The Tribune, Chandigarh, India

	Largest auction of oil, gas blocks relaunched Mumbai, August 8 India today relaunched its largest-ever auction of oil and gas exploration areas, aiming to attract $3-4 billion investment towards boosting energy security. Petroleum Minister Murli Deora kick-started the offer of 70 oil and gas exploration areas in the 8th edition of New Exploration Licensing Policy (NELP) and 10 coal bed methane (CBM) blocks with the first roadshow here. “NELP can be portrayed as India’s success story in our endeavour to achieve self-sufficiency in hydrocarbons,” he said at the promotional roadshow. Under NELP, 71 oil and gas discoveries have already been made in 21 exploration blocks by accretion of in place hydrocarbon reserves of more than 600 million tonnes of oil equivalent, he said. “Major natural gas production in KG basin commenced from April. With this, the gas production in the country would be doubled, and in monetary terms it would be about $42 billion,” the minister said. Total committed investment in NELP rounds for exploration so far is around $10 billion, out of which $5.3 billion in exploration has been made. Further, $6.6 billion will be invested towards development of the exploration and production sector. Last date of bidding for the nation's largest-ever auction of oil and gas blocks is October 12. A revised timetable has been drawn after Finance Minister Pranab Mukherjee extended the seven-year income-tax holiday to natural gas production. India had on April 9 launched the eighth round of auction of blocks for exploration under NELP with August 10 being the last date for bidding. But it was deferred over ambiguity on the availability of tax holidays for natural gas. India is offering 24 deep-sea blocks, 28 shallow water blocks and 18 onland blocks for bidding in NELP-VIII hoping to attract $3 billion investment in exploration. — PTI
	NTPC not to relent on gas price New Delhi: In the face of the Oil Minister's comment that RIL gas to NTPC could be given at a government- approved price, the state-owned power major on saturday said it would continue to fight legally for the fuel's contracted price and seek the Power Ministry's help. “NTPC will continue with its stand on price of $2.34 per mmBtu (as committed by Mukesh Ambani-led RIL) and will take support from (the) Ministry of Power,” a top company official said on condition of anonymity. Petroleum Minister Murli Deora had told the Rajya Sabha on Thursday that RIL had not sought approval for the $2.34 per million metric British thermal unit (mmBtu) price quoted by it in NTPC's 2004 tender. — PTI
	RBI nod to coop bank branches in rural areas Ruchika M. Khanna Tribune News Service Chandigarh, August 8 For the first time, the RBI has allowed state cooperative banks to open branches at district headquarters and semi-urban and rural areas. The idea behind the move is to revive short-term rural cooperative credit structure. The apex regulatory bank has come up with a new policy for opening of new places of business by state cooperative banks (StCB). The three-tier cooperative credit structure has the StCB at the apex level, central cooperative bank (CCB) at the intermediate and Primary Agriculture Credit Societies at district level. Under the new policy, StCB, which is allowed to open branches in state capitals, will now be allowed to open branches at district headquarters, but only for the purpose of maintaining and servicing deposits of cooperative banks. The policy also allows the StCB to open its branch in semi-urban and rural areas, where CCBs are non existent, weak or virtually defunct. But a StCB branch can be opened here only if the CCB in the adjoining district is not in a position to extend its area of operation and service the area where the CCB is defunct. In states, where a two-tier cooperative structure exists (there are no CCBs), the RBI has allowed the StCB to open branches in urban as well as rural centres. It may be noted that in the North eastern states, the RBI has already allowed the StCBs to open branches anywhere in the state. The RBI has, however, said for the purpose of opening new branches the StCB should have a capital to risk weighted asset ratio of at least nine per cent and net NPA should not be more than 10 per cent. The banks should also have complied with the cash reserve ratio and statutory liquidity ratio. The state cooperative banks have been asked to submit their applications for opening of new branches to RBI through Nabard.
