The Tribune, Chandigarh, India

Adani MD nabbed for duty evasion

Rajesh Adani

Ahmedabad/Mumbai, February 27
Managing Director of Adani Enterprises Rajesh Adani was today arrested by the CBI for allegedly evading customs duty on petroleum products, causing a loss of Rs 1.07 crore to the state exchequer.

Adani, whose company is part if Rs 26,000-crore Adani group, was apprehended in Ahmedabad and was being taken to Goa where the case was registered against him, 10 Customs officials, Mumbai-based company Ganesh Benjoplast and Goa-based JAE Letavoson clearing firm, CBI spokesman Harsh Bahal said in New Delhi.

The Anti-corruption branch of the CBI's Goa unit claimed in its FIR that the 10 Customs officials allegedly entered into a conspiracy with the two companies and undervalued import of two consignments of naptha and one of furnace oil, thus causing the loss of Rs 1.07 crore.

The Mumbai-based firm had been charged with providing free warehousing for the three consignments, which they were not entitled to. The case was registered on April 25, 2008, under sections 120-B (criminal conspiracy), 420 (cheating) and for abuse of official position.

Reacting to his arrest, the Adani group said till date no case or show-cause notice was given to Adani regarding the case. "Adani Enterprise petroleum products division had made arrangements, in the normal course of business, to import certain petroleum products in 2005-06 and 2006-07 on behalf of licence and permission holders," the company said in a statement.

Adani was released from a Gandhinagar civil hospital after he had complained of high blood pressure and CBI was preparing to take him to Goa. — PTI

Revised direct taxes code draft promised

New Delhi, February 27
Finance Minister Pranab Mukherjee today assured India Inc that the government would come out with a revised direct taxes code (DTC) draft and seek their comments before finalising it.

He said addressing the concerns of India Inc at a joint post-Budget meeting organised by industry chambers Ficci, the CII and Assocham here.

The government, he further said, will consider suggestion of the industry to raise savings limit for personal income tax payers next year. Currently, individuals can seek tax exemption on savings up to Rs 1 lakh in a year, in addition to Rs 20,000 in infrastructure bonds.

Inflationary impact to be absorbed

Pranab Mukherjee today said he took a risk of facing inflation in raising excise duty across the board for mobilising resources, but expressed confidence that the impact would be absorbed. This would have an inflationary impact of 0.41 per cent on wholesale price index which would be absorbed in due course of time, he said.

"I do agree that my tax proposals (excise duty increase from 8 per cent to 10 per cent on non-oil products) will have some inflationary ingredient. It will be about 0.41 per cent. But in course of time it will be absorbed," he said at an interaction with members of industry chambers.

Confident of 7.2% GDP rate

Pranab stuck to 7.2 per cent annual economic growth forecast for the current fiscal, despite the third quarter showing just 6 per cent expansion.

The lower GDP growth in the third quarter was mainly due to poor performance of the agricultural sector.

But in the third quarter it was negative 2.8 per cent," Mukherjee said.

Rajan Mittal is Ficci chief

Rajan Bharti Mittal, vice-chairman and MD of Bharti Enterprises, a diversified group dominant in telecom, insurance and retail, today took over as the president of Ficci.

Mittal, 50, succeeds Harsh Pati Singhania, MD of JK Paper. An alumnus of Harvard Business School, Mittal oversees Bharti Enterprises at the corporate level. He is also involved in the group's new business ventures like retail.— PTI

Aviation Notes
New baggage rules on cards
by K.R. Wadhwaney

Indians in the civil aviation sector are known to be copy-cats. Whatever the USA or Europe does today, the Indians imitate it the next day.

US airlines have revised their rules, check in suitcases and hand baggage, and started charging varying amount for overweight and oversize of suitcase to increase their revenue or offset their losses.

Airlines in India are contemplating of revising baggage rules on the pattern of the USA to cut their losses. Initially, it will be done on the domestic routes on which private operators have already outpaced the national carrier.

What is worse is that Indian carriers do not pay any compensation to already harassed passengers when all suitcases or part of them are mishandled. Recently, part of the baggage of the family, staying in Saharanpur, was mishandled. The airline declined to send it to Saharanpur. The woman had to travel to Delhi to collect it.

The ground staff at the IGIA expressed helplessness in paying any compensation. This is unlike in foreign countries where erring airlines pay compensation and also conveyance money.

Ever-changing taxes, heavy airport users' fee, varying fares, negligible snacks, poor facilities, heightened security and now revised baggage rules will render travelling by air more irksome than has been the case at present.

