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Issues:
1. Notice issued under section 273 of the Income-tax Act, 1961 for furnishing inaccurate advance tax estimates. 2. Contention of the assessee regarding the nature of certain receipts as capital or revenue. 3. Disallowance of certain expenses and municipal taxes by the revenue. 4. Satisfaction required for issuing a notice under section 273 and the prima facie nature of such satisfaction. Analysis: The judgment by the High Court of Calcutta, delivered by Justice Sabyasachi Mukherjee, dealt with a case where a notice was issued under section 273 of the Income-tax Act, 1961, to the petitioner for allegedly furnishing inaccurate advance tax estimates. The petitioner had initially estimated an income of Rs. 10,00,000, which was later revised to Rs. 7,00,000. Subsequently, the petitioner filed returns showing varying incomes, including exclusions of certain receipts contended to be not taxable as capital receipts. The revenue, however, treated these receipts as taxable revenue receipts. The petitioner argued that there was no basis for the notice as the estimates were filed based on the belief that the excluded amounts were capital receipts. The court emphasized that the satisfaction required for issuing a notice under section 273 is tentative and prima facie, allowing for an inquiry into the accuracy of the estimates. The court referenced a previous judgment to highlight that the presence of materials for tentative satisfaction is crucial, considering the facts and circumstances of each case. In this instance, the court found that the auditors had advised the petitioner that the disputed receipts were revenue receipts, and thus, there were sufficient materials for tentative satisfaction to justify the issuance of the notice. The court also addressed the disallowance of certain expenses and municipal taxes by the revenue, noting the petitioner's contention that the correct estimates were filed excluding items believed to be capital receipts. The court highlighted the importance of assessing whether there were materials to support the revenue's actions in disallowing these expenses and taxes. Ultimately, the court dismissed the petitioner's application, stating that there were adequate materials for tentative satisfaction by the Income-tax Officer to initiate an inquiry into the accuracy of the advance tax estimates. The rule nisi was discharged, and the interim order, if any, was vacated, with no order as to costs. A stay of operation of the order was granted for four weeks.
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