Income Tax raids 20 premises of Indiabulls

The searches were carried out under the supervision of the Directorate of Income Tax , Investigation Unit in Mumbai.

Suspecting tax evasion by real estate giant Indiabulls, the Income Tax Department Wednesday carried out raids at 20 premises of the company in Mumbai and New Delhi, in an operation involving nearly 1,000 I-T officers.

According to sources, the raids — one of the biggest conducted in recent times by the central agency — commenced at 8 am on Wednesday and continued through the day.

The raids were carried out at the offices of Indiabulls Housing Finance, Indiabulls Ventures and Indiabulls Real Estate.

The searches were carried out under the supervision of the Directorate of Income Tax , Investigation Unit in Mumbai. The raids were carried out at the offices of Indiabulls Housing Finance, Indiabulls Ventures and Indiabulls Real Estate.

“Maximum officers were roped in to conduct searches at the company’s Mumbai office at Indiabulls Finance Centre in Elphinstone. Documents and hard discs have been seized,” a senior official told The Indian Express. “The seized documents would be studied for unaccounted money as we suspect that they are not making the rightful declaration. These papers could help unearth unaccounted cash,” the official said.

Shares of the Indiabulls group companies fell in the range of 8 to 10 per cent after the news of the raids broke.

In a statement, Indiabulls said, “This morning, officials of the I-T department came to some of our offices to check our books, in the normal course. We are extending all assistance to the team of officials. We are confident that the officials will find our corporate practices and books satisfactory.”

“At Indiabulls group, we follow the ethical and legal standards of the highest order in all our businesses and have robust institutional measures to monitor as well as implement corporate governance of the highest standards. We are confident that these on the spot checks, in the normal course, will vindicate the same. We further state that there is no information which has not been announced to the Exchanges under Regulation 30 of SEBI (LODR) Regulations, 2015,” it added.

Last time, Indiabulls ran into controversy when the Maharashtra Anti-Corruption Bureau (ACB) probed the sponsorship by one of its group companies, Indiabulls Realtech Ltd, to arrested NCP leader Chhagan Bhujbal’s Public Welfare Foundation Trust for organising the Nashik Festival.

Credit : http://indianexpress.com/

‎AREA Group‬ rocked Lonavala this Monsoon

‎AREA Group‬ rocked Lonavala this Monsoon

Kotak Mahindra's PE fund to raise fund of $300-350 million from global institution investors

A soft launch is an exercise where the fund managers reach out to prospective investors to gauge the investment sentiment before sending a formal offer.

MUMBAI: Kotak Mahindra's private equity fund is all set to raise its new fund of $300-350 million. The fund manager has hired placement consultant Guy Eugene to raise the money from global institutional investors, said three people with direct knowledge of the matter.

Kotak PE, led by Nitin Deshmukh, has been investing in Indian mid-market companies that are looking to raise growth capital.

"The fund's soft launch has already happened and a formal process will begin soon," said a person with knowledge of Kotak's fund raising plans.

A soft launch is an exercise where the fund managers reach out to prospective investors to gauge the investment sentiment before sending a formal fund raising offer.

"The $300-350 million fund will follow the hypothesis that was adopted by the initial funds," said another person privy to the group's plans.

Kotak Mahindra Group launched its alternative assets business in 2005 with different vehicles made to invest in pure play private equity, real estate and infrastructure, special situations and an equities fund. Till now, the group has invested a total of $2.5 billion across these asset classes.

Although Kotak PE has a strong track record and a good mix of portfolio, raising money in a tough environment, where global institutional investors are shying away from investing in Indian market, is going to be challenging.

"The fund has hired global placement consultant Guy Eugene to help it raise funds," said the third person with knowledge of the fund raising.

Such placement agents or firms help a fund manager connect with prospective global institutional investors and raise a fund faster. Besides, these agents help fund managers with structuring the fund and access the global investors who are looking at investing in these asset classes.

The spokesperson for Kotak Mahindra Group did not respond to an emailed query. Nitin Deshmukh, managing director of the PE fund, did not reply to calls and text messages sent on his phone.

The fund is reaching out to European family offices, Japanese and US-based institutional investors, sovereign wealth funds and global pension funds to invest in the new fund, said sources.

