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1982 (8) TMI 114
Appeal To AAC, Limitation ... ... ... ... ..... er section 146 of the Act passed by the ITO but the present appeals are against the assessments under section 144 made by the ITO. There is also no rebuttal from the assessee before the AAC that the remarks refused endorsed by the postman on the registered letters addressed by the ITO to the assessee were incorrectly made, that the letters were not properly addressed or that the assessee had in fact not refused to take delivery of the notices. In view of the above facts, we have no hesitation in holding that the appeals filed by the assessee before the AAC on 12-11-1973 relating to the assessment years 1967-68 and 1968-69 and on 11-10-1973 relating to the assessment year 1969-70 were filed beyond the statutory period of 30 days from the date of service of the notice of demands for these years. In these circumstances, the AAC was fully justified in treating these appeals as time-barred and in dismissing the same in limine. 5. In the result, all the three appeals are dismissed.
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1982 (8) TMI 113
Reassessment, Issue Of Notice ... ... ... ... ..... act, subsequently also the notices were received by the assessee and the assessee responded to such notices. I wonder how suddenly one comes across a notice by affixture. What prompted the issue of notice by affixture is obscure. The learned departmental representative also has not been able to point out how the notice was sought to be served by affixture. From the report of the process server also, it is also not clear whether the process server made any enquiry from the outsider about the availability of the assessee at the particular place to which the notice has to be served. I am therefore of the firm opinion that no notice was served in this case on the assessee as required by law. The notice of affixture is illegal and invalid having regard to the facts and circumstances of the case. 6. For the above reasons, the assessment under section 147(a) read with section 148 cannot be sustained in law and the same has to be and is hereby cancelled. 7. The appeal stands allowed.
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1982 (8) TMI 112
Cash System, Hybrid System, Interest Income, Mercantile System ... ... ... ... ..... ounting is regularly followed by the assessee and the income taxable under the head Profits and gains of the business or profession can properly be deduced therefrom, the Commissioner (Appeals) was justified in deleting the aforesaid additions made by the ITO in respect of the amounts standing to the credit of interest suspense account , pertaining to the sticky accounts for each of the years under consideration. 22. The ratio of the decision of the Kerala High Court in State Bank of Travancore s case relied upon by the departmental representative is distinguishable, as correctly held by the Cochin Bench of the Tribunal in IT Appeal Nos. 822 (Coch.) of 1976-77 and 600 (Coch.) of 1977-78 , with which we fully agree. Further, the view taken by us also finds support from the ratio of the three decisions relied upon by the representative for the assessee, Mr. Ganeshan, referred to in paragraph 14 above. 23 and 24. These paras are not reproduced here as they involve minor issues.
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1982 (8) TMI 111
Additional Tax, Higher Rate, Income Tax, Undistributed Profits ... ... ... ... ..... chnical meaning of the term but to its popular meaning, with reference to the context in which the term occurs. It is clear that a guideline issued by the Ministry of Law for the purpose of the audit of the companies under the Companies Act would have no bearing on the question before us. 8. We would, therefore, hold that the assessee is a trading company within the meaning of the term trading company in section 109(iia) and, therefore, the ITO is justified in levying additional tax under section 104, on the basis that the assessee is a trading company. The orders of the Commissioner (Appeals) for the assessment years 1976-77 and 1977-78 are reversed and the orders of the ITO for these two assessment years are restored. The orders of the Commissioner (Appeals) and the ITO for the assessment year 1978-79 are confirmed. 9. The appeals by the revenue for the assessment years 1976-77 and 1977-78 are allowed. The appeal by the assessee for the assessment year 1978-79 is dismissed.
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1982 (8) TMI 110
Chargeable Profits ... ... ... ... ..... rge for the assessment year 1977-78 to the specified category of companies, while clause (6) regulates only the advance tax (including surcharge) payable by the assessee-company. 6. Whatever be the language employed in the Finance Act, 1976, it is the provision contained in the Finance Act, 1977, that determines the liability for income-tax payable for the assessment year 1977-78. The language used in section 2(1) and the proviso thereunder is clear enough to show that for the assessment year 1977-78, the assessee-company that had made the deposit under the scheme had no liability to pay surcharge on income-tax payable by the company. Therefore, whatever amount was payable as income-tax for the assessment year 1977-78 did not include surcharge on income-tax payable by it. The admissible deduction under rule 2 of the First Schedule appended to the Act is, therefore, only the amount of income-tax paid and cannot include the deposit made by the assessee-company under the Scheme.
