Thursday, July 31, 2014

[aaykarbhavan] HC : No goodwill 'transfer' u/s 45(4) on retiring partners' account settlement post asset revaluation



August 01 2014
HC upholds Tribunal's order that no goodwill was transferred to retiring partners to attract capital gains u/s 45(4);


courtesy:taxsutra
 
Regards
Prarthana Jalan


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Posted by: Prarthana Jalan <prarthanajalan@ymail.com>


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[aaykarbhavan] source Business standard




Rajasthan Assembly passes labour lawchanges


>NATION

The legislative Assembly of Rajasthan on Thursday passed Bills amending four important labour laws, aimed at making it easier for companies and employers to hire, train and dismiss workers, and to stiffen the rules for trade union registration, among other things.

Passed by voice vote were changes to the Factories Act, the Industrial Disputes Act, the Apprenticeship Act and the Contract Labour ( Regulation and Abolition) Act. The Vasundhara Raje government had introduced these Bills last week.

Since these are amendments to central legislations, on subjects in the Constitution's concurrent list ( meaning, the Centre and states can both enact laws on these, with central law prevailing in case of a difference, unless approved earlier), they all need the President of India's assent before becoming law.

The amendments proposed in the Industrial Disputes Act include empowering employers to retrench up to 300 employees without permission of the government. At the moment, the upper limit is 100 employees. Plus, in case of retrenchment, a worker should raise an objection within three months. At present, there is no time limit. The proposed amendment also says a trade union can be formed only if it gets 30 per cent of the total workers as members. The figure is 15 per cent at the moment.

The amendments in the Factories Act propose to increase the threshold limit of employment for factories operating without power from 20 to 40 and from 10 to 20 for factories operating with power. Complaints against the employer about violation of this Act would not receive cognisance by a court without prior written permission from the state government. A provision for compounding of offences has been added.

The Contract Labour Act is now sought to be applicable only to companies that employ more than 50 workers, against the current 20. Amendments to the Apprenticeship Act call for a third- party training provider, along with easing the rules to add more trades.

Presenting the Factories Bill, Yunus Khan, the public works minister, said Rajasthan would now be known as a "labour reform state". " These changes will create employment and also better the industry atmosphere." The minister also promised that the government would simplify the procedures for opening of small and medium enterprises.

The development comes a day after the Narendra Modi government at the Centre decided to have three labour laws changed, including two that were the subject of the Rajasthan Bills — the Factories Act, Apprenticeship Act and the Labour Laws ( Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act.

SOMESH JHA [1] New Delhi

 


--




A.Rengarajan

Company  Secretary

Chennai

93810  11200

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Posted by: CS A Rengarajan <csarengarajan@gmail.com>


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Re: [aaykarbhavan] Interest free loan to the proprietorship concern of relative



Hi Mukesh,

If i have understood you correctly, a proprietorship unit (proprietor "P") want to take interest free loan from:-

(a) P's relative ("R"), in its individual capacity, 
(b) a firm in which R is a partner.

No amount of justifications / documentations will absolve P from escaping provisions of the Income Tax Act, 1961, in being assessed for "unexplained credits". It also depends on the tax track records (financial capability) of P and R, to what extent it comes down heavily on P and / or R.

Reason is quite simple, nothing is free in today's world. So, if a loan is given free then there is definitely something else which is being hid - like interest is actually payable but in "cash", or it is actually sale of some assets but instead of booking the sale proceeds (and the consequent offering taxable income out of such sale), which is shown as interest free loan.

Hence, advisable to avoid such transactions to attract attention of tax authorities for peanuts.








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On Fri, Aug 1, 2014 at 12:50 AM, Mukesh Katara mukeshkatara@gmail.com [aaykarbhavan] <aaykarbhavan@yahoogroups.com> wrote:
 

Whether a relative can give interest free loan to the proprietorship concern of relative...and one more if firm given imterest free  loan to proprietorship ...pls explain with income tax act.

