The Tribune, Chandigarh, India

	Govt mulls divesting 10 pc stake in Nalco New Delhi, March 14 The government is considering up to 10 per cent equity dilution in the state-owned aluminium producer Nalco, which may fetch about Rs 2,200 crore. "The Ministry of Mines will have to take a decision. We have said that they could consider 5-10 per cent stake sale," Disinvestment Department joint secretary Sidhartha Pradhan told PTI. At present, the government holds about 87.15 per cent equity in the navratna company while the rest has been made public. Last year, Mines Minister B K Handique had ruled out any further disinvestment programme in the aluminium producer. However, with the government planning to raise about Rs 40,000 crore from disinvestment in the next financial year, the ministry may now review its decision. But, the company may not look at raising fresh equity along with the proposed stake sale, as recently indicated by Nalco CMD A K Srivastava. The Ministry of Mines is currently considering a follow-on public offer (FPO) of its ailing PSU Hindustan Copper Ltd, to raise an estimated about Rs 4,500 crore for each the miner and itself. Nalco shares closed at Rs 395.70, up 0.71 per cent on the Bombay Stock Exchange. Based on the current share price, the government could raise about Rs 2,220 crore from the proposed up to 10 per cent disinvestment. However, the final sum would depend on the rate at which the government decides to sell its stake. The Centre is likely to go ahead with divestment in 12-15 public sector units, including SAIL, Coal India, Hindustan Copper, SJVNL and EIL among others next fiscal to raise Rs 40,000 crore, as stated in the Budget. The sell-off road map for the next fiscal will be prepared by the end of next month and may include BSNL as well, Pradhan said. He further said disinvestment in Satluj Jal Vidyut Nigam would be carried out in April, Engineers India in May-June, SAIL in August-September and Coal India around the end of the year. — PTI
	Artificial scarcity behind high steel prices Manav Mander Tribune News Service Ludhiana, March 14 The artificial scarcity created by Indian steel companies is soaring up steel prices once again. Due to increase in the central excise by 2 per cent, the steel prices should have risen by not more than Rs 600 per tonne, but the steel producers have increased the price by more than Rs 1,200 a tonne. It is expected that the prices of steel will see a further rise. These companies have already increased the prices by around Rs 1,000 per tonne on long products and Rs 1,700 per tonne on flat products after the Budget. The sad part is even after increasing the prices, these companies are not accepting any bookings for long or flat products. "The main reason for not accepting the orders seems to be another hike in store. The consumers are forced to buy steel by paying Rs 2,500 per tonne extra from grey market," rued Badish K Jindal, chairman, Punjab chapter of Federation of Associations of Small Industries of India. Futures trading on commodity exchanges is also responsible for the rise in steel prices. There is a huge difference between physical and futures prices, which indicates the speculation. Speculators get away with fat profits through paper trading with no exposure to the underlying commodity. “Steel producers are fixing the prices illogically. They quote some spot price anywhere in the world and add imaginary expenses of bringing that steel to the Indian ports and also add import duty. These imaginary expenses mount up to $100 a tonne,” said PD Sharma, president of the Apex Chamber of Commerce and Industry. The demand of steel increased by 8.5 per cent whereas the production increased by 4.5 per cent last year. The producers exported steel to increase the gap between demand and supply. In the year 2008-2009, they exported 4.69 lakh tonnes of long products of steel like billets. From April 2009 to January 2010, the export of these products is 3.5 lakh tonnes.
