Looking for Investments?
Dr. Sanjiv Agarwal
The business and economic environ in the country seems to be recovering from the slow down and with most of the signs being positive, it looks like bullishness in economy in times to come. Translated to investments, markets and returns on most type of investment options look brighter in times to come. Be it inflation, corporate performance, economic indicators, policy decisions on revival and reforms…… all appear to be on positive and proactive side. Politically too, the policies and ideology of the present government at the centre gets endorsed in the form of recent election results.
Investors who have been sitting at the fence for quite long now should venture for fresh investments now. However, one needs to keep in mind the sectors which will perform better and grow faster. For example, if an investor is looking for stocks, he may avoid banking sector or sectors which are vulnerable like real estate or those affected by disputes or litigation such as coal, telecom etc and look for rather fast growth stocks, say from e-commerce or online retail, SME segment, education etc. Companies engaged in affordable housing projects would also gain in long run.
Similarly, with crude oil prices falling (35% in last 3 months), one should look at stocks that benefit from such fall in crude prices. This would also increase corporate earnings. Oil companies, paint manufacturers, tyre industry, companies engaged in plastics, ONGC etc are likely to benefit.
Some of the public sector undertakings where reforms and restructuring is on cards, may also be picked up.
Further, there are certain companies which are cyclical in nature (cement, fertilizers etc) which are likely to earn more with increased economic activities and development. With rise in household incomes, capital goods, automobile and financial services sectors will also grow relatively better.
On the other hand, investors ought to distance from stocks which are facing the regulatory challenges and scrutiny (such as Jindal Steel, DLF, GSK Pharma etc).
With slow credit off take, banks are likely to reduce the interest rates on deposits, thus making investors look at other avenues to increase return on investment (ROI). With lower ROI, investors may not go for bullion, given the present dynamics of gold prices though there is huge demand – supply gap giving room for moderate to high returns. But in long run, investors may have to look at stock market for the present. This is not a bad proposition provided investors are able to identify the stocks based on both-historical pattern and projections.
AO couldn't make reassessment to disallow sec. 80-IA relief if such issue was considered during assessment
November 13, 2014[2014] 50 taxmann.com 48 (Bombay)/[2014] 364 ITR 222 (Bombay)
IT: Where issue of deduction under section 80-IA was discussed and deliberated by Assessing officer during regular scrutiny proceedings and responded to by assessee, merely because issue was not discussed in assessment order would not lead to reopening of assessment
HC directs AO to re-compute capital gains after referring the valuation of capital asset to Valuation Officer
November 13, 2014[2014] 49 taxmann.com 513 (Madras)/[2014] 226 Taxman 111 (Madras)(MAG.)
IT: Where assessee made an objection with regard to adoption of market value under section 50C(1), Assessing Officer should have referred valuation of capital asset to valuation officer under section 50C(2)
Reassessment to tax income from house property upheld as ALV of property assessed at higher rate in prior year
November 4, 2014[2014] 49 taxmann.com 479 (Mumbai - Trib.)/[2014] 150 ITD 659 (Mumbai - Trib.)
IT : Where Assessing Officer having completed assessment taking rental value of property at a particular amount, initiated reassessment proceedings finding that in earlier assessment year rental value accompanied by interest free deposit had been assessed at higher amount and said annual value would have only witnessed an increase during intervening period of two years, validity of proceedings so initiated deserved to be upheld
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