Thanking you

Mukesh katara
9979743486




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Posted by: Sudhir G Agrawal <casudhiragrawal@gmail.com>


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[aaykarbhavan] Business Standard



















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Posted by: Dipak Shah <djshah1944@yahoo.com>


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Investor's Eye: Update - Maruti Suzuki India, HCL Technologies, ICICI Bank, Lupin, Torrent Pharmaceuticals, Bajaj Electricals, Tata Global Beverages

 

Investor's Eye

[July 31, 2014] 

Sharekhan
www.sharekhan.com

 

Summary of Contents

STOCK UPDATE

 

 

Maruti Suzuki India
Recommendation: Buy
Price target: Rs2,740
Current market price: Rs2,525

 

Operating performance in line with estimate; outlook positive, maintain Buy

 

Key points 

  • Maruti Suzuki (Maruti) reported a 12.6% growth in volumes and a healthy operating performance for Q1FY2015 with a stable GPM and a 30-BPS Y-o-Y expansion in the OPM on the back of a higher operating leverage. Additionally, aided by a 45% increase in the treasury income, the net profit rose by 20.7% YoY to Rs762 crore.
  • As stated by the Maruti management, there has been a perceptible change in consumer sentiment after the general election results with higher enquiries and footfalls. The impact was visible in June 2014 when retail volumes in the urban markets rose by 12.7% after being on a declining trend for two years. Discounts in the system remain at elevated levels because there are only early signs of a demand revival. The discounts are expected come down once a proper trend is established. There has been no let-down yet in rural demand, given the deficient monsoon rains.
  • We have broadly maintained our earnings estimates and the stock is currently trading at 16.5x our FY2016 earnings estimate. We believe the high multiple is justified in view of the strong 26% earnings growth (CAGR) expected over FY2014-17, the positive outlook on the domestic passenger vehicle segment and the company's aggressive depreciation policy which depresses earnings. We maintain our Buy recommendation on the stock with an unchanged price target of Rs2,740. The growth in the domestic PV industry can surprise on the positive side offering further upside to our price target.

 

 

HCL Technologies
Recommendation: Buy
Price target: Rs1,780
Current market price: Rs1,555

 

Steady quarter, maintain Buy with a revised price target of Rs1,780

 

Key points 

  • HCL Technologies (HCL Tech) has delivered a steady performance for Q4FY2014, with the revenues and EBIT margin broadly in line with expectations. However, a lower tax provisioning and a higher other income led the net income growth to beat the estimates for the quarter. The revenues were up by 3.4% QoQ to $1,406.9 million (in constant-currency terms, the revenues grew at 2.8% QoQ). The IT service business' revenues rose by 2.2% QoQ and the BPO business reported a strong 17% Q-o-Q growth in revenues. The IMS division's revenue growth tapered off to 3.7% QoQ, but the management is confident of the growth returning to historical levels as deals start ramping up.
  • For the quarter, the EBIT margin declined by 46BPS QoQ to 24.2% because of staggered wage hikes and the rupee's appreciation against the dollar. The rationalisation of the SG&A expenses supported the margin. The other income was up by 56.3% QoQ and the effective tax rate was 16.5% against 20.9% in Q3FY2014. The net income was up by 13.1% QoQ to Rs1,836 crore. Deal wins remained healthy as the company signed 14 transformational deals (total 50 deals in FY2014) worth more than $1 billion in TCV for the quarter (cumulative TCV of more than $5 billion in the last four quarters). 
  • HCL Tech continues to show consistency in its earnings performance. In the June 2014 quarter the revenue growth was reported at the top of the quadrant among the top-tier IT companies and the company also delivered a steady margin performance. We have marginally tweaked our estimates for FY2015 and FY2016 to factor in the higher other income. Given the relatively better growth visibility among the large-caps apart from TCS, we have increased our target multiple to 15x and consequently increased our price target to Rs1,780. We maintain our Buy rating on the stock. 

 

 

ICICI Bank
Recommendation: Buy
Price target: Rs1,728
Current market price: Rs1,473

 

Strong operating performance

 

Key points 

  • ICICI Bank reported a strong set of numbers for Q1FY2015, as its net interest income grew by 17.6% YoY leading to a 16.8% Y-o-Y growth in the net profit. The non-interest income grew by 14.7% YoY supported by a higher dividend from the life insurance subsidiary and a forex gain from the repatriation of the profits from the overseas branches.
  • The growth in the retail loans remained strong (up 26.7% YoY) while the deposit franchise strengthened (an average CASA balances of 39.5%). The margin expanded further to 3.4% led by an uptick in the domestic margin. The asset quality remained stable as the reported gross and net NPAs were similar to that seen in Q4FY2014.
  • ICICI Bank continues to deliver a strong operating performance led by an improving liability base, focus on retail loans and control on slippages. We expect the bank's earnings to grow at a healthy pace leading to an expansion of the return ratios (return on asset [RoA] of 1.8% and return on equit [RoE] of 15.7%). We maintain our Buy rating on ICICI Bank with a price target of Rs1,728.