Global investors are now backing only fund managers with a track record and hence the funds that are on the road to raise funds have to show returns by making successful exits.

Kotak PE has so far invested in companies such as Manipal Hospitals, Intas, NATCO, Rubicon, Metahelix, Mahindra Aerospace, NSE, MCX, BVG, Bharat Serums & Vaccines, Muthoot Finance, Godrej Consumer, ING Vysysa, Novalead, Home Town and Sabare among others.

Data shows that though the total number of funds investing in India today has gone down, the total assets under management has risen steadily.

Credit : http://realty.economictimes.indiatimes.com/

Power shifts from builders to buyers

Recently, courts have ignored agreements between developers and purchasers, and awarded compensation to the latter

The buyer-builder relationship has always been in favour of the latter. From booking of property to possession, builders had an upper hand because of one-sided agreements. For example, before giving possession, developers make buyers sign a document that states flat owners have inspected everything and the house is delivered according to the agreed specifications. This leaves little scope for buyers to challenge discrepancies in the court.

This seems to be changing. The judiciary has started going beyond the technicalities of the agreements and awarding compensation to buyers. "Courts realise the buyer is made to sign such documents. In some cases judges have rejected one-sided agreements, these citing them as unfair trade practices," says Hitesh Jain, senior partner at ALMT Legal.

In a recent case, the National Consumer Disputes Redressal Commission (NCDRC) asked a real estate major to pay buyers compensation at the rate of 12 per cent a year for delay in delivery of flats, overruling the builder-buyer agreement that had set the rate at a mere 1.8 per cent a year. NCDRC said any unfair trade practice can be challenged by it, even if there is a prior agreement between the parties. "The best part is that if the apex consumer court, NCDRC, passes such an order, it's binding on the lower courts," says Shirish Deshpande, chairman of Mumbai Grahak Panchayat.

"Earlier, whatever was written in the builder-buyer agreement was held sacrosanct. Courts generally did not intervene in these agreements, since they were signed by two consenting adults. But, since buyers dragged DLF to the Competition Commission of India (CCI), things changed," says Sanjay Sharma, managing director, Qubrex Realty. CCI found DLF the dominant party in the agreement. So, the terms and conditions of the agreement were not held as sacrosanct. Consumer courts started using this line of thought and applied it more widely in builder-buyer cases.

Litigation on the rise

Such orders are increasingly motivating property buyers to approach the courts. Swapnil Vaghambre another flat buyer, Amul Gurav, led 54 others to file a consumer case against Saaga Infra Projects. "We went to the police, too. But, it was cumbersome, so we resorted to the judiciary," says Vaghambre. These buyers had booked a flat at Saaga Infra's Malad East project, paying 30 per cent (between Rs 13 lakh and Rs 20 lakh) as the token amount in 2013. For two years, work didn't commence. The developer kept saying he was waiting for approvals. When these buyers cancelled their bookings in 2015, the developer didn't return the money.

The number of housing-related cases is on the rise in consumer courts. "It's not only because consumer awareness is on the rise but also as cases of delays, defaults and cheating by developers are increasing," says Deshpande.

In past six months, since January, 2,041 cases have been filed for housing-related issues with NCDRC. This is close to the number of complaints it received in 2015. There were 2,495 housing-related cases in the past calendar year, 1,063 in 2014 and a mere 104 in 2013, according to government data.

Insurance-related complaints always topped the charts at NCDRC. Since last year, housing-related complaints have jumped exponentially, displacing insurance from the top spot.

Problem areas

Developer-buyer issues could only get worse if one looks at the number of unsold units. According to data from property research firm Liases Foras, unsold stock grew 22 per cent in India's eight big cities compared to last year. "With the growth in unsold stock outpacing growth in sales, inventory across eight major cities stands at a whopping 42 months, a rise of 13 per cent in one year," according to a recent Liases Foras report on the residential real estate market. An efficient market maintains eight to 12 months of inventory.

Developers have been grappling with slow sales and rising inventory since 2008, after the global financial crisis. Things are getting worse every year, as buyers stay away and regulations become stringent. Construction delay is most common grouse that buyers have. In courts, developers usually put the blame on the myriad approvals they to obtain from state and central agencies and ministries. Anuj Puri, chairman and country head, JLL India, says while all this is true there's another side to the picture. "Many developers have in the past intentionally undertaken a slower pace of construction if sales in their project were sluggish or a larger part of the project remained unsold. They might have diverted a sizeable chunk of the revenue generated from pre-launch sales to another project, or utilised it to pay off a pressing bank debt," says Puri.

