Benchmarks trade at the highest point of the day

Indian equity markets added gains and started trading firm hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip counters. The sentiments got some support after Moody’s Investors Service stated that India’s current account deficit is likely to remain low supported by declining oil prices but added that however a slow recovery in industrial output and investment would drag economic growth to 7% in the current fiscal. Traders were seen piling position in Bankex, Realty and Metal stocks while selling was witnessed in Consumer Durables and FMCG sector stocks. In scrip specific development, Sujana Towers was locked at upper circuit limit after the Competition Commission of India approved the proposed acquisition of Sujana’s tower business by Agarwal Steel Structures on a slump sale basis, saying the deal is not likely to have an adverse impact on competition. Elder Pharmaceuticals was trading in red extending yesterday’s fall triggered by the company’s disclosure of facing severe financial crunch.

On the global front, the Asian markets traded mostly in green, while the European markets were trading on optimistic note.  Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,650 and 25,200 levels respectively. The market breadth on BSE was negative in the ratio of 1234:1265 while 118 scrips remained unchanged.

The BSE Sensex is currently trading at 25239.68, up by 345.87 points or 1.39% after trading in a range of 24833.54 and 25239.86. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.08%, while Small cap index up by 0.28%.

The gaining sectoral indices on the BSE were Bankex up by 3.32%, Realty up by 3.22%, Metal up by 2.85%, Power up by 2.80% and Capital Goods up by 2.30%, while Consumer Durables down by 1.35% and FMCG down by 0.81% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 6.72%, GAIL India up by 5.70%, BHEL up by 5.50%, ICICI Bank up by 4.55% and Vedanta up by 4.00%.

On the flip side, Hindustan Unilever down by 3.07%, Dr. Reddy’s Lab down by 1.00%, Cipla down by 0.89%, Lupin down by 0.65% and Sun Pharma down by 0.33% were the top losers.

Meanwhile, the Central Board of Direct Taxes (CBDT) has issued guidelines for compounding of offences under Income Tax Act, 1961/Wealth Tax Act, 1957, in cases of persons holding undisclosed foreign bank accounts/assets. CBDT has issued directions to all field formations, including principal chief commissioners, chief commissioners and principal DGs Income-Tax, to compound cases, where an assessee has cooperated fully or partially and paid taxes. The matter was examined in consultation with the Special Investigation Team (SIT) on black money.The compounding exercise will cover cases of Indians, who have bank accounts in HSBC Geneva, Liechtenstein-based LGT Bank and banks based in the British Virgin Islands.

According to the compounding guidelines, the cases in which the assessee has admitted accounts/assets either fully or partially, paid taxes and penalty or cooperated with the department may be considered for compounding only after filing the complaints ,as per the guidelines dated 23.12.2014. CBDT had further clarified with respect to guidelines dated 23.12.2014 that offences may be compounded by the authority on its satisfaction of the eligibility conditions and keeping in view factors such as conduct of the person, nature and magnitude of the offence and facts and circumstances of each case. As per the eligibility conditions for compounding, if the person has paid outstanding tax, interest, penalty, relating to the offence for which compounding has been sought, the person undertakes to pay the compounding charges including the compounding fee, the person undertakes to withdraw appeal filed by him, if any, in case the same has a bearing on the offence sought to be compounded.

Compounding guidelines issued on September 4 clarified that such cases can be compounded only after filing the prosecution complaints and shall not be compounded at the stage of show cause notice and/or without filing the complaint in the court. The CBDT has decided not to compound cases, where assessee has failed to cooperate

It further stated that prosecution instituted under Indian Penal Code, if any, cannot be compounded as per these guidelines. However, Section 321 of Criminal Procedure Code, 1973 provides for withdrawal of such prosecutions. Earlier, field formations had sought clarifications from CBDT whether offences relating to undisclosed foreign bank accounts/assets could be compounded as per the extant guidelines of the Board dated 23.12.2014. The CBDT had then presented new proposal to SIT investigating black money, which in August approved the proposal.

The guidelines highlighted that in the cases where the assessee has not admitted the foreign bank account (s)/assets and/or has not cooperated with the department in the assessment, penalty & recovery proceedings shall not be compounded. Furthermore, the CBDT also clarified that there is no provision for compounding of offences under the newly enacted Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Consequently, the above clarifications will not apply to cases coming under the purview of this Act. A panel set up by I-T authorities, which will include chief commissioner (central), director-general (investigation) and the commissioner of the zone where the case is being processed, will clear applications for compounding without any intervention by courts.

The CNX Nifty is currently trading at 7656.75, up by 97.95 points or 1.30% after trading in a range of 7539.50 and 7662.75. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 6.49%, Yes Bank up by 6.43%, GAIL India up by 6.21%, Bank of Baroda up by 5.57% and BHEL up by 5.38%.

On the flip side, Hindustan Unilever down by 3.26%, Cairn India down by 2.27%, Cipla down by 1.55%, Dr. Reddy’s Lab down by 1.08% and BPCL down by 0.78% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 8.23 points or 0.52% to 1,591.08, Taiwan Weighted increased 14.94 points or 0.19% to 8,001.50, Jakarta Composite increased 17.93 points or 0.42% to 4,319.30, Straits Times increased 36.8 points or 1.29% to 2,889.21, Shanghai Composite increased 90.03 points or 2.92% to 3,170.45 and Hang Seng increased 675.52 points or 3.28% to 21,259.04.

On the other hand, Nikkei 225 decreased 433.39 points or 2.43% to 17,427.08 and KOSPI Index decreased 4.54 points or 0.24% to 1,878.68.

The European markets were trading in green; UK’s FTSE 100 increased 78.68 points or 1.3% to 6,153.20, France’s CAC increased 70.54 points or 1.55% to 4,620.18 and Germany’s DAX increased 189.26 points or 1.87% to 10,297.87.