 

 

Lupin
Recommendation: Buy
Price target: Rs1,300
Current market price: Rs1,182

 

Price target revised to Rs1,300

 

Key points 

  • Lupin reported a strong performance for Q1FY2015 as reflected in a 35.7% growth in the net sales, a 1,015-BPS surge in the OPM and a 55.8% jump in the net profit during the quarter. The strong growth seen in Q1 can mainly be attributed to the continued benefits of the Cymbalta exclusivity and better traction in the base business.
  • Apart from the strong sales in the US market (up 56.5% YoY), the company registered a healthy 29.2% growth in the Indian formulation business despite the new pricing policy affecting part of the business. 
  • A sharp improvement in the base business' margin due to cost rationalisation measures and the management's guidance to sustain the OPM at 27% to 28% in FY2015 (vs 25% in FY2014) especially impress us. 
  • We revise our earnings estimates for FY2015 and FY2016 by 14% and 14.5% respectively, mainly to factor in a 430-BPS improvement in the margin estimates for both FY2015 and FY2016. Accordingly, our price target stands revised up by 18% to Rs1,300. We maintain our Buy rating on the stock. 

 

 

Torrent Pharmaceuticals
Recommendation: Buy
Price target: Rs887
Current market price: Rs744

 

Price target revised to Rs887

 

Key points 

  • Torrent Pharmaceuticals (Torrent) has reported a strong performance for Q1FY2015, as reflected in a 21% growth in the revenues, a 1,275-BPS surge in the OPM and an 85% growth in the adjusted net profit. 
  • Though the growth was strong during the quarter mainly because of the launch of the generic Cymbalta under shared exclusivity in the US market, but the base business also saw a remarkable improvement in the OPM, thanks to cost rationalisation and improved realisation.
  • The subsequent quarter will see the full impact of the integration of the newly acquired branded business of Elder Pharma and that will materially make for the loss of revenues due to the expiry of the exclusivity on Cymbalta. 
  • We revise our earnings estimates for FY2015 and FY2016 upwards by 3% and 9% respectively to mainly factor in the improvement in the OPM. We also revise our price target up by 16% to Rs887 (16x FY2016E EPS) and maintain our Buy rating on the stock.

 

 

Bajaj Electricals
Recommendation: Book profit
Current market price: Rs287

 

Deterioration in margin outlook; Book profit

 

Key points 

  • Contrary to expectations, not only was the performance of Bajaj Electricals Ltd (BEL) weak in Q1FY2015 but the near-term outlook for its business has also deteriorated considerably. First, the turnaround in the project business could take longer than expected. Second, the lighting business is facing severe margin pressure with CFL manufacturers losing out to LED lighting products. The third business segment, though doing better compared with the other two segments, is also not likely to see any meaningful growth in the next few quarters. 
  • Despite a healthy growth of 13.3% in the revenues, the company posted a lower than expected OPM of 4.2% in Q1FY2015 due to continued losses in the project business and a sharp decline in the margins of the lighting business (the PBIT margin contracted by 340BPS YoY to 1.5% in Q1FY2015). Further, the management has cut the margin guidance for both the consumer product and lighting businesses, though it has retained the overall revenue growth guidance of around 20% for FY2015. 
  • Given the muted outlook, we see scope for a 10-15% cut in the earnings estimates for FY2015 and FY2016 and a de-rating of the valuation multiples. At the current market price, BEL's valuations are not cheap either. Thus, we believe it would be better for investors to take profits home (Stock Idea on BEL initiated at Rs245 on March 3, 2014). On May 8, 2014 we had advised investors to book partial profits at a price of Rs325 and downgraded the rating on BEL to Hold.

 

 

Tata Global Beverages
Recommendation: Reduce
Price target: Rs135
Current market price: Rs154

 

Subdued operating performance, Reduce maintained

 