There is a mixed analysis for National Aviation Company Limited (Air India). While the government has released the promised equity and President Pratibha Patil, in her address to both Houses of Parliament, has spoken 'encouraging words to help rehabilitate

the airline, civil aviation analysts feel that the airline continues to stay in the 'intensive care unit'. They believe that the Rs 800 crore equity is a mere 'temporary measure' and the airline cannot be saved as the measures so far envisaged are grossly inadequate.

As government decided to infuse equity, it also restored the payment of productivity-linked incentives (PLI) to functional directors. The restoration, according to the analysts, is untimely as it will add to the losses of the airline. The statistics show that the losses are mounting month after month - Rs 400 crore a month on an average.

In the recent Board of Directors' meeting, a gloomy picture of the airline was painted by most of the members. The general view was far-reaching changes in political set-up and unison of management, administrative staff and trade unions. If these two measures are

undertaken with immediate effect, there is no possibility of turnaround of the airline.

The Group of Ministers are all for resuscitating the national carrier but they are unanimous in saying that reduction in overhead expenses and rationalisation of wages and work force as also effective measures of discharging debts are imperative for the airline to start breathing on its own.

Pleading that they were unaware of the Indian rules, both Steve Martin (55) and Stephen Hampston (46) were granted bail by the court. The Foreigners Regional Registration Office (FRRO) promptly freed them. The two were detained on February 15 for recording conversations between pilots and Air Traffic Controller (ATC) from the Radisson hotel, situated near the IGIA.

As British High Commission officialdom has been cooperative and as there is no black mark against them, they have been set free. But they will have to secure court permission before they can leave Delhi.

Investor Guidance
Tax relief on loan for house renovation
by A.N. Shanbhag

Q: I have taken home loan and then after 2 years additional loan (mortgaged) was taken (on the same property) for furniture, renovation & extension of the house. Can I avail income tax benefit for both loans? — Sumeet Gilra

A: Yes, you can take income tax benefits of both loans but note that the interest payable on capital borrowed for acquiring, constructing, repairing, renewing or reconstructing the property with a ceiling of Rs. 30,000 on self-occupied property. The higher limit of Rs 1,50,000 is applicable on loans taken on or after April 1, 1999, but only for acquiring or constructing. The lower limit of Rs 30,000 continues to be applicable for loans taken for repairing, renewing or reconstructing. Loan taken for buying furniture is not eligible since it is not a home loan.

New tax return form

Q: In his Budget speech, the FM mentioned that new tax return form (Saral II) is being introduced. Can you throw some light on this? —Gurbux

A: It has been the general complaint of taxpayers that the ITR series tax return forms that replaced the erstwhile Saral are too complicated. Which is why the government has announced the introduction of a two-page simple and user-friendly tax return form. Since this is just an announcement by the FM in his speech, when exactly will these forms be issued and to which category of taxpayers (apart from the salaried) is yet not clear. The income tax department should be coming out with a notification in this regard.

Converting to NRO a/c

Q: What is the procedure for converting Resident a/c to NRO a/c? What are the implications if it could not be done because of ignorance of rules? How
can it be done now when NRI is not in India? What are the tax obligations and penalty if any? — R. C. Ahuja

A: You need to get in touch with your bank for this. The bank will inform you regarding the paperwork required. Basically, you will need to submit your passport and proof of living abroad (in terms of visa, green card, foreign citizenship, etc.) As long as you do not owe any taxes to the exchequer, there are no financial consequences as such.

Theoretically, the law prescribes different penalties/punishments for non-compliance but for the lapse of not converting the account, in our experience, there has been no penal action. However, it would be advisable to get it done as soon as possible.

Extent of relief

Q: As a taxpayer, what is the extent of relief that I can expect due to the increase in tax slabs announced in the Budget? — Manmohan

A: The relaxations in the tax slabs will affect the tax outgo of different categories of taxpayers depending upon the individual income level. The following table showcases the tax benefit for different income levels. As you can see, the maximum benefit of Rs. 51,500 is for income levels of Rs. 8 lakh and above.

Kapurthala player is Merc brand ambassador
Our Golf Correspondent

Gaganjeet Bhullar

Chandigarh, February 27
Gaganjeet Bhullar, currently ranked third on the Asian Tour Order of Merit, has overtaken celebrity cricket greats to be named the brand ambassador for Mercedes. The 21-year-old Kapurthala golfer was in Panchkula today at the 10th Mercedes Trophy Golf Tournament.

Bhullar, who began 2010 with a win in the season opening Asian Tour International in Bangkok on February 7, has set his sights on the qualifying tournament for the British Open. He hopes to make it again for the Major this year.

At a time when cricketers are making their mark as brand ambassadors, the golfers have overtaken them as far as iconic brands like the Mercedes, the BMW or the Jaguar are concerned. The three-year Mercedes contract has made Bhullar the proud owner of a Mercedes Benz sports model.