	Seven top cos lose Rs 32k cr in week Mumbai, March 14 In a volatile trade last week, where the Sensex soared to a seven-week high level of over 17,000 points, seven out of top-10 firms lost a sum of over Rs 32,000 crore from their market capitalisation, with NMDC losing the most. However, three firms - Reliance Industries, Infosys Technologies and TCS - together added Rs 10,833 crore to their market valuation for the week ended March 13. State-owned mining giant NMDC, which came out with 33.22 crore shares under its follow-on public offer got subscribed 1.25 times on the final day, saw its valuation decline by Rs 21,469 crore, taking its total valuation to Rs 1,42,868 crore. Shares of the mining giant plunged 12.49 per cent to close at Rs 362.70 on the Bombay Stock Exchange at the end of Friday's trade. During the week, the 30-share benchmark index Sensex had touched the seven-week high level of 17,167.96 points. The market traded in a narrow range but managed to move 172.13 points up this week to close at 17,166.62 points, down 0.01 per cent at the end of Friday's trade on the BSE. The country's most-valued firm Reliance Industries, maintained its numero-uno position by adding Rs 2,158.34 crore in its valuation, taking its total market capitalisation (m-cap) to Rs 3,32,433.2 crore. — PTI
	Muthoot to set up home loan arm Mumbai, March 14 Kerala-based Muthoot Pappachan Group is all set to form a separate subsidiary in the next fiscal for housing finance, which plans to invest around Rs 100 crore over by 2012. The group, however, has dropped its earlier plan to apply for a banking licence. The new venture - Muthoot Housing Finance Ltd - would be set up as a wholly owned subsidiary of Muthoot Fin Corp. The new entity would primarily target the affordable housing segment and aim to disburse small-ticket loans up to Rs 6 lakh. In the initial phase, Muthoot Housing Finance will have 25 branches in the suburbs of major metros like Mumbai and Chennai, the Group’s CMD John Muthoot said. "Setting up a housing finance company is part of the group's strategy to take our operations into the next level. This would also hugely benefit the lower income segment to secure a home loan without much hassles," Muthoot said over phone. — PTI
	GoAir to add 200 flights Mumbai, March 14 The Wadia group-promoted budget air-carrier GoAir plans to add 200 flights to its summer schedule, starting from March 29, according to a source. This will take the total number of flights being operated by the carrier to 1,850 per month. "We are adding 200 flights to our network in the summer schedule. This translates into an over 10 per cent capacity addition," the source told PTI here. At present, GoAir operates 1,650 flights a month. The airline also plans to add two new destinations from April 6, Nagpur and Nanded in Maharashtra, the source said. — PTI
	Market Update Advance tax collection may be next trigger by Lalit Batra Markets remained largely directionless last week in the absence of any major trigger. The BSE Sensex & Nifty rose one and 0.9 per cent, respectively. However, the BSE mid-cap and small-cap indices underperformed the Benchmark indices, falling by 0.5 and 0.8 per cent, respectively, last week. The stock market has applauded the Union Budget 2010-2011 due to its thrust on infrastructure development, government’s pledge to reduce fiscal deficit over the next three years, a smaller-than-expected 2 per cent hike in excise duties, and reduction in taxes for individuals which will boost disposable income. Next trigger for the market may be the figures of advance tax payment by top Indian corporates which will give an indication of fourth quarter earnings. The fourth and the last instalment of advance tax is due on 15th March. Indian equities will also continue to take cues from global stocks and insights into the state of the US economic recovery. IL&FS Transportation Network IL&FS Transportation Network’s (ITNL) IPO is reasonably priced considering the emerging growth opportunities, its strong portfolio of assets and sound parentage. On comparative valuations, ITNL would trade at a substantial discount to its listed peer IRB Infra. Hence, owing to attracting relative valuations, investors may apply in the IPO which closes today. ITNL is a pioneer in the Indian road BOT space and has been involved in the development, operation and maintenance of national and state highways, roads (including urban roads), flyovers and bridges. It has a diversified portfolio, including 17 road projects, a metro rail project and an urban infra PPP project. Strong parentage ITNL immensely benefits from IL & FS’ (its parent) strong brand equity when it comes to bidding for new projects or approaching other financial institutions for funding of projects. Strong parentage also helps in negotiating bilateral contracts with state/central government entities when they are seeking customised proposals. Further, ITNL’s own management has more than 15 years of experience in the surface transportation infrastructure sector. Valuation The pricing of IPO seems reasonable when compared with the listed peer IRB Infra. The ITNL stock (on the basis of FY 2010 financials) is available at a P/BV of 2.8x (at the lower end) and 2.95x (at the upper end) where as IRB infra trades at 4.51 times the P/BV.
