IDFC and L&T Infra have dropped interest rates for tranche2 bonds to 8.7% as against 9% which they offered till December 2011. IFCI which offers 9.09% and 9.16% for 10 and 15 years consequently emerges as a good bet, but the subscription closes 16 January 2012
Those who missed IDFC or L&T Infrastructure Finance Company (L&T Infra) tranche1 last month will be disappointed to know that interest rates for tranche2 have marginally dropped from 9% to 8.7% for 10-year bonds; they open for subscription on 10th and 11th January, respectively. The good news is that IFCI bonds are still available in the market till 16 January 2012 and it offers 9.09% and 9.16% respectively for 10 and 15 years. These bonds can be invested for Rs20,000 towards tax savings under Section 80CCF, which is over and above the Rs1 lakh towards 80C.
Several such bonds come in market during the tax saving season. Bonds of REC, IFCI, PTC India Financial Services and SREI Infrastructure Finance are currently open in the market. IFCI bonds have rating of A+ by Care and LA by ICRA. IFCI and REC have high safety as they are owned by the government. L&T has AA+ rating from Care and ICRA. IDFC, which has a better rating, has AAA rating by ICRA and Fitch.
Even though these bonds appear in a demat account, there are restrictions for selling it in the secondary market within the lock-in period of five years. Issuer of the bonds may offer buyback facility after five years.
Tax savings bonds have struggled this year with IDFC mopping only Rs538 crore with an approval for Rs5,000 crores; L&T Infra got Rs530 crore with an approval for Rs1,100 crore. It may be due to competition from tax-free bonds recently issued by NHAI and PFC; these do not qualify for upfront tax savings, but the interest generated is tax-free as against the 80CCF infrastructure bonds whose interest is taxable.
NHAI and PFC tax-free bonds were offered for 8.2%-8.3% per annum (p.a.) interest for 10 and 15-year bonds respectively. These will more than double your money in 10 years and the icing on the cake is tax-free interest. High net individuals (HNI) and institutional investors quota was over-subscribed as the genuine need for generated interest to be tax-free. PFC tax-free bond is open till 16th January.
Kolkata-based advocate SK Tulsiyan, known in the I-T circles as a CA, is under the CBI scanner for allegedly using his connection to obtain favourable orders from the Income-Tax department and ITAT
Both chartered accounts (CAs) and lawyers are angry over the highly influential SK Tulsiyan, an advocate who is often, mistakenly referred to as a CA. According to reports from the Indian Express, the Central Bureau of Investigation (CBI) is set to file a charge-sheet against Mr Tulsiyan of SK Tulsiyan & Co and a member of the Income-Tax Appellate Tribunal (ITAT). About two years ago, the CBI had asked the revenue department of the finance ministry to conduct an inquiry to determine if orders issued by the ITAT in around 75 cases, where private parties benefitted at the expense of the government, were in accordance with the law or not.
However, this is not the first time Mr Tulsiyan has been in the news. In fact he is notorious among tax evaders and has also been in trouble earlier. But each time he got away. In May 2008, the CBI caught Jugal Kishore, an accountant member with the tribunal, red-handed while accepting Rs30 lakh from representatives of SK Tulsiyan and Co. According a report from the Times of India, Mr Tulsiyan managed to obtain favourable orders by bribing or threatening officials from the Income Tax (I-T) department, especially the ITAT that works under the law ministry.
Citing a case involving a well-known company, an official told the newspaper that, “The matter was represented by some of the best legal brains but they lost. (Mr) Tulsiyan took charge of the case and got the order reversed by filing a miscellaneous application in ITAT. He even had the clout to prevent department representatives from appointing a special counsel to appear for them. Some of the matters were transferred to the ITAT benches where members of his choice were posted.’’
"(Mr) Tulsiyan, who has his offices in Kolkata and Mumbai, is known in the I-T circles as a CA who could get orders in favour of his clients," the ToI reported.
Aggrieved by the arrest of ITAT member and Mr Tulsiyan, one senior advocate SE Dastur, on 6 June 2008 even wrote a letter to the Editor of the Federation of Tax Practitioners Journal. He said, “What is unfortunate is that members practising in the tribunal, at least in Mumbai, did not evince any great sense of disbelief or surprise that there could be an occurrence of this nature.
In the Bar Association members recounted stories of the influence which the advocate concerned commands and the easy access and audience he always has. It is also rumoured that he and his sons have been generous in providing hospitality to members of the tribunal."
In one of the stories on Taxguru.in about effective use of technology in preventing corporate fraud, someone commented that, “Apart from his (Mr Tulsiyan's) erudition and vast legal knowledge, he is the only person who has been the only selfless saviour of the income tax family for three decades, especially in Calcutta and Bombay, by helping officers in times of need—be it transfers and postings or medical emergencies." This comment, however, also highlights the nexus between Mr Tulsiyan and the officials from the I-T department.
