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Case Laws
Showing 201 to 220 of 231 Records
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1989 (4) TMI 32 - PUNJAB AND HARYANA HIGH COURT
Accounting, Business Expenditure ... ... ... ... ..... ssessee (i) Kalinga Tubes Ltd. v. CIT 1988 169 ITR 374 (Orissa) and (ii) Shalimar Chemical Works Pvt. Ltd. v. CIT 1987 167 ITR 13 (Cal), Both the cases are distinguishable. The first was the case of additional liability. According to the view taken in the second case, the crucial date for claiming deduction would be the date when the writ was decided. In this case, the writ petition was decided during the period relevant to the assessment year 1976-77 and, therefore, deduction had to be claimed in that year and not in the year in question. The second case, if at all, helps the Revenue. For the reasons recorded above, it is clear that the Tribunal erred in law in allowing the deduction of Rs. 2,35,538, which was payable for the periods relevant to the assessment years 1975-76 and 1976-77, during the proceedings for the assessment year 1977-78. Accordingly, we answer the referred question in favour of the Revenue, in the affirmative, leaving the parties to bear their own costs.
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1989 (4) TMI 31 - PUNJAB AND HARYANA HIGH COURT
Business Expenditure, Directors, Entertainment Expenditure ... ... ... ... ..... any cannot act in its own person but has only to act through directors who qua the company have the relationship of an agent to its capacity. In this case, no material was placed on record to show that the directors-cum-employees attended the meetings not as directors but as employees. To limit the expenditure for such matters, sub-section (2A) was enacted placing a ceiling on the expenditure to be allowed. Accordingly, we are of the opinion that none of the three statutory authorities considered the facts of the case on the basis of the correct legal position and we answer the referred question in favour of the Revenue in the affirmative, to the effect that the expenses incurred for providing refreshment at the meetings of the directors of the Corporation would be covered by section 37(2A) of the Act, even if the directors were the employees of the Corporation and the Tribunal was not right in rejecting the Revenue s contention. The parties are left to bear their own costs.
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1989 (4) TMI 30 - MADRAS HIGH COURT
Income From Undisclosed Sources ... ... ... ... ..... assessee did not have the funds in her hands as claimed by her during the relevant assessment years, it is difficult to see how during those years, the amounts could have been assessed in the hands of the assessee as income from undisclosed sources. Rightly, therefore, as soon as the amounts surfaced in the shape of investment at the instance of the assessee, which was during the assessment year 1955-56, steps had been taken to include that amount as the income of the assessee from undisclosed sources. The Tribunal has misdirected itself in holding that there was some lapse on the part of the Officer. We may also observe that we are unable to uphold the finding of the Appellate Tribunal as reasonable one based on the facts and the circumstances of the case and on the materials made available. We, therefore, answer the second question referred to us in the negative and in favour of the Revenue. The Revenue will be entitled to its costs of this reference. Counsel s fee Rs. 500.
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1989 (4) TMI 29 - CALCUTTA HIGH COURT
Business Expenditure, Capital Gains, Disallowance, Gratuity ... ... ... ... ..... inant purpose or intention for incurring the expenditure is intimately connected with the carrying on of the business, the incidental advantage of the expenditure cannot affect the character of the expenditure and such expenditure should be allowed as revenue expenditure. In the instant case, a sum of Rs. 1,000 was paid for obtaining a legal opinion in connection with the shifting of the head office which, in our view, is for the purpose of carrying on the business and cannot, by any stretch of imagination, be held to be on capital account. For the reasons aforesaid, we are of the view that the Tribunal is right in holding that the legal expense pertaining to the transfer of its registered office is a revenue expenditure and should be allowed. We, therefore, answer the fourth question in the affirmative and in favour of the assessee. There will be no order as to costs. Leave is given to file the vakalatnama within a fortnight from date. BHAGABATI PRASAD BANERJEE J. -I agree.
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1989 (4) TMI 28 - MADRAS HIGH COURT
Deemed Gift, Gift Tax ... ... ... ... ..... ined that there was no gift at any time made by his father. Whether there was a gift within the meaning of the Act or not cannot be made to depend upon the view of the transaction taken by the son of the assessee, but it must rest on the definitions in the Act. Considering the manner in which the advances made by the assessee to his son have been treated in the accounts of the assessee and the writing off of the amounts eventually, we are of the view that the gift took place only when the assessee realised or abandoned the debt within the meaning of section 4(1)(c) of the Act and that was on February 5, 1972, and not at an earlier point of time. We, therefore, hold that the Tribunal was in error in the view it took that the advances made by the assessee to his son should be treated as gifts in the years in which they were made. We answer the question referred to us in the negative and in favour of the Revenue. The Revenue will be entitled to its costs. Counsel s fee Rs. 500.
