ECB launched bond buying Program to ease euro zone economy

The 3Cs - Coronavirus, Crude oil and Credit Risk seem to have shocked the whole world. The infection from the pandemic and the economic fallout is taking a toll on equity markets. Though central banks and the government are pacifying sentiments through rate cuts and liquidity infusion, the fall in the markets is highly disturbing due to the rising confirmed coronavirus cases and deaths in Europe surpassed China on Wednesday, the ECB launched a €750B bond-buying program to stop a pandemic-induced financial rout shredding the eurozone's economy. The new policy brings this year's planned purchases to €1.1T, with the new round alone worth 6% of the bloc's GDP. Eurozone government bonds surged after the decision, with 10-year Italian bond yields dropping as much as 90 bps to 1.40%. Spanish and Portuguese 10-year bond yields slid around 30 bps each, while benchmark 10-year German Bund yields were down 12 bps at 0.35%.

Global Economy getting worse.

The Price of oil tumbled overnight and could go much lower still.

Global supply disruptions and slackening demand could lead to global recession.

Quarter 1 earnings reports will generally be bad and forward guidance could be even worse.

Expect another rate cut from the Fed and possibly a fiscal stimulus package from Washington, with maybe a short-term rally coming soon.

Further downside in equities appears likely as fear and economic disruptions create global uncertainties.

Rosneft acquire Essar Oil 49.13% stake

A consortium led by Rosneft  announced the completion of a $12.9B deal to acquire Essar Oil, strengthening ties between the world's largest oil producer and the fastest growing fuel consumer. Rosneft will get a 49.13% stake in Essar, while the Trafigura-UCP consortium via Kesani Enterprises will get another 49.13% holding. The remaining 1.74% stake will be held by retail shareholders.

Moody downgrade China's rating

China's great wall of debt! Moody's has lowered the nation's credit rating to A1 from Aa3, citing Beijing's waning financial strength and rising liabilities. It marks the first time a major ratings agency has downgraded the country in more than 25 years. The move also received a backlash from China's finance ministry, which said the decision was "absolutely groundless" and was based on an "inappropriate calculation method."

President Trump's first budget proposal

President Trump's first full budget proposal lands on lawmakers' desks, with a proposed $3.6T in spending cuts over the next decade. Congress will still be allowed to spend $4.1T in 2018, including a big boost to defense, border security and infrastructure, while cutting Medicaid, food stamps and other social programs. The plan also calls for selling half of the nation's Strategic Petroleum Reserve and permitting drilling in the Alaska refuge.

S. 54/ 54F: There is no requirement that the investment in the new residential house should be situated in India prior to the amendment by the Finance (Nos.2) Act, 2014 w.e.f. 01/04/2015

ITO vs. Nishant Lalit Jadhav (ITAT Mumbai)

A similar situation, though in the context of section 54F of the Act, has been considered by the Hon’ble Gujarat High Court in the case of Smt.Leena J. Shah (supra); notably, so far as the impugned issue is concerned, the requirement of sections 54F & 54F of the Act is pari-materia, inter-alia, requiring the assessee to make investment in a new residential house in order to avail the exemption on the capital gains earned. As per the Hon’ble High Court, prior to the amendment the only stipulation was to invest in a new residential property and that there was no scope for importing the requirement of making such investment in a residential property located in India

S. 56(2)(vi): A HUF is a "group of relatives". Consequently, a gift received from a HUF by a member of the HUF is exempt from tax as provided in the Explanation to s. 56(2)(vi)

DCIT vs. Ateev V. Gala (ITAT Mumbai)

From a plain reading of section 56(2)(vi) along with the Explanation to that section and on understanding the intention of the legislature from the section, we find that a gift received from “relative”, irrespective of whether it is from an individual relative or from a group of relatives is exempt from tax under the provisions of section 56(2)(vi) of the Act as a group of relatives also falls within the Explanation to section 56(2)(vi) of the Act. It is not expressly defined in the Explanation that the word “relative” represents a single person. And it is not always necessary that singular remains singular. Sometimes a singular can mean more than one, as in the case before us. In the case before us the assessee received gift from his HUF. The word “Hindu Undivided Family”, though sounds singular unit in its form and assessed as such for income-tax purposes, finally at the end a “Hindu Undivided Family” is made up of ‘a group of relatives”