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1981 (6) TMI 30 - CALCUTTA HIGH COURT
Business Loss ... ... ... ... ..... ld place to carried forward business losses for set off against the net profit from the current year s business activities ascertained after allowing depreciation for the current year. With due respect, for the reasons expressed by the Andhra Pradesh High Court, we are fully in agreement with the decision arrived at by it. We are also of the view that the business losses carried forward from the previous years cannot have precedence over the current depreciation allowance. Thus, s. 32(2) yields place to s. 72(2) of the Act and not vice versa. In this view of the matter, the Tribunal was not correct in holding that the business losses carried forward from the previous year would first be set off against the income and then only the balance of the income should be set off against the current depreciation. In this context of the matter, we answer the question in the negative and in favour of the revenue. Each party will pay and bear its own costs. SABYASACHI MUKHARJI J.-I agree.
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1981 (6) TMI 29 - GUJARAT HIGH COURT
Net Wealth, Wealth Tax ... ... ... ... ..... ere fact that they were seized and were liable to be confiscated, there was no curtailment or limitation of the right of the assessee. There was no legal bar, limitation, restriction or impediment on his ownership right over the gold articles. In our opinion, therefore, the above decision of the Supreme Court does not assist the assessee. In our opinion, the revenue authorities and the Tribunal were right in including the market value of the gold articles as on the relevant valuation dates in the net wealth of the assessee for the assessment years in question. There is no dispute regarding the assessment of their market value except on the grounds adverted to above. We do not find any infirmity in the view taken by the Tribunal. We, therefore, answer the second question in the affirmative and against the assessee. In the result, both the questions referred to us are answered in the affirmative and against the assessee. Reference answered accordingly with no order as to costs.
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1981 (6) TMI 28 - CALCUTTA HIGH COURT
Actual Cost, Depreciation, Developement Rebate ... ... ... ... ..... bringing them into existence. Moreover, from the order of the Tribunal, it would not appear that this aspect of the question was never agitated before the Tribunal. It was found by the Supreme Court in case of Challapalli Sugars Ltd. 1975 98 ITR 167, that interest paid before the commencement of production on amounts borrowed by the assessee for the acquisition and installation of plant and machinery formed part of the actual cost of the assets of the assessee within the meaning of the expression in s. 10(5) of the Indian I.T. Act, 1922, and the assessee would be entitled to depreciation allowance and development rebate with reference to such interest also. In this view of the matter, the Tribunal was amply justified in allowing the depreciation and development rebate claimed by the assessee. In the above premises, we also answer questions Nos.1 and 2 in the affirmative and in favour of the assessee. Each party will pay and bear its own costs. SABYASACHI MUKHARJI J.-I agree.
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1981 (6) TMI 27 - CALCUTTA HIGH COURT
Appeal To Tribunal ... ... ... ... ..... hus, it could not be said that the assessee was taken by surprise as to such findings of the Tribunal. Next it is rightly pointed out by Mr. Sen that the appellant before the Tribunal was, not the assessee but the department. In this view of the matter, according to Mr. Sen, it will not be right to say that a ground was taken by the Tribunal which went adversely to the interest of the assessee. Thus, it appears to us that the Tribunal was competent enough to pass the impugned order and that it was within the jurisdiction of the Tribunal to find out as to what amount the assessee was entitled as deduction. We, therefore, answer the question that, in the facts and in the circumstances of the case, the Tribunal was right in law in reducing the allowance of Rs. 1,43,224 representing the service charges of the second half of 1969 by a deduction already allowed by the ITO in respect of the second half of 1968. We propose to pass no order as to costs. SABYASACHI MUKHARJI J.-I agree.
