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Case Laws
Showing 41 to 60 of 174 Records
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1982 (8) TMI 141
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... ... ..... enactment. On appreciation of facts and this material on record further fact which requires consideration is that the father effected the partial partition in this case which is not adverse to the interest of the minor s property. By making a partial partition the only determined the interest of the minor in the joint family property, Therefore in the light of the elaborate discussion made above, we are of the opinion that the father by giving consent to the partials partition on behalf of the minor as a guardian is in law obtained consent form the minor and, therefore the partition effected by the father in the present case is valid. We therefore do no find any reason to interfere with the order of the AAC and the order of AAC is therefore confirmed. 8. In the result, the appeal filed by the Revenue is dismissed. In view of the fact that the cross objection of the assessee merely supports the order of the AAC, the aforesaid cross objection is hereby dismissed as infructuous.
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1982 (8) TMI 138
Income From Property, Religious Trust, Setting Up ... ... ... ... ..... an AOP. We have held that section 11 applies to the case. Hence, the entire income is exempt except the portion not applied for charities. The ground raised is academic and we reject the same. 17. Since the charitable object of the trust is not to be considered under the residuary clause, the provision in the trust deed for carrying on business will not, in any way, affect the grant of exemption. In any event, the assessee s case is supported by the Supreme Court s decision in Surat Art Silk Cloth Mfrs. Association s case. 18. In the result, the revenue s appeals are dismissed. 19. Since we have held that the institution is a charitable trust its wealth is exempt under section 5(1)(i) of the Wealth-tax Act, 1957. It is also made clear that the wealth of the trust is exempt for the assessment year 1971-72 also since the valuation date for that assessment is subsequent to the deed of amendment, namely, dated 17-11-1969. In the result, the wealth-tax appeals are also dismissed.
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1982 (8) TMI 137
Agricultural Implements, Agricultural Produce ... ... ... ... ..... om the assessee-society to the primary society. The rules regarding passing of goods in the property are stated in sections 19 to 24 of the Sale of Goods Act. From the foregoing provisions of the Sale of Goods Act, there should be no hesitation in holding that the sale of goods is by the assessee-society to the primary society and not to the members of the primary society. The mere fact that the goods might have ultimately finds its destination to the members of the primary society is no criteria for holding that they are direct buyers from the assessee-society. Further, there is no contract between the ultimate consumer and the assessee-society. We, therefore, hold that the profit arising to the assessee-society on sale of goods to its members, namely, primary societies, would be entitled to exemption under section 80P(2)(a)(iv). 7 and 8. These paras are not reproduced here, as they involve minor issues. 9. In the result the appeals filed by the assessee are allowed in part.
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1982 (8) TMI 134
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... ... ..... d out. It may be that at this distance of time it is not possible to tender direct evidence regarding the persons to whom money was receipt. It is all perverse and unreasonable to insist on such evidence after a period of 10 to 12 years. Possibilities have to be taken into consideration. After all the question is whether the explanation about source is satisfactory or not. When two inferences are possible, it his better as we stated earlier to prefer the one that is in consonance with legal and legitimate activities. It is preferable to attribute the source of money to legal activities when there is a possibility that such legal activities rather than to jump to a conclusion and attribute it to unexplained and clandestine sources. We are quite satisfied that the source of 19,000 invested in the building is well explained to our satisfaction. Addition of Rs. 17,500 is therefore deleted. The question of validity of s. 148 proceedings is, therefore, left open. Appeal is allowed.
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1982 (8) TMI 132
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... ... ..... f Rs. 99,044 being the excess over the prescribed ceiling of Rs. 72,000. On the assessee rsquo s appeal the Commr. (A) held that the amount in question comes under the category of a benefit or amenity extended to him and hence such reimbursement of medical expenses has to be taken into consideration for the purpose of computing the admissible amount u/s 40(c) of the Act. We have heard the parties. The arguments before us by the parties were the same as were canvassed before the Special Bench of the Bombay Tribunal in ITA No. 708(Bom)/1975-76 for the asst. yr. 1972-73 in the case of M/s Blackie and Sons (India) Ltd. The Tribunal by its order dt. 29th July, 1978 held that u/s 40(c) read with s. 40A(5) reimbursement of medical expenses, though it is not a perquisite in the case of an employee, nevertheless forms part of the salary of a director-cum-employee. Following this decision we would uphold the Commr rsquo s view. 3. In the result the assessee rsquo s appeal is dismissed.
