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Case Laws
Showing 81 to 100 of 177 Records
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1978 (4) TMI 97 - SUPREME COURT
Whether the High Court has erred in not properly interpreting the order of the Appellate Collector?
Held that:- A careful consideration of the facts and circumstances of the present case, we are clearly of the opinion that where an order passed in appeal vacates the order of the first Tribunal on purely technical grounds and expressly states that it was being passed without prejudice which means an order not on the merits of the case, such an order does not debar fresh adjudicatory proceedings which may be justified under the law. It is necessary for the court interpreting an order of this kind to give full and complete effect to the exact words used by the authorities and not to draw a sweeping conclusion merely from the fact that no explicit direction has been made by the appellate authority. We are unable to agree in this case with the High Court that as no express words were used in the order of the Appellate Collector remanding the case, the Assistant Collector was not justified in commencing fresh adjudicatory proceedings against the respondent - we allow the appeal, set aside the order of the High Court
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1978 (4) TMI 96 - ALLAHABAD HIGH COURT
Liability To Penalty ... ... ... ... ..... this decision is in conformity with the view that has appealed to us and the various High Courts mentioned above. The questions as referred to us do not bring out the true controversy. We accordingly reframe the questions as follows 1. Whether, on the facts and in the circumstances of the case, the return of income filed under section 139(4) be treated as a return filed within the time prescribed by section 139(1)? 2. Whether, on the facts and in the circumstances of the case, the assessee was legally liable to penalty under section 271(1)(a) ? We would, therefore, answer the first question in the negative, against the assessee and in favour of the department and the second question in the affirmative, in favour of the department and against the assessee. As the assessee was not represented, there will be no order as to costs. Let these answers and this opinion be transmitted to the Income-tax Appellate Tribunal under the signature of the Registrar and the seal of the court.
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1978 (4) TMI 95 - CALCUTTA HIGH COURT
Business Expenditure, Manufacture And Sale, Penal Interest ... ... ... ... ..... Aziz and Abdul Shakoor Bros. v. Commissioner of Income-tax 1961 41 ITR 350 has laid down the law on the point. An expenditure cannot be allowed for deduction unless it is a commercial loss in trade and a penalty imposed for breach of the law during the course of trade cannot be a business loss. if a sum is paid by an assessee conducting his business, because in conducting it he has acted in a manner which has rendered him liable to penalty, it cannot be claimed as a deductible expense. It must be a commercial loss and in its nature must be contemplable as such. Their Lordships were pleased to observe that infraction of the law is not a normal incident of business and, therefore, only such disbursements can be deducted as are really incidental to the business itself. In the premises, we overrule the contentions made on behalf of the assessee and answer the question in the negative and against the assessee. The parties will pay and bear their respective costs. DEB J.-I agree.
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1978 (4) TMI 94 - ALLAHABAD HIGH COURT
Assessment Notice, Assessment Order, Income Tax Act, Reassessment Notice ... ... ... ... ..... l Das 1976 103 ITR 437, the provisions of the Act in this respect depart from the normal rule that there should be finality about orders made in judicial and quasi-judicial proceedings. It is, therefore, absolutely essential that before such action is taken the requirement of the law should be satisfied. It was the bounden duty of the Income-tax Officer to have given a consideration to this aspect of the matter. In fact, the Income-tax Officer also acted without jurisdiction in seeking the approval of the Commissioner of Income-tax for starting the second reassessment proceedings on the basis of the two items which had been the subject-matter of decision in the earlier case. For all these reasons the writ petition succeeds and is allowed. The notice under section 147(a) of the Income-tax Act dated 29th August, 1973, is quashed. The respondents are restrained from taking proceedings on the basis of the said notice. The petitioner will be entitled to the costs of this petition.