	Tax Advice Rebate on daughter’s insurance premium allowed by SC Vasudeva Q. I am a retired government servant and a senior citizen. I have a yearly income of about Rs 4 lakh from my pension, consultancy services etc. I have been claiming about Rs 10,000 under Section 80C on account of insurance premium paid by me regularly towards insurance policies of my children taken by me while I was in service and when my children were not employed. In addition to this premium amount, I have paid about Rs 23,000 during the current year (2009-10) on account of insurance premium of the policy taken by me by married daughter, as she could not pay it being in the US. She is not going to claim the same because this year she has no income, having proceeded on leave without pay. Kindly advise me whether I can claim the amount of Rs 23,000 (paid from my bank account) under 80-C, in addition to Rs 10,000 which I have been regularly claiming since decades. My doubt has arisen because I have not taken this policy, nor have I been claimed it till now. — MK Tiku A. The deduction under Section 80C of the Income-tax Act 1961 (the Act) is allowable for any sum paid or deposited in the previous year by an assessee to effect or to keep in force an insurance on the life of individual himself, his wife or any child of such an individual. The amount of premium paid by you for keeping in force insurance policy on the life of your married daughter should be covered within the provisions of Section 80C of the Act on the basis of the provisions stated herein above. Income from business Q. I have opened X-ray and ultrasound clinic and employed a radiologist to undertake the work. I am paying him salary for the work carried out by him. I do not advise for any medicine. I have spent huge amount on the X-ray and ultrasound equipment. Will the income be chargeable to tax as an income from profession or income from business? — BS Rekhi A. The income in respect of ultrasound centre should be assessed as income from business because the owner is not carrying on any professional activity as he is not a qualified professional himself. Deduction to disabled Q. I understand that some income tax benefits are available to the handicapped persons. Please advise me under what sections and maximum amount for the persons with disability above 90 per cent. Disability certificate has been issued by the CMO. For how many years a certificate is valid. — Gopal Krishan A. A deduction is allowable in computing the total income of an individual who is certified by the medical authority to be a person with disability. The amount of deduction allowable to a person with severe disability is Rs 1 lakh for assessment year 2010-11 and onwards. I hope you are covered within the term ‘disability’ as defined by Section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act 1995 and that the certificate obtained by you is also in accordance with the provisions of the Act. A copy of the certificate so obtained is required to be furnished along with the income-tax return in respect of the assessment year for which deduction is claimed. The duration of the certificate is with reference to the conditions of disability which require reassessment after a period stipulated in the certificate so obtained. A new certificate should be obtained immediately before the expiry of the old certificate so that the claim in respect of the deduction allowable is not lost. Discretionary payment Q. I am a Haryana government employee (my salary for current FY is Rs 3,55,158). My wife was also a Haryana government employee who died in October 2008 due to illness. We have two kids - daughter 20 years old and son 19 years. Now, I am getting financial assistance (copy of the order enclosed herewith for your ready reference) on behalf of my wife. Please let me know whether this financial assistance is taxable or not. If yes, then how I should compute income tax for the FY 2009-10. Financial assistance for the current FY is Rs 3,51,302. — Subhash Kumar A. The Supreme Court in the case of Padmaraje K. Kadambande vs. CIT (195 ITR 877) has held that in case where there was no compulsion on the part of the government to make the payment, the government was not obliged to make such payment, the payment was purely discretionary as well as voluntary. Such a payment has no origin which might be called the real source of income. The principle decided by the Supreme Court thus was that the discretionary payment made on compassionate grounds for such length of period as the government might, in its discretion order, would be a capital receipt and not an income within the meaning of Section 2(24) of the Act. In case the assistance granted to you satisfies the test laid down by the hon’ble Supreme Court, you should be able to claim that the amount of assistance received by you is not chargeable to tax. II Q. This is with reference to the income tax advice regarding ''monthly compassionate assistance tax free" wherein you had advised that the compassionate assistance given by Haryana Government to the spouse or dependent of an employee will not be taxable under the provisions of the Income Tax Act, 1961. I would like to know the precise section under which it is not taxable. I had paid tax for the compassionate assistance to me since 2007. I would like to seek your guidance in this regard. — Dr Sanju Dhawan A. The amount of compassionate assistance has been held to be a capital receipt by the Supreme Court in a case reported in 195 ITR 877. The hon’ble Supreme Court has held that where the payment made by the government is voluntarily and based on its discretion as to the amount and the number of years such assistance would be a capital receipt. You may, therefore, claim the non- taxability of the assistance in case the assistance received by you fulfils the conditions laid down by the Supreme Court in the aforesaid case.