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1982 (8) TMI 130
Capital Or Revenue Expenditure ... ... ... ... ..... as not substantially replaced or reconstructed because only one part of the car was replaced. May be it is the prime mover of the vehicle, but it is still only one of the several component parts that make a car and the replacement of the engine alone cannot be considered to be such a substantial alteration of the vehicle as to consider it to be a completely new asset. We have only to consider whether the assessee derived a fresh advantage of an enduring benefit. On this aspect, we find the advantage was only of a reduction in recurring revenue expenditure and an expenditure incurred for reducing the revenue expenditure cannot be considered to be a capital expenditure. From the point of view of an ordinary businessman, it was an expenditure to cut the running expenditure and is not to be capitalised. Therefore, we are convinced that the AAC was right in allowing the expenditure claimed as an admissible deduction in computing the income of the assessee. The appeal is dismissed.
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1982 (8) TMI 128
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... ... ..... low taxable limit and for the asst. yr. 1974-75 the increase was marginal. The wealth has been enhanced on account of valuation of properties and not by allowing fully the liabilities. Regarding valuation as well as allowability of liabilities, in our opinion, there can be honest difference of opinion and the assessee could reasonably entertain the belief that the liabilities were entertain the belief that the liabilities were deductible while computing the net wealth and he did not visualise that the value of the asset s would be increased. In such circumstances we are of the opinion, that there was no case for imposing there penalties. We are also in agreement with Shri Ranka that when the assessee was already on the records of the department being income-tax payer, it could not be said that the assessee deliberately did not file the return. In the circumstances, we are unable to sustain the order of the authorities below. The same are concealed and the appeals are allowed.
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1982 (8) TMI 127
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... ... ..... nt of Hon ble Madhya Pradesh High Court in the case of Addl. CIT, MP vs. Indian Pharmaceuticals (1980) 123 ITR 874 (MP). No doubt, this authority supports the contention of their revenue that an order of the ITO is erroneous and prejudicial to the interests of revenue, if the ITO fails to invoke penalty proceedings therein. Thus there are authorities in favour and against the assessee. In these circumstances, we follow the golden rule, as laid down by the Hon ble Supreme Court in (1973) CTR (SC) 177 (1973) 88 ITR 192 (SC) in Vegetable Products Ltd. s case that the view, which is more favourable to the assessee be followed and, we therefore, rely on the decision of the Delhi High Court. This being so, we hold that the order of the ITO cannot be said to be erroneous and prejudicial to the interest of revenue simply because he failed to initiate penalty proceedings under s. 271(1)(c) in the assessment order. The order of the CIT is, therefore cancelled. 2. The appeal is allowed.
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1982 (8) TMI 126
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... ... ..... hat any income had escaped assessment due to failure or omission of the assessee. There cannot be any presumption of the interest income simply because the assessee failed to disclose the capital employed in the money lending business and the names of the debtors. Even if the assessee were disclosed these two facts, it cannot be presumed that there was interest income during the years under appeal. The assessee categorically stated though certain transactions had been carried out during the year under appeal, but no interest income was received. There is nothing to show to the contrary. For the reason, we hold that the ITO exceeded in his jurisdiction in having issued notices under s. 148 for the years under appeal. We agree with the assessee that under the garb of the reassessment proceedings, the ITO wanted to review his orders, which he is not entitled to do under the law. The reassessments for all the years under appeal are, therefore, quashed. 3. The appeals are allowed.
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1982 (8) TMI 125
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... ... ..... reference, the matter came before the Hon rsquo ble High Court. In that case the main point for determination was whether there was any goodwill and the value of such goodwill was legally includible in the principal value of the estate of the deceased or not. On the facts of the case, it was found that there was goodwill and the value of such goodwill was to be includible in the estate of the deceased. That decision is on a different fact and as such will not help the revenue. Other decisions also are on other. 10. For the reasons discussed above, we are of the view, that the finding of the ld. AAC is not correct. There is no material on record to prove that Shri Vimalkumar, the retiring partner, had surrendered his right in the goodwill and assets of the firm in favour of his minor children at the time of retirement u/s 4 (1)(c) of the Act. Thus the authorities below were wrong in estimating the taxable gift in the hands of the assessee. Accordingly, the addition is deleted.