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1978 (4) TMI 93 - ALLAHABAD HIGH COURT
Capital Or Revenue Receipt, Capital Receipt, Export Promotion, Import Entitlements, Income Tax Act, Sale Proceeds
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1978 (4) TMI 92 - MADHYA PRADESH HIGH COURT
AAC And Tribunal, Liability For Bonus, Mercantile System, Profits And Gains Of Business ... ... ... ... ..... for deduction under section 36(1)(ii) to that extent. The learned counsel for the assessee brought to our notice the decision of a Division Bench of this court in Commissioner of Income-tax v. Kalekhan Mohammad Hanif (Misc. Civil Case No. 54 of 1971, decided on 23rd June, 1973). That was a reference on identical questions in respect of the assessment year 1966-67. The difficulty felt by us on the point whether any legal liability was incurred by the assessee for payment of bonus was also felt by the learned judges who decided the reference. However, they overcame the difficulty by taking an assurance from the assessee that the amount of bonus as shown in the account books shall be paid to the workers. We do not think that it is possible for us to adopt that course. The better course, in our opinion, would be remand the case to the Tribunal. For the reasons given above, we decline to answer the questions and remand the case to the Tribunal. There shall be no order as to costs.
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1978 (4) TMI 91 - MADHYA PRADESH HIGH COURT
Capital Asset, Capital Gains Tax ... ... ... ... ..... s favourable to the taxpayer. Fourthly, when the Madras High Court in Commissioner of Income-tax v. Rathnam Nadar 1969 71 ITR 433, decided against the department, an appeal was taken to the Supreme Court, but the appeal was not pressed, although at the time when the matter came up before the Supreme Court the department could have relied upon the decision of the Gujarat High Court. Fifthly, in the matter of a taxing statute of all India application it is very necessary that there should be uniformity in its construction throughout the country as far as possible. Lastly, a reading of the decision of the Gujarat High Court shows that the decision on this point was clearly obiter. For all these reasons, we are of opinion that the transfer of a self-created or self-generated goodwill is not taxable under section 45. We answer the question referred to us in the affirmative, in favour of the assessee and against the department. There shall be no order as to costs of this reference.
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1978 (4) TMI 90 - ALLAHABAD HIGH COURT
Point Of Law, Return Filed Beyond Time ... ... ... ... ..... from doubt, it was not open to the Income-tax Officer to go into the true scope of the provisions of the Act in a rectification proceeding under section 154 of the Income-tax Act. This decision is directly applicable. Here, the question was whether, on a true construction of section 139(1), interest chargeable when an assessee had not applied for extension of time? On this question, there is a serious difference of opinion between the various High Courts in the country. The question was clearly a debatable one. In view of the principle laid down by our own High Court it cannot be said that there was an error apparent from the record, because the Income-tax Officer charged interest even though the assessee had not applied for extension of time in filing the return. Under the circumstances, we answer the question referred to us in the affirmative, in favour of the department and against the assessee. The Commissioner would be entitled to the costs which are assessed at Rs. 200.
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1978 (4) TMI 89 - ALLAHABAD HIGH COURT
Income Tax Act ... ... ... ... ..... ch is covered by the relevant clause in the Income-tax Act of 1961, entitling the trust to exemption. Since the Tribunal has not recorded any finding on the merits of the matter, we are unable to decide the question of law as it has been framed. In our opinion, the Tribunal should have proceeded to record the findings on merits and not merely followed its earlier decision. We have no option but to direct the Tribunal to rehear the appeal and decide it in accordance with law. Similar directions have been made by the Supreme Court in Commissioner of Income-tax v. Greaves Cotton and Co. Ltd. 1968 68 ITR 200 and followed by the Madras High Court in B. Muniappa Gounder v. Commissioner of Income-tax 1976 102 ITR 787. We, therefore, return the reference unanswered with a direction that the Tribunal shall proceed to rehear the appeal and decide it in accordance with law in the light of the observations made above. The assessee will be entitled to costs which are assessed at Rs. 200.
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1978 (4) TMI 88 - ALLAHABAD HIGH COURT
Business Expenditure, Mercantile System ... ... ... ... ..... ad not been approved by the Commissioner of Income-tax as required under section 36(1)(v) of the Act ? In Madho Mahesh Sugar Mills Pvt. Ltd. v. Commissioner of Income-tax 1973 92 ITR 503 (All), this court held that where an assessee maintains his accounts on the mercantile system, a liability already accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business, regard being had to the accepted principles of commercial practice and accountancy. The estimated liability of an assessee for payment of gratuity to its workers based on actuarial valuation is a permissible deduction. Such a liability is an ascertainable liability in praesenti, though payable in future. This decision is directly applicable to the present case. In view of this decision, we answer the question referred to us in favour of the assessee and against the department. The assessee will be entitled to costs which are assessed at Rs. 200.