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1981 (6) TMI 26 - CALCUTTA HIGH COURT
... ... ... ... ..... is, in the opinion of the Income-tax Officer, excessive or unreasonable. Under the amendment the deduction on account of such expenditure or allowance will be further subject to an overall ceiling limit of Rs. 72,000 in respect of any one director or a person who has a substantial interest in the company or a relative of a director or of such person. In that background of the matter, it appears to us that there were two conditions independently to be fulfilled, i. e., that the ITO might disallow if he found that the remuneration was excessive or unreasonable and further even in cases where he arrives at no such finding, if the expenditure or allowance exceeded Rs. 72,000, then no such expenditure or allowance was allowable. In that view of the matter, the Tribunal came to a correct conclusion and the question must be answered in the affirmative and in favour of the revenue. In the circumstances, the parties will pay and bear their own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 25 - GUJARAT HIGH COURT
Assessment, Income From Undisclosed Sources ... ... ... ... ..... nity, to the assessee. Mr. Kaji is, therefore, justified in making a grievance that the Tribunal did not give any opportunity to the assessee to rebut the additional evidence produced by the revenue. It may be made clear that Mr. Kaji did not raise any objection against the production of the additional evidence before us. Under the circumstances, the only course open to us is to remit the matter to the Tribunal for giving an adequate opportunity to the assessee to explain or rebut the additional evidence produced before it by the revenue and on which reliance was placed by it in confirming the order of the AAC. We, therefore, decline to answer the question referred to us for our opinion and remit the matter to the Tribunal for fresh disposal in accordance with law. It will be open to the Tribunal to remand the matter to the lower authority for recording farther evidence as indicated above, if it deems it proper to do so. There would be no order as to costs of this reference.
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1981 (6) TMI 24 - CALCUTTA HIGH COURT
Depreciation ... ... ... ... ..... pressed the same view. But as we have mentioned before, the controversy in those cases was different. Here, there was no question of recomputing the actual cost. In view of the coming into operation of the new Act, all the assessments with which we are concerned were done under the provisions of the I.T. Act, 1961. Having regard to the nature of the controversy involved in this case we are of the opinion that the ratio of the said decisions would not be very relevant for our present purpose. In any event, if this ratio had any application, in our opinion, the same principle would be against the assessee as was the view of the Tribunal. In the aforesaid view of the matter, we are of the opinion that the Tribunal was right in coming to the conclusion it arrived at and, therefore, both the questions are answered in the affirmative and in favour of the revenue. In the facts and circumstances of the case, parties will pay and bear their own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 23 - MADHYA PRADESH HIGH COURT
Charitable Trust, Exemptions ... ... ... ... ..... mencement of this Act, any income thereof if the trust or institution is created or established for the benefit of any particular religious community or caste. This provision applies only to such charitable trusts which are created or established after the commencement of the Act of 1961. The bar under this provision is not applicable to a charitable trust which was created or established before the commencement of the Act. Since the Tribunal held as a fact that the assessee-trust had been created before the commencement of this Act, it was right in holding that the assessee was entitled to the benefit of exemption under s. 11 of the I.T. Act for its entire income as the bar under s. 13(1)(b) was not applicable to it. We, therefore, answer the question in the affirmative and hold that the Tribunal was correct in law in holding that the assessee is entitled to the benefit of exemption under section 11 of the I.T. Act for its entire income. There shall be no order as to costs.
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1981 (6) TMI 22 - CALCUTTA HIGH COURT
Assessment, Limitation, Penalty, Return ... ... ... ... ..... ugar Mills Ltd. v. CIT 1973 90 ITR 236, and the observation of Mr. Justice Swarup has also been reiterated by the Calcutta High Court in the case of Mst. Zulekha Begum (Khatoon) v. CIT 1981 129 ITR 560. We are in respectful agreement with this view on this aspect also. In that view of the matter, in our opinion, the Tribunal was in error in holding that the assessment made was invalid or the return filed subsequently was not valid return. We are also, in view of the facts discussed by the Tribunal, in agreement with the Tribunal that the initiation of the proceedings in this case under s. 271(1)(c) was justified. In the premises, question No. 1 is answered in the negative and in favour of the Revenue, question No. 2 is answered in the affirmative and in favour of the Revenue and question No. 3 is also answered in the affirmative and in favour of the Revenue. In the facts and circumstances of the case, parties will pay and bear their own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 21 - CALCUTTA HIGH COURT
Disposition, Estate Duty, Exemptions, Property Reverting To Disponer ... ... ... ... ..... e the amount of maintenance and, for this purpose, exclusive possession of certain items of property was delivered to her. The decision in this case has got no application to the facts and circumstances of the present case. In reply it is pointed out by Mr. Naha, and rightly, that the test is whether Debi Prasanna Ghosh could transfer and dispose of the six items of properties during the lifetime of Charushila or at the time when he purported to do so as the same was under the administration of Charushila under the Will. In the above facts and circumstances of the case, we are of the opinion, that the Tribunal was not right in holding that the accountable person in this case came under the exemption of s. 24 of the Act. In that view of the matter we answer the question in the negative and in favour of the Revenue. Each party to pay and bear its own costs. Let the cause title of the matter be amended pursuant to the order dated January 16, 1980. SABYASACHI MUKHARJI J.-I agree.