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1982 (8) TMI 124
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... ... ..... should have disclosed the above commissions income, in spite of the fact that the quantification of the same was in dispute. From the copies of letters dated 30th April 1980 and 13th October 1978, issued by Swadeshi Cotton Mills Ltd., which are at pages 7and 8 of the paper book, it is seen that there was a dispute regarding a sum of Rs. 2,410 and that the amount was paid by cheque dated 14th May 1980 for Rs. 1,268.45 for the assessment year 1975-76 and Rs. 1,114.97 for the assessment year 1976-77. In the absence of further facts regarding the brokerage due to the assessee, etc. and in view of the certificates issued by the party concerned, as mentioned above, we would direct the Income-tax Officer to verify the amount includible for the year under appeal, after giving the assessee an opportunity of being heard. 21. In the result, the appeal by the assessee for the first year under appeal is treated as partly allowed and the appeal for the second year is treated as dismissed.
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1982 (8) TMI 123
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... ... ..... not arise. In other words, in the case of N.C. Modi, there was no occasion for the Hon rsquo ble High Court to deal with the retrospective effect of the Expln. 1 mentioned above. The Hon rsquo ble High Court in the case of Smt. Sonal K. Amin (1980) 16 CTR (MP) 391 has specifically dealt with the point of above and held that the meaning given in the Explanation is not to be applied for any assessment year before 1-4-1972. Thus the above two decisions referred to by the parties before us have been rendered on different points and under different circumstances. 6. As mentioned earlier, the AAC allowed the claim of the assessee following the decision in the case of Smt. Sonal K. Amin (1980) 16 CTR (MP) 391. In view of what we have discussed earlier, we find that there is no infirmity in the order of the AAC in granting relief to the assessee in the present case. We find no material or fact to interfere with his order. 7. In the result, the appeals by the revenue are not allowed.
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1982 (8) TMI 122
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... ... ..... e sides, we find that there is sufficient force in the submissions made on behalf of the assessee that the finance did not flow from M/s Jai Kishan Raghunath to Ramesh Metal Industries as the withdrawals were made by the partners for investing in the business of M/s Ramesh Metal Industries. In our opinion, the facts noted by the ITO in the case of M/s Ramesh Metal Industries would not go to show that M/s Ramesh Metal Industries is not a genuine firm. In fact, we do not find any material to sustain the view that the second firm is not a genuine firm. Having regard to the totality of the facts and circumstances of the case, we are of the opinion that the direction of the AAC should be sustained in both the cases. In this view of the matter, the direction of the AAC to the ITO to exclude the income of Ramesh Metal Industries the from computation of M/s Jaikishan Raghunath is quite valid and no interference is called for. 15. Accordingly, the appeals by the Revenue are dismissed.
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1982 (8) TMI 121
Gratuity Fund ... ... ... ... ..... n the statute book. While we have no difficulty in accepting this proposition on behalf of the revenue, we find that it does not help it as section 40A(7) is not attracted at all as the assessee had not made any provision and had only made a payment. Section 40A(7) was introduced with a view to avoid companies from availing the benefit of deduction merely on the basis of provision without any obligation on their part to safeguard their ultimate liability to their employees. Hence, even in the light of the purpose of introduction of section 40A(7), it cannot be said that the assessee s claim is unreasonable. At any rate, it is a legitimate claim failing under section 37. Hence, the assessee is entitled to succeed on this point and the relief claimed for all the four years is directed to be allowed. Since this is the only ground for the assessment years 1975-76 and 1978-79, these two appeals are allowed. 7 to 9. These paras are not reproduced here as they involve minor issues.
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1982 (8) TMI 120
Investment Allowance ... ... ... ... ..... this decision is of a limited assistance to the assessee, the broader definition by the inclusion of the words construction and thing in the place of manufacture or processing of goods would certainly enlarge the meaning so as to justify the inference in favour of the taxpayer. As pointed out earlier, the Orissa High Court in Budharaja s case has already taken the view in favour of the taxpayer under an analogous provision. The activity encountered in the Orissa High Court case is identical with that of the assessee. There is no other decision to the contrary. The first appellate authority, therefore, should have directed the ITO to grant the allowance, subject only to the other conditions being satisfied. 4. In this view, we allow the appeal and direct the ITO to consider the claim of investment allowance on merits, on the basis that, the assessee s activity is of an industrial undertaking which is engaged in the business of construction or manufacture of articles or things.