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1989 (4) TMI 27 - CALCUTTA HIGH COURT
Advance Tax, Interest Payable To Assessee ... ... ... ... ..... f determining the tax due on regular assessment, cannot ignore such payment, then for the purpose of calculating interest also, such payment cannot be kept out of consideration. Even otherwise, in view of the reference to the date from which interest is to be calculated, namely, 1st April next following the financial year in which the advance tax was payable, that tax must be given credit for in calculating the a mount of interest. Any payment made prior to 1St April, i.e., before the commencement of the relevant assessment year, has to be taken into account. For the reasons aforesaid, we are of the opinion that the assessee is entitled to interest if the conditions stated in section 214 are satisfied even though the assessee might not have paid the advance tax by instalments on the due date(s). We, therefore, answer the question referred to this court in the affirmative and in favour of the assessee. There will be no order as to costs. BHAGABATI PRASAD BANERJEE J. -I agree.
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1989 (4) TMI 26 - ANDHRA PRADESH HIGH COURT
Capital Gains, Exemptions ... ... ... ... ..... r possible, unless prevented by the express language of any section or compelling circumstances of any particular case, make a benevolent and justice-oriented inference . . . Learned standing counsel brought to our notice certain decisions rendered under sections 184 and 185 of the Income-tax Act and stressed the principle thereof, viz., inasmuch as the said provisions confer a benefit upon the assessees, the assessees must strictly comply with the conditions prescribed in that behalf, if they wish to avail of the benefit. There can be no quarrel with the said proposition. We do not, however, see how the said principle should induce us to construe section 54E(1) in a manner which leads to an absurd or impossible situation, and which situation was, in fact, recognised by Parliament and provided for by enacting the second proviso thereto. For the above reasons, we answer the question referred in the affirmative, i.e., in favour of the assessee and against the Revenue. No costs.
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1989 (4) TMI 25 - MADRAS HIGH COURT
Offences And Prosecution, Prima Facie Case, Wilful Attempt To Evade Tax ... ... ... ... ..... e provisions of the SAFEMA, a six-year limitation has been prescribed for forfeiture of properties. Commencement of proceedings and forfeiture of properties long after their acquisitions is bound to adversely affect and prejudice the person proceeded against. His memory may fade out and the evidence of the acquisition of the asset may also no longer be available. The position becomes more indefensible when the present holders are required to explain the sources of acquisitions made long back by their ancestors. It also adversely reflects on the working of the office of the Competent Authority. As noted by my learned brother, having received the report from the concerned Income-tax Officer in 1980, for no explainable reason, the Competent Authority did not proceed with the matter and allowed the proceedings to just hang on for over seven years. Such like inaction and delay, apart from dereliction of duty and responsibility enjoined under the Act, unnecessarily raise suspicion.
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1989 (4) TMI 24 - CALCUTTA HIGH COURT
Failure To Disclose Fully And Truly, Reassessment ... ... ... ... ..... e that on the basis of the materials in his hands he had come to hold a belief that any income of the assessee had escaped assessment. But, in the instant case, as we have already indicated, the Tribunal, on the facts before it, found that there were materials before the Income-tax Officer to hold that income had escaped assessment in the original assessment by reason of omission and/or failure on behalf of the assessee to disclose fully and truly all material facts and, accordingly, the proceedings under section 147(a) were validly initiated within the time prescribed. For the reasons aforesaid, we are of the view that, apart from the fact that the question referred to us is essentially a question of fact, even on merits, we are in complete agreement with the reasoning and conclusion of the Tribunal. We, therefore, answer the question in this reference in the affirmative and in favour of the Revenue. There will be no order as to costs. BHAGABATI PRASAD BANERJEE J. -I agree.
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1989 (4) TMI 23 - GAUHATI HIGH COURT
Appeals, Registered Firm, Return ... ... ... ... ..... ed by it beyond the time allowed, regard being had to the fact that payment of interest is only compensatory in nature. As the entire amount of tax was paid by way of advance tax, it was observed that the question of payment of any compensation did not arise. In so far as the case at hand is concerned, the tax assessed by the Income-tax Officer was Rs. 8,842 whereas a sum of Rs. 16,970 had been deducted at source. In this view of the matter, nothing had remained to be paid by the assessee in so far as the assessment year in question is concerned. Section 139(8)(a) read with Explanation 2 makes it clear that interest can be levied on the amount of tax determined payable as reduced by any tax paid and any tax deducted at source. In the present case, as deduction of tax was more than the amount found due, nothing was left on which to calculate interest. In view of the above, we answer question No. (ii) in the affirmative, i.e., against the Revenue and in favour of the assessee.
