U.K. manufacturing PMI rose to 57.3 in April

From 55.8 in March and comfortably topped consensus of 55.4. However, there was another sharp slowdown in the growth of new orders for investment goods, which is a blow to the hopes of re-balancing the economy away from its reliance on consumers. Still, the pound took a leap after the data was released and was +0.2% at $1.6909 at the time of writing.

China's official manufacturing PMI edged up to 50.4 in April

From 50.3 in March but slightly missed consensus of 50.5. The data indicates that manufacturing is just about expanding and adds to HSBC's flash PMI reading which shows that the sector is contracting. As per economist,"The economy is showing slight improvements due to recent policy measures but there is no sign of a bottoming out."

No.S14A Rule 8D disallowance for investment in shares of susidiaries and jointventures.

JM Financial Limited vs. ACIT (ITAT Mumbai)

In AY 2009-10, the assessee has specifically raised a point before the AO that 97.82% of the investment is in subsidiary companies and joint venture companies and, therefore, no expenditure was incurred for maintaining the portfolio on these investments or for holding the same. The assessee has also pointed out that these investments are long term investment and no decision is required in making the investment or disinvestment on regular basis because these investments are strategic in nature in the subsidiary companies on long term basis and, therefore, no direct or indirect expenditure is incurred. The department has not disputed this fact that out of the total investment about 98% of the investments are in subsidiary companies of the assessee and, therefore, the purpose of investment is not for earning the dividend income but having control and business purpose and consideration. Therefore, prima facie the assessee has made out a case to show that no expenditure has been incurred for maintaining these long term investment in subsidiary companies. The AO has not brought out any contrary fact or material to show that the assessee has incurred any expenditure for maintaining these investments or portfolio of these investments. In Godrej & Boyce Mfg. Co it was held that s. 14A(2) does not ifso facto empower the AO to apply the method prescribed by Rule 8D straightaway without considering whether the claim made by the assessee is correct. Also, in Garware Wall Ropes it was held that a disallowance u/s 14A cannot be made if the primary object of investment is holding controlling stake in the group concern and not earning any income out of investment. Similarly, in Oriental Structural Engineers (approved by the Delhi High Court) it has been held that s. 14A disallowance cannot be made for investment in subsidiaries and SPVs out of commercial expediency

PSU banks' NPAs pose a major risk...

The RBI's agony over the deterioration in quality of assets of PSU banks is well understood. Especially when seen in context of the Indian financial sector as a whole. That the government owned banks corner nearly two thirds of the assets in the banking sector is well known. What is not known is the fact that the PSU banks tower over other financial institutions holding public assets and have a larger share of assets than insurance companies, NBFCs and mutual funds put together. In addition they account for 63.2% of the GDP. Thus a systemic NPA crisis in PSU banks threatens to risk the entire financial sector in India. And the RBI should therefore not just curtail asset slippage but also ensure better management of the PSU banks.

Bank of Japan's latest outlook on prices and growth

The central bank stuck with its inflation forecasts of 1.3% for the fiscal year ending March 2015 and 1.9% the following year. Unveiling its 2017 estimate, the bank saw inflation rising to 2.1% - ahead of its 2% target. The higher inflation forecast might dampen some economist expectations for further bank stimulus this year, but the other half of the BOJ report saw the central bank lowering its GDP growth outlook for this year to 1.1% from 1.4% previously. For the fiscal year ending March 2016, the forecast remained at 1.5%. The yen saw sizable gains against the dollar following the report's release, but those have been trimmed, leaving dollar/yen marginally lower at ¥102.50.

U.K. GDP growth strengthened to its fastest rate

In six years in Q1, climbing to +3.1% on year from +2.7% previously but coming in below expectations of +3.2%. On quarter, GDP grew 0.8%, with growth occurring in three out of the four main industrial groupings in the economy. However, GDP is still 0.6% below its peak in Q1 2008. The pound was flat at $1.6806 at the time of writing after being higher before the data was released.

Entire law on formation of AOP & taxability of off-shore supply & services explained

Linde A. G. vs. DDIT (Delhi High Court)

As regards taxability, the principle of apportionment of income on the basis of territorial nexus is now well accepted. Explanation 1(a) to section 9(1)(i) of the Act also specifies that only that part of income which is attributable to operations in India would be deemed to accrue or arise in India. It necessarily follows that in cases where a contract entails only a part of the operations to be carried on in India, the assessee would not be liable for the part of income that arises from operations conducted outside India. In such a case, the income from the venture would have to be appropriately apportioned. Merely because a project is a turnkey project would not necessarily imply that for the purposes of taxability, the entire contract be considered as an integrated one. Where the equipment and material is manufactured and procured outside India, the income attributable to the supply thereof could only be brought to tax if it is found that the said income therefrom arises through or from a business connection in India. It cannot be concluded that the Contract provides a “business connection” in India and accordingly, the Offshore Supplies cannot be brought to tax under the Act (Ishikawajima-Harima Heavy Industries 288 ITR 408 (SC) and Hyundai Heavy Industries 291 ITR 482 (SC) followed)