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1982 (8) TMI 119
Penal Interest ... ... ... ... ..... emission of interest at a later stage, there are adequate provisions to bring such remission to tax. There is no reason for disallowing any part of the amount of Rs. 89,666.35. This will be allowed as a deduction. 6. As for the balance of Rs. 25,797.36, it is interest relating to accounting year 1976-77 pertaining to the preceding assessment year. It should have been claimed in the relevant year. Since the assessee anticipated rescheduling of the dates, the assessee did not provide for the same. If the rescheduling is not done and the amount becomes payable and is actually paid, it may well be treated as liability either of the year of Government order or the year of payment. At any rate, it cannot be treated as a liability for this year. We have, therefore, to confirm the disallowance to limited extent of Rs. 25,797.36, though for reasons which are different from those set out by the authorities below. 7. In the result, the appeal is partly allowed. Relief due Rs. 89,666.35.
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1982 (8) TMI 118
Development Allowance, Weighted Deduction ... ... ... ... ..... y for which the forward contracts were entered into, etc., clearly support the assessee s claim for exception under clause (b). The only other point made out by the first appellate authority is that there was no need for entering into a forward contract to avoid a loss, because there was no such possibility of loss as the market was rising. This overlooks the fact that the assessee could not have foreseen the bullish market as on or about 13-7-1976, when she entered into the forward contracts in the last week of April 1976. We, therefore, find that there is no merit in the orders of the authorities below. While clause (a) of the proviso would except forward contracts and cover other existing contracts for delivery of goods, clause (b) would cover forward contracts in respect of ready holding of stocks . Hence, the assessee is entitled to succeed in view of clause (b) to the proviso to clause (5) of section 43. 4. In the result, the appeal is allowed. Relief due is Rs. 13,293.
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1982 (8) TMI 117
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... ... ..... C in respect of the penalties by the WTO is correct because as held in the case of Addl. CWT vs. Babulal K. Shah and Anr. (1978) 114 ITR 370 (Mad) the delay in filing the income tax returns constitutes a reasonable cause for the delay in filing the wealth tax returns. The AAC has rightly followed this judgment. In the case of Shakuntala Mehra vs. CWT (1976) 102 ITR 301 (Del), the Hon ble High Court has held that the more failure to file returns within the time allowed did not make the assessee liable to penalties there had to be contumacious or deliberate default and the onus was on the Department to establish that the assessee had no reasonable cause for not filing it within time. On the facts and circumstances of this case, we do not find that the delay in filing the returns was due to any contumacious or deliberate act on the part of the assessee. We, therefore, do not find any ground to interfere with the order of the AAC. 6. In the result, both the appeals are dismissed.
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1982 (8) TMI 116
Draft Assessment Order ... ... ... ... ..... at the learned counsel for the assessee had urged that even if it was held that two views were possible as regards the applicability of the provisions of section 144B in this case, the decision has got to be in favour of the assessee in view of the decision of the Supreme Court in the case of CIT v. Vegetable Products Ltd. 1973 88 ITR 192. So far as the legal position is concerned, one cannot possibly have any difficulty about it. However, it has to be borne in mind that the Supreme Court has in its another decision in the case of CIT v. T.V. Sundaram Iyengar and Sons (P.) Ltd. 1975 101 ITR 764 held that this principle will not apply where the provision is clear and distinct. Since, to my mind, the provisions of section 144B are quite clear and distinct, I do not think that the decision in Vegetable Products is of any help to the assessee. 11. The order will now go back to the Bench, which originally heard these appeals for deciding the appeals according to the majority view.
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1982 (8) TMI 115
Reassessment, Issue Of Notice ... ... ... ... ..... again, I do not find any merit in the arguments advanced on behalf of the assessee. No doubt certain steps have to be taken before a notice under section 148 can be served on the assessee. All the same, however, all those steps are inter-departmental steps and the proceedings for assessment are not commenced without the service of a valid notice under section 148. If there is no dispute about the fact that the notices under section 148 issued by the ITO originally were not served on the assessee or on her attorney, there is no difficulty in holding that no proceedings for assessment were pending or could be said to be pending as a result of the orders passed by the ITO under section 146. This being so, it follows as a natural corollary that the ITO was justified in entertaining the belief that the assessee s income had escaped assessment. 12. The order will now go before the Bench, which originally heard these appeals, for deciding the appeals according to the majority view.
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