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1978 (4) TMI 87 - CALCUTTA HIGH COURT
Business Expenditure, Income Tax, Interest On Money Borrowed For Payment, Wholly And Exclusively
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1978 (4) TMI 86 - KARNATAKA HIGH COURT
Capital Asset, Capital Employed, Capital Or Revenue Expenditure, Foreign Company, Income Tax Act, Income Tax Rules, New Industrial Undertaking
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1978 (4) TMI 85 - KARNATAKA HIGH COURT
Business Expenditure, In Part, Income Tax Act ... ... ... ... ..... sticated. We are clearly of the opinion that the judgment of this court reported in Mysore Kirloskar Ltd. v. Commissioner of Income-tax 1968 67 ITR 23 (Mys) proceeded on wrong assumptions and is not in accordance with the principles enunciated by the Supreme Court in Ciba s case 1968 69 ITR 692 and must be considered as not laying down the correct law. We accordingly overrule it. In the result, we hold that in so far as the payment to M/s. Monarch Machine Tool Co. Ltd. is concerned, the Tribunal was right in holding that it was allowable revenue expenditure. In regard to the payments made to M/s. Alfred Herbert Co. Ltd. and M/s. Landis Tool Co., the Tribunal was in error in holding that they were of a capital nature. We hold that the payments made to these companies in the relevant years under consideration were of a revenue nature and allowable under section 37 of the Income-tax Act, 1961. The questions are answered accordingly. Parties shall, however, bear their own costs.
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1978 (4) TMI 84 - KARNATAKA HIGH COURT
Law Applicable, Wealth Tax Act, Wealth Tax Penalty ... ... ... ... ..... e amendment made in 1969 is not with retrospective effect and cannot in any way effect the liability which got crystallised earlier to its coming in to force. This view of ours gets support from the decision of the High Court of Madras in Commissioner of Gift-tax v. C. Muthukumaraswamy Mudaliar 1975 98 ITR 540 (Mad), under the Gift-tax Act, in relation to an identical provision, in Commissioner of Wealth-tax v. Ram Narain Agrawal 1977 106 ITR 965 of the High Court of Allahabad and in Commissioner of Wealth- tax v. R. D. Chand 1977 108 ITR 787 of the Andhra Pradesh High Court and in Suresh Seth v. Commissioner of Wealth-tax 19771 108 ITR 86 of the Punjab and Haryana High Court. Accordingly, we answer the question referred to us as follows The quantum of penalty should be calculated in accordance with the law in force as on the expiry of the last date of the period within which the return was due to be filed for the relevant assessment year. Parties shall bear their own costs.
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1978 (4) TMI 83 - CALCUTTA HIGH COURT
Firm Registration, Revised Return ... ... ... ... ..... arise, because in both the cases assessment has to be made on the basis of the revised return which takes the place of the original return for the purposes of assessment. Therefore, to avoid anomaly the term return of income should be reasonably construed and, in any event, anomaly should be resolved in favour of the firm. Accordingly, the term return of income , in our opinion, includes a revised return . In our opinion also if a declaration is furnished along with the original return, no further declaration need be furnished by the firm along with the revised return. Similarly, if no declaration is furnished along with the original return and it is furnished along with the revised return, it must be held that the declaration has been duly furnished in terms of clause (ii) of the proviso to section 184(7) of the Act. In the premises, we answer the question in the affirmative and in favour of the assessee. There will be no order as to costs. SUDHINDRA MOHAN GUHA J.--I agree.