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1981 (6) TMI 20 - PUNJAB AND HARYANA HIGH COURT
Reassessment ... ... ... ... ..... ssional statements were in any manner related to the assessee otherwise, not. In view of these two decisions, the law, so far as, this court is concerned, is well settled that though the assessee may have disclosed fully the facts at the time of the original assessment, if they are found to be untrue on the basis of the material discovered later on by the assessing authority, the assessment would be liable to be reopened under s. 147(a) because in such a case the assessee failed to disclose truly all the material facts necessary for the assessment and it would not merely be case of change of opinion. As observed above, in the present case, the assessing authority had, from the facts discovered later on, formed an opinion that the primary facts disclosed were untrue. The reopening of the assessment was, therefore, fully covered by the provisions of s. 147(a) and question No. 2 is accordingly answered in the negative, in favour of the Revenue and against the assessee. No costs.
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1981 (6) TMI 19 - CALCUTTA HIGH COURT
... ... ... ... ..... to above, earning of the income sufficiently warrants to claim deduction. In that view of the matter and inasmuch as this contention had always been urged before the authorities below, in either view of the matter, the amount should have been allowed as a deduction in computing the total income of the assessee. Question No. 1 is answered in the affirmative and in favour of the assessee. Question No. 2 is answered in the negative in the sense that it was not for a violation of the provisions of law. The payment of interest of Rs. 49,413 was not for a defiance of the provisions of law. This is also in favour of the assessee. Question No. 3 is answered by saying that in the facts of the case the decision of the Tribunal that interest of Rs. 49,413 payable to the Calcutta Corporation is not allowable as a deduction is not legally tenable. This is also in favour of the assessee. In the facts of the case, parties will pay and bear their own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 18 - CALCUTTA HIGH COURT
Reassessment ... ... ... ... ..... lity of the parties. Though subsections (1) to (5) of section 171 merely lay down the machinery for assessment of a Hindu undivided family after partition, sub-section (6) of section 171 is clearly a substantive provision imposing a new liability on the members for the tax determined as payable by the joint family. The words all the provisions of this Act shall apply accordingly cannot, therefore, be construed as incorporating by reference to sub-section (6) of section 171 so as to make it applicable for recovery of the tax reassessed on the Hindu undivided family in cases falling within clause (ii) of section 297(2)(d). This contention of the revenue authorities must accordingly be rejected. Therefore, had it been necessary for us to answer, we would have answered question No. 2 in the negative and in favour of the revenue. But, as we have mentioned, it no longer survives. As the assessee is not appearing, there will be no order as to costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 17 - CALCUTTA HIGH COURT
Bad Debt, Trading Loss ... ... ... ... ..... iness activities which were diverse in nature. Therefore, that loss incurred by the assessee has to be allowed as on business account. As the Tribunal held that the assessee was engaged in the business as a holding company for financing its subsidiaries and on that basis and the other facts found by the Tribunal and the fact that the loan was in fact given, which is also a finding of fact, and in the usual course of business the assessee gave loans, the question now posed before us is really a question based on facts. But no question of challenging the finding of fact as perverse or based on no materials has been referred to this court. In fact, that question has been, refused and if the findings stand then the conclusion of the Tribunal on those findings become irresistible. In that view of the matter, the question posed before us must be answered in the affirmative and in favour of the assessee. There will, however, be no order as to costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 16 - CALCUTTA HIGH COURT
... ... ... ... ..... error by putting the word. since in the question after the word holding and before the expression the trust . We reframe the question, as follows, to give it a meaning, what in our opinion, the Tribunal really meant to refer Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the trust was not created bona fide for the benefit of the relatives of the settlors and as such one of the conditions laid down under clause (iii) of the proviso to sub-section (1) of section 164 was not fulfilled and the assessee-trust was liable to be assessed at the prescribed rate of 65 per cent. and not at the rate applicable to the total income of an association of persons ? We reframe the question in the manner aforesaid accordingly and we answer the reframed question in the negative and in favour of the assessee. In the facts and circumstances of the case, the parties will pay and bear their own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 15 - CALCUTTA HIGH COURT
