China factory activity also contracts.

 HSBC's flash estimate of China's PMI edged up to 49.1 from last month's 48.3, and while it's the strongest preliminary reading in the last four months, it's still below the 50 level that indicates contraction. (Reuters)

Spain continues to slump.

Spain's economy shrank 0.4% in Q1 from the previous quarter in a setting of "high financial tension," while it also fell 0.5% from the year earlier period. Yields on 10-year bonds were slightly higher midday in Europe but below 6%.  

Eurozone looks to be sinking deeper into recesson

Eurozone factory activity continued to contract in April as PMI fell to a preliminary 46 in April from 47.7 in March and vs. expectations of 48.1. The region is "extending what appears to be a double-dip recession into a third consecutive quarter...Germany saw growth weaken to near-stagnation, while France saw a worryingly steep downturn,".

Transfer Pricing: TPO cannot examine the necessity of, or rewrite, the transaction

CIT vs. EKL Applicances Ltd (Delhi High Court)
 The assessee entered into an agreement pursuant to which it paid brand fee/ royalty to an associated enterprise. The TPO disallowed the payment on the ground that as the assessee was regularly incurring huge losses, the know-how/ brand had not benefited the assessee and so the payment was not justified. This was reversed by the CIT (A) & Tribunal on the ground that as the payment was genuine, the TPO could not question commercial expediency. On appeal by the department, HELD dismissing the appeal

Uncertainty and concern loom over Spain

The Spanish bond debt auction was a key focus point in the markets today. Spanish concerns remain though and the Euro lost some ground. The Yen was lower on the day, after the Bank of Japan (BoJ) announced a commitment to monetary easing.
The Euro retreated today from a session high against the Dollar. Spain had auctioned its 2 and 10 year bonds with good bid to cover ratios however, the auction failed to alleviate concerns about Spain's long term fiscal outlook.
The auction was seen as a test of investor confidence in troubled peripheral debt markets, after worries persist about the sustainability of Spain's public finances.
Spain sold more than its maximum target at the debt sale. 2.54 billion Euros of 2 year and 10 year bonds were sold, compared with a maximum target of 2.5 billion Euros.
Demand for the 10 year debt was 2.42 times the amount sold. This was higher when compared with 2.17 at the sale on 19th of January.
Spanish 10-year bond yields had jumped above 6% earlier in days leading up to the auction and there were, and remain, concerns that Spain will pay dearly for raising longer term debt.
The Euro edged higher against the Dollar ahead of the bond sale, but soon pared gains to trade almost flat on the day at $1.3129.
Many analysts are of the view that any escalation of concerns about Spain's high level of debt, at a time when the economy is considered as faltering, will put the Euro back under pressure.
The Euro has been under pressure against riskier currencies. In particularly Sterling and the Swedish crown. These currencies have been buoyed after less dovish central bank statements from the Bank of England and Riksbank yesterday.
Many analysts do expect that the Euro will trade lower against the Dollar in the medium term. They cited reasons as being the risks that budget and debt problems in Spain will worsen and uncertainty over the outcome of the French presidential election.

Spain Takes Center Stage, Yen Remains Pressured

The Euro edged up against against the US Dollar and other currencies on Thursday ahead of Spanish bond sales scheduled for later today.
The Japanese Yen inched lower in early trading on Thursday. The Yen remains under pressure after the Bank of Japan's Governor stressed the central bank's commitment to further monetary easing

S. 50C is a deeming provision which does not apply to “rights in land & building”

ITO vs. Yasin Moosa Godil (ITAT Ahmedabad)

The assessee booked a flat in a building which was under construction for which he had paid Rs. 16.12 lakhs. The builder had not handed over possession of the flat to the assessee nor had he executed any registered sale deed in favour of the assessee. The assessee entered into an agreement pursuant to which he transferred his rights, title and interest in the said flat in consideration of the amount paid by him to the builder. The AO took the view that as the flat was valued at Rs. 57.57 lakhs for stamp duty purposes, capital gains had to be computed on that basis u/s 50C. This was reversed by the CIT (A). On appeal by the department, HELD dismissing the appeal:

S.50C applies “where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government for the purpose of payment of stamp duty …” S. 50C is a deeming provision and extends to only to land or building or both. A deeming provision can be applied only in respect of the situation specifically given and cannot go beyond the explicit mandate of the section. If the capital asset under transfer cannot be described as “land or building or both”, s. 50C will cease to apply. As the assessee had transferred booking rights and received back the booking advance, the booking advance cannot be equated with the capital asset and therefore s. 50C cannot be invoked