Other cases that are filed are for poor-quality construction and deviations. "A change in the apartment area after buying from the developer can occur if a change in project plan is necessitated due to a design or approval issue. A deviation of up to 10 per cent is usually acceptable - for a higher deviation, a customer must definitely seek legal recourse," says Puri. He also points that there are times when deviations can also happen due to abrupt changes in regulations.

Then, there are cases where developers promise the moon to the buyer but on delivery, the consumer realises the builder has cut corners. "When a developer is in a hurry to sell, mis-selling is bound to happen," says Sunil Rohokale, Managing Director, ASK Group.

Real estate regulator

Experts believe once the states implement the Real Estate (Regulation and Development) or Act, things will change further in favour of the consumer. "This Act addresses most of the issues consumers face today. Once implemented, only those developers who can play by the rules will survive," says Rohokale. It becomes mandatory for developers to register their projects and they must disclose accurate information it - about the status of land acquisition and statutory approvals, layout plan, etc. The buyer will get what is promised. It also mandates that 70 per cent of the money raised from sales in a project will have to be put in an escrow account, so that the money is not diverted. This could stop delays and if these still happen, the penalties are not lopsided. It will also reduce the one-sided agreements developers opt for. "The Act maintains a balance between buyers' as well as developers' requirements, to create a level-playing field," says Rohokale.

With a sensitive judiciary and the years of malpractices that prevailed in the property market could finally diminish but experts say this will happen only gradually.

RECENT JUDGMENTS GIVE HOPE

Our association members had booked flats in a Gurgaon project that was launched in 2010. Even before getting a licence from the local authority to operate, the developer advertised the project and took bookings, which is illegal.

In 2013, the developer asked buyers to pay extra, as he was increasing the flat size. Five of us told him to give us possession first and we will pay more if his claims turn out to be true. He cancelled our allotments. Of the Rs 50 lakh paid to him, he offered to return only half. We refused.

Finally, some buyers got together and formed Universal Aura Welfare Association. More individual joined us and there are around 100 members now.

In 2014, we went to the National Consumer Disputes Redressal Commission. Since then, there has been no construction activity at the site.

We have spent more than Rs 10 lakh fighting the case, in addition to paying EMIs on home loan. Our next court date is in January 2017, almost three years after we filed the case. Until now we were fighting in the court to get our case admitted. The recent judgements have given us hope, although our court experience has not been good until now.

Naveen Arora
General Secretary, Universal Aura Welfare Association

Credit : http://www.business-standard.com/

10 Ways Your Real Estate Agent Is Like Your Mother

1. She makes you clean your room.

When selling your home, the overall first impression is most important to prospective buyers. Don’t be surprised if your agent reminds you to tidy up before showings, make your bed, and not stuff your dirty laundry in the closet like you did when you were a teenager.

2. She takes your calls late at night.

No matter your age, clients are like agents’ babies and their nurturing instincts kick in when she sees a call come in late at night. She will most likely ask you if everything is OK before you even have a chance to speak.

3. She worries about you when you don’t respond to her many calls, texts, and emails.

You can’t hide from your Mom OR your real estate agent! Remember when you went away to college or worked a late night job, and your mom always wanted you to check in with a quick phone call from time to time? Remember how she’d think the worst when a day would pass after you didn’t return her call and she was seconds away from calling hospitals to make sure you weren’t there? Your agent is wired the same way, so just communicate to prevent any possible panic attacks, ok?

4. She teaches you how to save your money, set a budget, and help you stick to it.

Your mom taught you the value of a dollar when she paid you allowance, and an extra fifty cents to take out the garbage was an exciting bonus! She probably also helped you budget and explained taxes and savings when you started working a real job. You’re an adult now, so your mom probably doesn’t want to be seen as a nuisance meddling with your personal finances… but your agent doesn’t mind!

Your agent wants you to know all the costs associated with any home sale or purchase, and has your best interests in mind. When you want to see homes $50K out of your budget, she’ll reel you back into reality and coach you along the way to find a home you will love—and that you can afford.