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1989 (4) TMI 22 - CALCUTTA HIGH COURT
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... ... ..... ve is wholly in excess of the amount that may be reasonably necessary for meeting the known or existing tax liability and this excess is to be treated as a reserve and included in the capital computation. We answer the common question for the assessment years 1973-74 and 1974-75 in the affirmative to the extent as above and in favour of the assessee. The second question, so far as it concerns the Reserve for doubtful debts and advances , cannot be answered as there is no finding whether the amount set apart under this head is in excess of what may be reasonably necessary to meet a known or expected liability. We remand the matter to the Tribunal to be disposed of in accordance with the principles laid down by the Supreme Court in Vazir Sultan Tobacco Co. Ltd. s case 1981 132 ITR 559 and subsequent decisions of the Supreme Court on this issue. The Tribunal will, if necessary, call for further evidence in this matter. No order as to costs. BHAGABATI PRASAD BANERJEE J.-I agree.
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1989 (4) TMI 21 - CALCUTTA HIGH COURT
Company, Surtax ... ... ... ... ..... id judgment rendered by this court in Schrader Scovill Duncan Ltd. 1981 132 ITR 822. Distributors (Baroda) P. Ltd. 1985 155 ITR 120 (SC), has only emphasised that relief from the dividend from a domestic company will be allowed after such dividend is computed in accordance with the provisions of the Act. But there is no dispute that the net dividend is includible in the total income and from such dividend relief will be allowed by way of deduction. For the reasons aforesaid, we answer this question in this reference in the affirmative and in favour of the assessee. There will be no order as to costs. It is stated by Miss. M. Seal that the name of the company has since been changed to Britannia Industries Ltd. Let this change be recorded and amendment be effected in the statement of case and in the paper book accordingly on a signed copy of the minutes of this order. Let the Department act on the signed copy of the minutes of this order. BHAGABATI PRASAD BANERJEE J. -I agree.
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1989 (4) TMI 20 - PUNJAB AND HARYANA HIGH COURT
Co-operative Society, Exemptions ... ... ... ... ..... exempt from levy of income-tax and such income is to be deducted in computing the total income of the assessee. We follow that view. As regards the second point regarding receipt of subsidy, in Ludhiana Central Co-operative Consumers Stores Ltd. v. CIT 1980 122 ITR 942 (P and H) and V. S. S. V. Meenakshi Achi v. CIT 1966 60 ITR 253 at 260 (SC), it has been held that the character of the receipt is to be considered and if a subsidy was given towards the purchase price of foodgrains, it will partake of the character of the purchase price being reduced by the amount of subsidy with the result that the income will go up by the amount of the subsidy. Even if the income of the assessee goes up by Rs. 40,000, since this relates to the sale and purchase of agricultural produce from its members, this would also be deducted while computing the total income of the assessee. For the reasons recorded above, we answer the question in favour of the assessee and in the affirmative. No costs.
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1989 (4) TMI 19 - MADRAS HIGH COURT
Accounting, Application For Reference, Income ... ... ... ... ..... ring the latter part of the question for the opinion of this court. In so far as the first part of the question referred is concerned, we are of the view that the same basis has to be adopted for receipt and payment of interest and having regard to the mercantile system of accounting adopted by the assessee during the relevant years in question, the assessee cannot be permitted to adopt mercantile basis for the payment of interest by it and claim the benefit of the cash system in respect of the interest receivable by it. We, therefore, hold that the Tribunal was quite right in the view it took that the amounts of Rs. 14,763, Rs. 15,228 and Rs. 16,428 were chargeable to income-tax. We, therefore, answer the first part of the question referred to us in the affirmative and against the assessee. The second part of the reference is returned unanswered as that part of the question could not have been referred at all for the opinion of this court. There will be no order as to costs.
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1989 (4) TMI 18 - MADRAS HIGH COURT
Reassessment ... ... ... ... ..... Act. We are, therefore, of the view that the reopening of the assessment was not the outcome of a mere change of opinion on the part of the successor-officer, but owing to his having come into possession of information with reference to the erroneous allowance of the losses claimed by the assessee during the assessment years in question while finalising the assessment for the year 1970-71. The question whether section 10(27) of the Act would apply or not, has been remitted for investigation and the assessee has also been given an opportunity of placing such evidence as it may have in support of its stand. We, therefore, hold that on the facts and in the circumstances of the case, section 147(b) of the Act was properly invoked and the Tribunal was right in the view it took on that question. We, therefore, answer the question referred to us in the affirmative and against the assessee. The Revenue will be entitled to the costs of this reference. Counsel s fee Rs. 500 (one set).