Key points 

  • Tata Global Beverages Ltd (TGBL)'s consolidated revenues saw a muted growth of 6% in Q1FY2015. The growth was lower mainly on account of a 7% revenue growth in the stand-alone business and an 11% decline in the Tata Coffee (consolidated) business during the quarter. Our rough-cut calculation suggests that the Tata Tetley revenues must have grown in double digits which could be considered as the only positive in TGBL's Q1FY2015 performance.
  • The GPM stood flat while the OPM declined by 90BPS YoY due to higher other expenses during the quarter. The subdued operating performance resulted in just a 3% growth at the adjusted PAT (before minority interest and share of profit from associates) level to Rs100 crore.
  • The first quarter of FY2015 was yet another quarter of a dismal sales performance for TGBL. Going ahead, we expect the profitability to remain under pressure as international tea and coffee prices are expected to remain firm due to an increasing gap between the demand and the supply. We don't expect the revenues to grow substantially as Tata Coffee is expected to post flat revenues. The stand-alone revenues are likely to grow in high single digits due to pressure on the sales volume of branded tea.
  • We believe it will take some time for TGBL to post a strong improvement in the OPM and return ratios but whenever it happens it will be a key re-rating trigger for the stock. We have broadly maintained our earnings estimates for FY2016 and FY2017. In view of the growth head winds in the near term, we maintain our Reduce rating on the stock with a price target of Rs135. The stock is currently trading at 23x FY2015E EPS of Rs6.7 and 19.1x FY2016E EPS of Rs8.1.
 

Click here to read report: 
Investor's Eye  

 

   

Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

 

 Regards,
 The Sharekhan Research Team

 

[aaykarbhavan] Interest free loan to the proprietorship concern of relative



Whether a relative can give interest free loan to the proprietorship concern of relative...and one more if firm given imterest free  loan to proprietorship ...pls explain with income tax act.

Thanking you

Mukesh katara
9979743486



__._,_.___

Posted by: Mukesh Katara <mukeshkatara@gmail.com>


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[aaykarbhavan] Judgments and Information






A different kart race

Share  ·   Comment (2)   ·   print   ·   T+  
NVLX - Emerging Biotech - This is an investment opportunity with serious upside potential
bestofbiotech.com
Online retailers cannot sustain their current cash-burn beyond a point
Flipkart's valuation at roughly $7 billion, after the latest round of funding received from global investors, is remarkable for a company that came into being only in 2007 and has grown over a period when the Indian economy experienced a prolonged slowdown. Its growth is a tribute to both the entrepreneurial energies of its young founders and the power of technology. The internet and mobile telephony are today doing to business and commerce what the railways, telegraph, electricity or container shipping did within decades of their introduction. India currently has 240 million-odd internet users, of whom some 70 million use broadband connections that allow sales and purchases to be done online. But with the spread of 3G/4G and mobile broadband services, these numbers are set to rise dramatically. They will, in turn, further drive growth of the country's already $3.5 billion online retail market.
The market valuations now commanded by Indian e-commerce players such as Flipkart and Snapdeal are essentially a bet on the future growth, on the back of increased internet penetration and increased purchases online. A reasonable benchmark is China, which has an estimated 270 million online buyers as against India's 25 million. The $1 billion gross merchandise value handled by Flipkart is a fraction of the $248 billion worth of goods sold through Alibaba, China's (and the world's) largest online retailer. The potential for growth was captured by Flipkart CEO Sachin Bansal's statement that "India can produce a $100 billion company in the next five years and we want to be that".
But pursuing such ambitions isn't going to be easy. Amazon has for years reported losses or abysmally low profit margins. Yet, investors have continued to push up its stock believing in the American e-retail giant's capacity to become the world's No 1 store. Flipkart, too, is loss-making but has still managed to raise $1.8 billion cumulatively. There are limits, though, to how much cash it can continue to burn. The huge investments the company needs to make in warehouses, distribution networks or mobile technology platforms will eventually have to generate profits. And it needs to do this in the face of competition — not the least from Amazon, which has announced investment of an additional $2 billion in India following Flipkart's successful capital mobilisation. While Indian firms enjoy a slight advantage since foreign online retailers are not permitted to hawk products directly — they can now only offer their platform as a 'marketplace' for others to sell — this benefit cannot obviously be a permanent one. Competition is a reality that market participants in every sector have to ultimately be reconciled to. And consumers won't mind if Flipkart, Amazon and other retailers — online or brick-and-mortar — fight it out for a share of their wallets.
Today's Poll
Will Flipkart be able to handle Amazon's onslaught?
Yes
No
Can't say
(This article was published on July 30, 2014)
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__._,_.___

Posted by: Dipak Shah <djshah1944@yahoo.com>


receive alert on mobile, subscribe to SMS Channel named "aaykarbhavan"
[COST FREE]
SEND "on aaykarbhavan" TO 9870807070 FROM YOUR MOBILE.

To receive the mails from this group send message to aaykarbhavan-subscribe@yahoogroups.com





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