	Aviation Notes Public view of ‘private affairs’ by K.R. Wadhwaney The private airlines’ untenable plea for a bailout and threat of one-day strike call on August 18 succeeded in diverting the attention of media and masses from rough happenings in Air India. Jet Airways (Naresh Goyal), King Fisher (Vijay Mallya) and their colleagues were aware that the bailout was not possible. They had agreed to go on strike at the behest of the powers-be to actually bailout some politicians and bureaucrats instrumental in creating mess in the otherwise serene NACIL. If the government had yielded to threats of the private operators, there would have been hundreds of sick companies that would have queued up for similar concession. In that case, the government would have been forced to declare bankruptcy. There is turmoil in the civil aviation industry owing to lack of proper discipline and judicial governance. In the present scenario, the need of the hour is to treat the directorate-general of civil aviation as an apex body and allow it to function as the chief body to bring out complete stability in the shaken sector. The Ministry of Civil Aviation should continue to be the policy-making and policy-adhering outfit. Reduce political stranglehold from the corridors of the civil aviation and rosy picture will start emerging. All, however, is not honey with private operators. They have been caught in equally vicious whirlpool of their own creation. They owe crores of rupees to oil companies, Airports Authority of India (AAI) and also NACIL for non-payment of ground-handling charges. Why the government and some politicians are going soft on their unprofessional functioning? There should be one rule and that should apply to all. Apart from sustaining huge losses and several other internal and external problems, a fresh row between pilots and Jet Airways has surfaced. When two pilots sought permission for recognition of the union they had formed, they were summarily sacked instead of serving them with a show cause notice. The commanders are now planning to form National Aviators' Guild (NAG). The trouble between pilots and management has surfaced and, according to analysts, there is every possibility of 755 pilots of Jet going on strike. If the strike takes place at this juncture, it will be bad for the industry and may spread beyond Jet Airways. AAI may not have served the passengers faithfully but has served the government for decades. The statistics reveal it has donated more than Rs 200 crore to government and given sizable purses to political parties. As a public undertaking, it has been instrumental in building airports abroad and has upgraded several airports in the country. It has a huge staff of proven ability, skill and competence. The pity is that many of them are not allowed to function freely bringing into play their merits and qualifications.
	Investor Guidance LTCG can’t be set-off against other losses by A.N. Shanbhag Q Whether long or short-term capital loss arising out equity sale be applicable for off-setting long or short-term capital gains arising out of property. Can the long and short-term loss arising out of equity sale be carried forward for five years? — Sameer A 1(a) The long-term capital gain (LTCG) for shares sold on recognised stock exchanges and equity-based units of MF is exempt and, therefore, it cannot be set-off against any other losses, including the carried forward losses of yesteryears. Consequently long-term capital loss (LTCL) is also exempt and is not available for any set-off. (b) The short-term capital gain (STCG) enjoys the concessional flat rate of tax at the rate of 15.45%. 2 STCG can be adjusted against either taxable LTCG or STCG earned from selling any other property. LTCL can be set-off only against taxable LTCG. Unadjusted loss (LTCL or STCL) cannot be set-off against business income or income under any other head. It can be carried forward for similar set-offs for as many as eight years. 3. In the case of debt-based MFs and equities, which have not been sold on a recognised stock exchange in India, an additional option of paying the tax at the rate of 10.3% of the profit (without indexation) is also available, if more beneficial. Tax liability Q (1) I purchased a house on hire-purchase basis in August 1980. The total cost of the house was Rs 49,521. The payment was made in monthly instalments spread over a period of 12 years commencing September 1980 and completed in August 1992. I sold this house for Rs 12 lack and conveyance deed was executed in May 2009. Please intimate the long-term capital gain and tax liability on the same. (2) Further, I purchased a society flat in January 2007. The last instalment towards cost of this flat was paid in January 2009. Can this last payment be off set against the long-term capital gain arising from sale of house mentioned above? (3) The tentative cost of above flat is above Rs 30 lakh and the payment was made in instalments spread over 2007, 2008 and 2009. Is the purchase of this flat required to be shown in the IT return under schedule AIR? — UR Gupta A (1) Effectively, you have purchased your first house for Rs 49,521 less, interest you have paid. This is the cost of acquisition and the date of acquisition is the date when you got the possession of the house. The fact that you have paid the price in instalments is immaterial and inconsequential. (2) You can claim exemption u/s 54 or 54F by purchasing a residential house within a year before or two years after the date of sale of the old house. Alternatively, you may construct a residential house within three years after the date. We believe you have sold your old flat in May 2009 and purchased a new house in January 2007. Since the requisite period of one year prior to sale to claim exemption has expired, you cannot claim the exemption u/s 54. We presume you had got the possession of the flat in January 2007. Kindly note that these answers are dependent upon our correct understanding of your query. (3) Yes, you are required to show this transaction in your AIR since the cost of the flat is over Rs 30 lakh. TDS deduction Q I had resigned from my previous company and paid them 30 days salary in-lieu of serving the 30-day notice period. The amount was reimbursed by my current employer after I joined here. But the same was included in my taxable salary and TDS was deducted. Is this amount payable by my current employer taxable? Alternatively, is there is any provision whereby we can claim deduction for this amount? — Venkatesh Hegde A The amount reimbursed by your current employer flows out of your relation of employer-employee with him. It has to be considered as part of your salary and TDS has to be applied thereon. Though you have not posed the query, let us take up the deductibility of the penalty you paid to your ex-employer for tax purpose. This amount represents application of your income and, therefore, it is not deductible. You have merely applied this income to discharge a liability. We feel that the salary earned flows out of the contract between employee and employer and so does the penalty. Therefore, it can be viewed as a negative salary. We pray for an amendment in the Rules to fall in line with jurisprudence. The authors may be contacted at wonderlandconsultants@yahoo.com