also laid off workers and restructured and reduced its debts. This has resulted in a sustained fall in interest payout in the past couple of years. The clean-up exercise resulted in a huge voluntary retirement scheme (VRS) expenditure and large bad debt write-offs during past three financial years, which, in turn restricted KPCL’s bottom line growth. The exercise of extraordinary write-offs would end during the current financial year, after which the balance sheet of KPCL would be lean and clean. The future of the KPCL’s air compressor division looks promising due to huge investments being lined up in a number of infrastructure and mining projects. KPCL’s stock, which currently trades at Rs 257 (is only listed on BSE) may look (overvalued but for an investor with a three-year perspective KPCL may be another Kirloskar brother in the making. |
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