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1989 (4) TMI 17 - MADRAS HIGH COURT
Controlled Company, Estate Duty, Property Deemed To Pass, Slice Rule ... ... ... ... ..... (2) of the Act can not be ascertained and treated as deemed to have passed, the whole of the assets of the company should be regarded as deemed to have passed. deeming provision like that found in section 17(1) and (2) of the Act cannot lend itself to the interpretation suggested by learned counsel for the Revenue. We, therefore, hold that the Tribunal was quite right in the view it took that the slice rule cannot be worked out, and, accordingly, nothing passed and that proviso (a) to section 17(2) of the Act is limited in its operation to the ascertainment of the aggregate net income of the company in the three years ending with the death of the deceased in cases where there is income in one or more years and loss in another or others, and the result is a net income and not a loss, as in this case. We, therefore, answer the question referred to us in the affirmative and against the Revenue. The assessee will be entitled to the costs of this reference. Counsel s fee Rs. 500.
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1989 (4) TMI 16 - KERALA HIGH COURT
Offences And Prosecution, Prima Facie Case, Wilful Attempt To Evade Tax ... ... ... ... ..... . The assumption of management by the Collector under section 37 of the Revenue Recovery Act after attachment of the properties under section 36 of the Act cannot, therefore, be assailed. It is also open to the State to bring the properties to sale for recovery of the amounts due from the petitioner other than the agricultural income-tax due from him for the years 1977-78 to 1981-82 which is yet to be determined by the first respondent afresh. For the aforesaid reasons, we quash the assessment orders, exhibits P-8(a) to P-8(e), and the revisional order, exhibit P-13, and direct the first respondent, the Agricultural Income-tax Officer, Nedumangad, to pass fresh orders of assessment in the light of the observations and directions contained in this judgment after affording the petitioner sufficient opportunity to substantiate his objections to the pre-assessment notice served on him. The writ appeal is allowed as indicated above. The parties will suffer their respective costs.
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1989 (4) TMI 14 - DELHI HIGH COURT
Advance Tax, Business Expenditure, Entertainment Expenditure ... ... ... ... ..... ssee estimated the advance tax liability as on June 13, 1972, at Rs. 5,25,000. Subsequently, on October 7, 1972, it estimated the advance tax liability at Rs. 7,50,000. The accounting year came to a close on October 31, 1972. The Tribunal has found as a fact that there was no underestimation of advance tax. In CIT v. Nagri Mills Ltd. 1987 166 ITR 292, the Gujarat High Court held that no interest is chargeable under section 216 as the Income-tax Officer had failed to record a finding that there had been an underestimate by the assessee and, consequently, no question of law arose. In the present case, as abovementioned, the Tribunal came to a categorical finding that there is no underestimation. This is a finding of fact and, consequently, no question of law arises out of the order of the Tribunal. We, therefore, decline to direct the Tribunal to refer question No. (ii). The application is partly allowed. However, in the circumstances of the case, we make no order as to costs.
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1989 (4) TMI 13 - DELHI HIGH COURT
Business Expenditure, Commission ... ... ... ... ..... in all subsequent years . The Revenue appealed to the Tribunal. The Tribunal relied on the reasoning of the Commissioner of Income-tax (Appeals) which it set out in detail in its order and upheld the deletion of Rs. 15,35,411. The Revenue then filed an application under section 256(1) of the Act. The, application was rejected noticing that the reasoning of the Commissioner of Income-tax (Appeals) was on a proper appreciation of the facts and law, and that this could not be said to give rise to any question of law. It would appear to us that the finding of the Tribunal based on the reasoning of the Commissioner of Income-tax (Appeals) with regard to the change in the system and method of valuation of the closing stock, is finding of fact. Consequently, no question of law arises and we are not inclined to require the Tribunal to refer question No. 2 also. The application is accordingly dismissed. However, in the facts and circumstances of the case, we make no order as to costs.
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1989 (4) TMI 12 - CALCUTTA HIGH COURT
Company, Deduction, Other Sources ... ... ... ... ..... Appellate Assistant Commissioner held that part of the expenses could be allowed as business expenditure. The finding of the Tribunal is that the expenditure was reasonable on the facts of this case and that it was wholly and exclusively laid out for the purpose of business. Although there may be disagreement as to whether the expenditure was for the purpose of business as no contention was raised before the Tribunal that the assessee only derived lease rent which could not be termed as business activity, there cannot be any dispute that it was wholly and exclusively laid out or expended for the purpose of making or earning the income. We are of the view that on the facts of this case, the Tribunal came to a correct conclusion regarding the allowability of the expenditure in question. In the result, we answer the question in this reference as reframed in the affirmative and in favour of the assessee. There will be no order as to costs. BHAGABATI PROSAD BANERJEE J. -I agree.
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