5. She makes you do your homework.

Yes, you have homework when you’re buying a home. You’ll want to drive by any homes that interest you. You’ll want to survey the neighborhood, the convenience to schools, shopping and your workplace, and the overall curb appeal. Just like your mom reminded you to study before an exam, your agent will remind you that online photos don’t show everything and you should really check out the area first.

6. She’s a good listener.

Your mom always has time for you and will listen to you whine, complain, and share fears and excitement; she’s always there for you when you need an ear. Your agent is too, and the more you share with her, the better she will understand what you want and need, whether it’s selling or buying a home. Both mom and agent always want the best for you.

7. You drive her to drink.

Why do you think your mom always had her favorite coffee mug that wasn’t full of coffee, and a nice wine collection on display with no dust on the bottles? Or why she brought a thermos to all of your Little League games in the heat of summer? Your agent has the same mug, same wine collection, and same thermos with your name written all over ‘em. Although both have your best interests at heart, there are times that you can be quite a challenge.

8. She drives you around and not ask for gas money.

Mothers log hundreds of miles on their cars driving to and from baseball practice, dance lessons and competitions, after-school functions, summer camp, and to and from the doctor every time you had an ear infection or strep throat. Agents log even more miles, and they enjoy it because it allows quality time to discuss your home-buying wants and needs, hopes and dreams, and occasionally a chance to rock out together when a good jam comes on the radio.

9. She gives you tough love.

Mom kissed your boo-boos, and it broke her heart if you got hurt. But she didn’t hesitate to smack the back of your head if you did something stupid. She would hug you tight and smother you with kisses one minute, and the next be chasing you with a fly-swatter threatening to spank you when you acted up. Agents are the same way (minus the fly swatters), because they will tell you what you need to hear, and not always what you want to hear.

They’ll break bad news and console you when you didn’t get the house. They’ll also give you the figurative head-smack when you need to focus and stop making stupid decisions like buying a new car a week after getting pre-approved for a loan. Or putting off seeing a home that would’ve been perfect for you (and finding out the next day it had sold). Or not doing your homework and wasting an hour of time driving to a house that backs up to a power plant with the county jail next door. Just listen and do everything your agent advises, and all should be hunky dory.

10. She’s both happy and sad when you move on, but ultimately is proud to see you pursue your dreams and to have been part of the journey.

Moms go through “empty nest syndrome” when you leave home, and they cry and cry and miss you more than you can imagine when you’re gone. They know they’ll see you again, and they beam with pride when you leave for college. Or buy your first home. Or get married and move out. But they’re also so sad inside because they know you’re all grown up now and don’t need them as much anymore.

Real estate agents go through this too. After spending weeks or months with a client, bonding with them, creating memories, and sharing in their joy of buying or selling a home, all the phone calls and meetings end when the home closes and they’re no longer needed.

The best thing you can do to make each of them feel better is this:

Call your mom and remind her you love her, and send your agent referrals to remind her she was awesome!

Credit : http://lightersideofrealestate.com/

Real Estate Investment Trusts

Real Estate Investment Trusts (REITs) could become a reality now and the first listing is expected in the next 12 months as markets regulator SEBI has eased norms to attract realtors and investors. The relaxation is aimed at allowing these Trusts to invest more in under-construction assets and have a larger number of sponsors.

Introduction of REITs in Indian real estate market is likely to be a game-changer. A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and even timberlands. Created by the U.S. Congress in 1960,REITs were designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.

As of August 2014, India approved creation of real estate investment trusts in the country. The government and Securities and Exchange Board of India through various notifications is in the process of making it easier to invest in real estate in India directly and indirectly through foreign direct investment, through listed real estate companies and mutual funds. In the budget of 2014, Union Finance Minister Arun Jaitley has introduced a law for setting up of REITs. 

REIT is a trust that holds real estate assets like buildings, office premises, land banks, among others. The units or securities of REIT are required to be listed on a recognised stock exchange and it provides retail investors an opportunity to indirectly hold stake in real estate assets. India is yet to see a substantial interest with regard to REITs being set-up by real estate companies. One of the key reasons for this is the current income tax mechanism which provides for levy of Dividend Distribution Tax at SPV level on distribution of dividend to REIT.

Credit : http://www.thehansindia.com/