According to CA sources, Mr Tulsiyan enjoys luxuries at the cost of his clients. His most preferred accommodation in Mumbai is Hotel Marine Plaza and the client for whom he had flown down from Kolkata had to bear all the expenses.
In 2008, the CBI filed a case against Jugal Kishore, the then member of the ITAT, Ravi Tulsiyan, who is a CA, of SK Tulsiyan & Co, Subash Bajoriya of Mayank Securities and Nishant Jain, after the agency recovered Rs28 lakh from Mr Kishore's residence. The money was allegedly paid to him by Mr Jain on behalf of Mr Subhash and on instructions of the CA firm.
Soon after, the ITAT Bar Association held a meeting of its managing committee in Mumbai, which noted the news reports....
1. that a Member of the Income-tax Appellate Tribunal (Tribunal) based in Kolkata and an advocate have been arrested by the CBI in relation to a bribe said to have been offered by the advocate to the member
2. that the hard discs of 14 computers seized from the premises of the advocate were removed prior to the seizure
3. that the discs have been recovered from the residence of an employee of the advocate.
However, except for resolving not to interfere in the ongoing investigation and requesting that the Bar Council of India (may) to look into the matter and take appropriate steps as may be considered necessary, the association could not do much.
Later, the CBI found the missing hard-disks of all the computers seized from SK Tulsiyan & Co. Scrutiny of the disks led to the retrieval of 75 documents that showed striking similarity with 69 orders issued by ITATs in Kolkata, Mumbai, Chennai, Hyderabad, Bhubaneswar, Guwahati and six orders issued by Commissioner of Income Tax (Appeals) of Kolkata during 2006 to 2008. To their shock, the CBI found that these documents were created even before the issuance of the orders from the ITAT and almost all were written by the firm. Especially, the orders (about 12) issued by Mr Kishore, were prepared at Mr Tulsiyan's office and then transferred the ITAT member for delivering the judgement.
While Mr Kishore was suspended pending investigation, Mr Tulsiyan is now out on bail. Apart from Mr Tulsiyan, his son Ravi Tulsiyan and brother Sajjan Kumar Tulsiyan will also be named in the charge-sheet. Kolkata-based businessman Mr Bajoriya and the middleman Mr Jain are also among those who will be charge sheeted before a Kolkata court by the CBI.
"I am fully aware that the judgements of the tribunal often display learning of a high order. The activities of a few, however, tarnish the image of all. It is indeed sad if a professional person’s activities have created this unfortunate situation," the senior advocate wrote in his letter.
Society of Indian Automobile Manufacturers today lowered car sales growth forecast for the third time to 0%-2% for the ongoing fiscal citing unfavourable macro economic conditions, but said the same could see a jump by 11%-13% in FY12-13, it added
New Delhi: Automobile industry body Society of Indian Automobile Manufacturers (SIAM) today lowered car sales growth forecast for the third time to 0%-2% for the ongoing fiscal citing unfavourable macro economic conditions, but said the same could see a jump by 11%-13% in FY12-13, reports PTI.
“The factors that are affecting the automobile industry such as high interest rates, inflation, high petrol prices and negative economic sentiments are still prevalent. Hence, taking those into consideration we see growth in the ongoing fiscal to be lower from the previous forecast,” SIAM president S Sandilya told reporters at the 11th Auto Expo here.
As per the latest revised forecast, the overall automobile industry is expected to grow by 11%-13% this fiscal.
The same for passenger cars has been pegged at 0%-2%, while that of two-wheelers are at 13%-15% and that of commercial vehicles at 18%-20%.
Earlier in October last year, SIAM had significantly lowered passenger car sales growth forecast for 2011-12 to 2%-4% due to lower output at Maruti Suzuki because of labour issues, and higher lending rates from 10%-12% predicted in July 2011.
In October, SIAM had revised its projections for total sales marginally upward to 11%-14% for FY11-12. It had also revised upward the projection for the two-wheeler segment to 13%-15%. Growth projections for commercial vehicles were revised northward at 13%-15%.
Commenting on the forecast for fiscal 2012-13, Mr Sandilya said: “We don’t foresee interest rates going up further in the next fiscal. Also, there is expectation of stability on the fuel prices and all the other indicators are positive”.
He further said the auto industry is expecting the Reserve Bank of India (RBI) to reduce interest rates by 250-500 basis points in the next fiscal.
Based on these assumptions, SIAM said while the passenger cars sales will grow by 11%-13% in FY12-13, commercial vehicles will witness 12%-14% growth. The two-wheeler segment is pegged to rise by 11%-14% and three-wheeler segment by 6%-9%.
“Overall we see the auto domestic industry growing by 10%-12% in the next fiscal,” Mr Sandilya said.
He, however, said the forecast has not taken into account the possible impact of any change in excise duty structure in the Budget or any other announcement that can impact the auto industry.
Asked about expectations from the Budget for 2012-13, Mr Sandilya said the auto industry hopes that the Rs15,000 additional duty imposed on big cars will be removed.