... ... ... ... ..... sary for us, we would have remanded the case to the Tribunal for a decision Is to whether any documents of title had been made out or not. As to cl, 9 (if the agreement we are clearly of the opinion that bad it been necessary for us to decide this theoretical question, we could not say that the Tribunal, in the facts and circumstances of the case, was wrong in saying that in reality there was no accrual of a right to forfeit, in view of the absence of intimation to the vendee in the year in question. In that view of the matter, we decline to answer the question, as the, answer to this question would be academic on the facts of this case. We must observe, secondly, that had it been necessary for us, however, to decide, the question, we would have answered the question in the affirmative and in favour of the assessee. In any event, we decline to answer the question, in the facts and circumstances of the case. There will be no order as to costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 14 - KERALA HIGH COURT
Business Expenditure, Such Employee ... ... ... ... ..... ve discussion, our answer to question No. 2, in I.T.R. 44 of 1979, which concerns the section as it stood prior to April 1, 1972 and to similar questions in the other cases, is in favour of the Revenue and against the assessees. The Tribunal was not right in law in allowing the expenses incurred for the maintenance of the buildings beyond the limit specified in s. 40(a)(v) of the Act for the period when that provision was in force and the corresponding limit specified in s. 40A(5) of the Act for the years when that section was in force. In the result, question No. 2, in all cases other than I.T.R. No. 103 of 1980, where there is only one question, is answered in the negative, that is, against the assessee and in favour of the Revenue. All the references are answered as above. A copy of this judgment under the seal of the High Court and the signature of the Registrar shall be sent to the Income-tax Appellate Tribunal, Cochin Bench, as required under s. 260(a) of the I.T. Act.
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1981 (6) TMI 13 - CALCUTTA HIGH COURT
Assessment, Limitation ... ... ... ... ..... the negative and in favour of the assessee. So far as the next question in the said reference is concerned, in view of the decision of this court in the case of Badri Prosad Bajora v. CIT 1967 64 ITR 362, the same must be answered in the negative and in favour of the Revenue. But, in this case it is academic because the Revenue s contention was both that the assessment order was passed and communicated before March 31, 1969. So far as the question referred at the instance of the assessee in Income-tax Reference No. 272 of 1961 is concerned, in the light of the observations that we have made, we must hold that the finding of the Tribunal that the assessment determining the tax liability was also signed on March 27, 1969, was based on no material and/or evidence and as such perverse. This question is answered in favour of the assessee. In the facts and circumstances of the case, parties will pay and bear their own costs in both the references. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 12 - CALCUTTA HIGH COURT
Reassessment ... ... ... ... ..... t in its conclusion. In this connection reference may also be made to the observations of the Delhi High Court in the case of Nawabganj Sugar Mills Co. Ltd. v. CIT 1980 123 ITR 287 and the observations of the Supreme Court in the case of CIT v. T. S. PL. P. Chidambaram Chettiar 1971 80 ITR 467. But as we have said before whether in a particular case, the facts to which the attention of the ITO was not drawn may be of such significant nature that not doing so would amount to a failure to disclose fully the relevant and material facts, would depend upon the facts and circumstances of each case. In the facts and circumstances of the case, the Tribunal has come to that conclusion and we would not differ from the conclusion arrived at by the Tribunal in the instant case. In the premises the question is answered in the affirmative and in favour of the Revenue. In the facts and circumstances of the case, the parties will pay and bear their own costs, SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (6) TMI 11 - MADRAS HIGH COURT
HUF, Partition ... ... ... ... ..... what is involved in this discussion is not a question of fact, but a question of law. Even so, the differences between a partition and a gift are so glaring and self-evident, that the question has only to be stated to be rejected. In such cases, the High Court will not, for mere form s sake, call for a reference from the Tribunal. The mechanism of a case stated is not intended to be an idle pastime of an academic exercise, but a purposive proceeding. The court will compel a Tribunal to refer a question of law only to get a case stated with some substance in it. Where the controversy bids fair to be either academic or futile, as in this case, this court has the power and the duty to scotch the attempt to get a case stated even at the early stage. We, therefore, see no reason to direct a reference from the Tribunal on the second question as well. In the result, all the petitions are dismissed. The Department will have its costs from the assessee. Counsel s fee Rs. 250, one set
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