Eurozone banking system massively oversized.

At €33T, the eurozone banking system's assets are worth 3 1/2 times the bloc's GDP, RBS notes, adding that the sector needs to shrink its collective balance sheet by €2.7T over the next three years for the situation to be "sustainable." Otherwise, governments may be unable to support the industry in a crisis. In contrast, the U.S. sector is about the same size as the broad economy.

Nifty July Futures - Important Levels for Tuesday, 23.07.2013.

TREND DECIDING LEVELS : Today, the Important Trend Deciding Levels on Lower Side is  6040.  Below this, next important level is  6000.     (This levels, Either Acts as a support while Nifty is moving in downward direction or Acts as a down side Break out/Break down Trigger level which fuels further downward movement from here).

Today, the Important Trend Deciding Levels on Higher Side is 6065.  Above this, next important level is  6100.   (These levels, Either Acts as a hurdle while Nifty is moving in upward direction or Acts as a Upside Breakout Trigger level which fuels further upward movement from here).

Disclaimer :

 

The stock Tips and recommendations given in this blog is for information and educative purpose only. No representations can be made that the tips given here will be profitable or that they will not result in loss. Trading involves risk of loss of money. The Tips in this news letter are given with the understanding that readers acting on this information assume all the risks involved and that they are trading at their own risk. The above recommendations are based on the theory of price related technical analysis and they do not reflect the fundamental strength or weakness of the respective stocks. We shall not be responsible for any loss incurred for acting on the tips given above.

 

 

 

Shinzo Abe's LDP wins big in election, shares rise.

Stocks in Japan increased 0.7% after the bloc led by the Liberal Democratic Party of Prime Minister Shinzo Abe won a big majority in an election for the country's upper house yesterday, giving the LDP control of both chambers of parliament. While the result gives Abe a strong mandate for his aggressive economic reform, some are worried he'll shift his focus to the pursuit of his party's nationalist agenda.

Transfer Pricing: Companies with extreme turnover like Infosys are not comparable

CIT vs. Agnity India Technologies (Delhi High Court)

The assessee, a wholly owned subsidiary of Bay Packets Inc., USA, was engaged in the business of development of software for the parent company in the field of telecommunications. To determine the arms' length price, the TPO & DRP took Infosys Technologies as a comparable. On appeal by the assessee, the Tribunal (included in file) held that the assessee was not comparable with Infosys as Infosys was a large and bigger company in the area of development of software and the profits earned by it cannot be benchmarked or equated with the assessee's results. One of the aspects pointed out by the Tribunal was that Infosys' turnover was Rs. 9,028 crores while that of the assessee was only Rs. 16.09 crores. On appeal by the department to the High Court, HELD dismissing the appeal:

 The Tribunal's findings that Infosys should be excluded from the list of comparables for the reason that (i) Infosys was a giant company and it assumed all risks leading to higher profits, whereas the assessee was a captive unit of the parent company and assumed only a limited risk and (ii) that the financial data (turnover) was not comparable has not been controverted by the Revenue. The Tribunal has given valid and good reasons for excluding Infosys as a comparable. 

S. 80-IB/80-IC: Subsidies that reduce the cost of production have a direct nexus with, and are "derived from", the industrial undertaking

CIT vs. Meghalaya Steels Ltd (Gauhati High Court)

 

The assessee set up an industrial undertaking which was eligible for deduction u/s 80-IB/ 80-IC. It received transport subsidy, interest subsidy, power subsidy and insurance subsidy pursuant to a scheme of the Government which was claimed to be eligible for deduction u/s 80-IB/80-IC. The AO & CIT(A) relied on Pandian Chemicals 262 ITR 278 (SC), Sterling Foods 237 ITR 579 & Liberty India 317 ITR 218 (SC) and rejected the claim on the ground that these subsidies were not "derived from" the undertaking as their immediate source was the Government's scheme and not the undertaking. However, the Tribunal allowed the claim on the ground that the subsidies reduced the corresponding expenses incurred and had a direct nexus with the manufacturing activities of the assessee. On appeal by the department to the High Court, HELD dismissing the appeal:

A subsidy given for the purpose of setting up of an industry is a capital receipt. A subsidy given for the purpose of operating an industry more profitably is revenue receipt. A distinction has to be drawn between a "non-operational subsidy" which does not relate to manufacture/ production and an "operational subsidy" which is intended to reduce the cost of manufacture/ production of the industrial undertaking. To determine whether the subsidy can be said to have been "derived from" the undertaking so as to be eligible for deduction u/s 80-IB & 80-IC it has to be seen whether there is a direct nexus between the said subsidy and the manufacturing process. A study of the schemes under which the said transport, interest, power & insurance subsidies were given shows that there were all intended to reduce the cost of production of the industrial undertaking. There is accordingly a direct nexus between the said subsidies and the profits of the industrial undertaking which is a "first degree nexus". The object of these subsidies is to increase profits and if they are taxed, the object will not be met. Liberty India 317 ITR 218 (SC) does not apply because the DEPB and Duty Drawback Schemes are "non-operational" incentives intended to encourage "export". DEPB and Duty Drawback is not provided as a means to reduce the cost of production of the industrial undertaking and so it has no nexus with the undertaking.

G20 backs corporate-tax overhaul.

The G20 has endorsed an OECD report that would revamp international corporate taxes and end the loopholes that enable major multinational corporations such as Starbucks (SBUX), Google (GOOG) and Apple (AAPL) to avoid paying large amounts of tax. A major target of the change is the practice of transferring profits from countries where they are generated into low or no-tax jurisdictions via internal company transactions.

Moody's more optimistic on U.S.

Moody's has affirmed the U.S.'s AAA rating and even raised the country's sovereign outlook to Stable from Negative, citing economic resilience relative to other AAA countries and "major reductions" in government spending growth.