TP - Mere dissatisfaction with factual findings of ITAT regarding selection of comparables after application of quantitative/qualitative filters cannot be contested u/s 260A: HC (See 'TOG Latest')I-T - Assessee is eligible to claim exemption u/s 54 where possession of flat held by him since date of allotment is handed over & capital gain is paid on transfer of property 'held': ITAT (See 'TOG Latest')Customs - Classification of imported goods cannot be decided based on internet search results when Department could have obtained expert opinion or technical write-up: CESTAT (See 'TOG Latest')Central Excise - Demands cannot be raised under rent-a-cab service where Department is unable to prove that vehicle was capital goods of assessee & was registered in its name: CESTAT (See 'TOG Latest')ISA - India to host first general conclave (See 'TOG News')New convention & expo centre to reflect economic progress: Modi (See 'TOG News')TP - When agreement between two resident companies does not provide for any markup on total cost then no addition is permitted by applying margin of international transactions: ITAT (See 'TOG Latest')I-T - If interest income does has no direct link with eligible business or business activity then it can be considered for deduction claimed u/s 80IB & 80IC: ITAT (See 'TOG Latest')Central Excise - Cenvat credit be availed on supplementary invoices rasing demand for 'royalty charges' & 'stowing excise duty', 'paryavaran upkar', 'vikas upkar', 'forest fee' & 'Entry tax': CESTAT (See 'TOG Latest')Service Tax - Extended period of limitation cannot be invoked where issue of taxability of commission received from banks was contested during period of dispute: CESTAT (See 'TOG Latest')Govt launches Swachhata Hi Seva campaign to promote cleanliness (See 'TOG News')Govt launches Swachhata Hi Seva campaign to promote cleanliness (See 'TOG News')Delhi Govt inks pact with Seoul for better infrastructure & public health (See 'TOG News')Govt launches star rating based on efficient energy use (See 'TOG News')DTAA - Tax Residency Certificate constitutes sufficient evidence for accepting status of residence as well as beneficial ownership for seeking treaty benefits: ITAT (See 'TOG Latest')I-T - Pre-deposit of duty demanded from cooperative institution can be waived off considering that its members come from marginal sections of society: ITAT (See 'TOG Latest')Customs - Duty exemption under Notfn No 46/2006-Cus can be denied where entire quantity of imported goods were not used to manufacture final product: CESTAT (See 'TOG Latest')Central Excise - Cenvat credit cannot be allowed on Outdoor Catering service which is utilized for personal use by employees & has no nexus with manufacture of final product: CESTAT (See 'TOG Latest')
Tax on Go
Budget 2015
Click the banner to download Documents


PNB may receive one-year period to provision against Rs 12k crores fraud
By TOG News Service
Mar 09, 2018

TOG News Service, NEW DELHI, MAR 09, 2018: THE Punjab National Bank (PNB) may receive a time period of four quarters, or one year, for making provisions against the country's biggest ever banking fraud of Rs 12,646 crore perpetrated by billionaire diamond trader, Mr Nirav Modi. In this regard, the bank had written to the Reserve Bank of India, seeking its opinion on making provisions for the fraud. Although there is a direction of the RBI on provisioning to be made in case of loan fraud, the bank is taking pre-emptive action to deal with extraordinary situation created by unearthing of this mega fraud. Since there is no precedence of fraudulent Letter of Undertaking (LoUs) issued earlier, the RBI may allow the PNB to make provision against the fraud, not exceeding over four quarters.

Last month, the PNB had lodged an FIR with the Central Bureau of Investigation (CBI), stating that fraudulent LoUs worth Rs 280.7 crore were first issued on January 16 this year. At the time, the PNB had stated that it was digging into records to examine the magnitude of the fraud. In the complaint, the PNB had named three diamond firms, namely Diamonds R Us, Solar Exports and Stellar Diamonds, further stating that they had approached it on January 16 with a request for buyers' credit for making payment to overseas suppliers. The bank sought 100% cash margins for issuing LoUs for raising buyers' credit, which was contested by the firms saying they had availed of the facility from as early as 2010.

Mr Nirav Modi, his spouse, brother and co-accused Mr Mehul Choksi, are partners in Diamonds R US, Solar Exports and Stellar Diamonds, which has shops in foreign locations such as Hong Kong, Dubai, and New York. Also among those named is a deputy manager, Mr Gokulnath Shetty, who was posted at PNB's foreign exchange department in Mumbai since March 31, 2010. He had allegedly along with another official, Mr Manoj Kharat, fraudulently issued LoUs to these firms without following prescribed procedure or making entries in the banking system, avoiding detection of transactions.

Moreover in 2015, the Bank of Baroda had brought to light a scam in which two Delhi-based businessmen had cheated it of Rs 6,000 crores. Investigations had revealed major irregularities, as the forex transactions were done mainly via advance remittances for import, through newly-opened current accounts. Heavy cash transactions, stated to be about four or five in a day, were also noticed. Thereby, the Enforcement Directorate (ED), had proceeded to arrest the businessman duo under money laundering provisions.

In the present case, the CBI had registered a fresh case against Mr Nirav Modi in connection with the alleged fraud in credit facilities extended by Punjab National Bank, causing a loss of Rs 321 crores to it. Such action was taken on a complaint by the bank on March 4. The CBI has named Mr Modi, then president (finance) of M/s Firestar Diamonds International Limited, Mr Vipul Ambani, chief finance officer Mr Ravi Gupta, along with other directors and officials of the company, apart from unidentified public servants of the bank. This would be the second CBI FIR in which Modi has been named.