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1978 (4) TMI 82 - CALCUTTA HIGH COURT
Business Or Profession ... ... ... ... ..... by the learned counsel for both the parties, we send back the matter to the Tribunal with the directions that, after giving a reasonable opportunity to both the parties of adducing evidence and counter-evidence and of being heard, it shall ascertain the primary facts and on the basis of such findings it shall then decide whether these assets are buildings or not and, if it is held by the Tribunal that these assets are buildings , whether they were used for the purposes of the business of the assessee in the relevant accounting years and whether the depreciation as claimed by the assessee is admissible or not. The Tribunal will also ascertain the nature of the business carried on by the assessee in order to decide the aforesaid questions and will also consider the applicability of the aforesaid case cited oil behalf of the assessee. This reference is accordingly disposed of without answering the question. There will be no order as to costs. SUDHINDRA MOHAN GUHA J. --I agree.
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1978 (4) TMI 81 - KARNATAKA HIGH COURT
Business Income, Capital Gains, Income From House Property ... ... ... ... ..... erefore, a person claiming benefit under section 54 must first establish that he comes under the category of person entitled to that benefit and further that he satisfies the other conditions specified therein. The object of section 54 also appears to be only to relieve the rigour of taxation in respect of residential houses occupied by individuals. The assessee which is a co-operative society cannot claim the status of an individual so as to claim the benefit under section 54. The building that was owned by the assessee as well as the one that was purchased subsequently were only used for the purpose of the business of the assessee and the income derived therefrom was not being charged to tax under the head Income from house property . This requirement under section 54 is also not satisfied in the instant case. For the reasons stated above, the view taken by the Tribunal is correct and the question referred is answered in the affirmative. Parties shall bear their own costs.
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1978 (4) TMI 80 - KARNATAKA HIGH COURT
Capital Gains, Immovable Property, Interest In Property, Movable Property ... ... ... ... ..... l results are the relevant consideration. It may indeed be said that if these loose principles of construction had been liberally applied, they would in many instances have been adequate to deal with tax evasion and there would have been less frequent cause for the intervention of Parliament. On the facts and in the circumstances of the case, we are of the opinion, that since the court sale itself was set aside ultimately by the appellate court the assessee never acquired any sort of interest in the property in question and that it never became a capital asset and a transfer by the assessee resulting in a capital gain could not, therefore, take place at all. The Tribunal was, therefore, in error in holding that the sum of Rs. 20,000 which was received by the assessee under the compromise represented long-term capital gain liable to tax. We, therefore, answer the question in the negative and in favour of the assessee. The assessee is entitled to costs. Advocate s fee Rs. 250.
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1978 (4) TMI 79 - ALLAHABAD HIGH COURT
Business Expenditure, Manufacture And Sale, Penal Interest ... ... ... ... ..... epartment. This, however, does not conclude the matter. The learned counsel appearing for the assessee had argued before the Tribunal that though the firm was maintaining mercantile system of accounting, yet for entitlement purposes it had followed the cash system and on that basis the assessee paid the amount that was received by him during the year under consideration. This argument has not been dealt with specifically by the Tribunal. There is no finding whether the general system of accounting was mercantile or the assessee had in fact followed the cash system for the entitlement purposes and what was the fate of this argument, The Tribunal merely proceeded on the basis of its interpretation of cl. 10 which, as observed above, was not correct. In the circumstances, the Tribunal will have to rehear the appeal in order to decide the point in controversy. We, therefore, answer the question referred to us in the negative, in favour of the assessee and against the department.
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1978 (4) TMI 78 - MADRAS HIGH COURT
Civil Court, Income Tax Act ... ... ... ... ..... is not lost by virtue of the sale being set aside. The learned subordinate judge has gone into the question whether this application is maintainable under s. 47 of the Code of Civil Procedure or under Order 21, rr. 58 and 59 of the Code of Civil Procedure. That question need not be gone into, because the application has been filed under s. 151 of the Code of Civil Procedure. As soon as the notice under r. 2 of Sch. II of the I.T. Act and the provisions of r. 16 of the same Schedule were brought to the notice of the learned subordinate judge, he ought to have stopped proceeding further with the execution of the decree. In the circumstances, this civil revision petition is allowed and the attachment by the first respondent in pursuance of the decree in his favour which was made absolute on August 23, 1961, is set aside and the execution proceedings instituted by him are stayed. After the department realises the dues, the decree-holder may proceed with the execution. No costs.
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