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1982 (8) TMI 109
... ... ... ... ..... SLP (Civil) Nos. 4320 and 4327 of 1979 decided on 17-1-1980 by which the court refused to grant special leave except to clarify the ambiguity, if there be some in the matter of award of interest on the enhanced portion of the compensation and observed that there is no reasons what ever to withhold such payment of interest. It was rightly conceded by counsel for the Improvements Trust that a similar direction with regard to interest be also made. We accordingly direct that interest at the rate of 6 per cent per annum shall be payable not only on the amount of compensation but also on the enhanced portion thereof from the date of taking of possession of land till realisation. In view of what is stated above it is clear that the question sought by the CIT is not a referable question of law because it already stands concluded by the judgements of the Supreme Courts referred to supra. We therefore, reject the reference application of the revenue. . Reference application dismissed.
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1982 (8) TMI 108
... ... ... ... ..... the law relevant to these proceedings. We hold that the original application could not be rejected because of the doubt in the mind of the ITO. This is so because the Examiners of Questioned Documents of both the sides had widely differed. 21. The assessee was entitled for continuation of registration on the basis of those very forms. Even if the ITO had made his mind to reject the assessee on those original forms, he was obliged to give an opportunity to the assessee and if the assessee had made good the defect by filing the correct forms, as in fact he did, the ITO had to accept and allow continuation of registration for each of the assessment years under appeal as provided under section 185(3) of the Income-tax Act, 1961. His failure to do so does not entitle him for his action. We, therefore, on the above set of facts, set aside the orders of the authorities below and direct the ITO to allow continuation of registration for both the years under appeal. 2. Appeals allowed.
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1982 (8) TMI 107
... ... ... ... ..... 34 of the Indian IT Act, 1922 (corresponding to s. 147(a) of the Act) postulated a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. But, what facts are material and necessary for assessment differed from case to case. So, far as primary facts were concerned, the duty of a taxpayer did not extend beyond the full and truthful disclosure of all primary facts. Once all the primary facts were before the assessing authority, it was for him to decide what inferences of facts could be reasonably drawn and what legal inferences had ultimately to be drawn. It was not so far anybody else, far less the assessee to tell the assessing authority what inferences, whether of facts or law, should be drawn. 6. Since the very foundations of the reassessment are lacking, we have not considered it necessary to go into the merits of the case whether the addition of Rs. 6,000 was justified or not. 7. Vacating the reassessment, we allow this appeal.
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1982 (8) TMI 106
... ... ... ... ..... t in the same Sector into consideration. The competent authority appears to have taken the observations of the VO as sacrosanct which could not even be scrutinised by him though under the law it was the competent authority that was required to exercise a judicial mind before acquisition of the property. 35. There should have been serious considerations given and serious contemplations made besides reference to the VO in order to see whether there was any evidence or indication that the apparent consideration shown in the sale deed was not the real consideration and that the fair market value of the property was either 15 per cent or in excess thereof over the consideration entered in the deed so as to invest the competent authority with the power to initiate and acquire the impugned property. This has not been done. Therefore, on each of the above counts, the order of the competent authority made under s. 269F(6) of the Act is bad in law and is cancelled. 36. Appeal allowed.
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1982 (8) TMI 105
... ... ... ... ..... unted to Rs. 18,85,866 when 3.2 per cent G.P. rate was disclosed whereas in the immediate preceding year where 5.5 per cent G.P. rate was disclosed on total turnover of Rs. 3,86,275 which effected the mind of the CIT(A) who considered the G.P. rate of 3.2 per cent low on total turnover of Rs. 18,65,866 alone. It is a well-known principle of business that ordinarily more the turnover less the G.P. rate and vice-versa. When we look to para 5 of the assessment order wherein closing stock in steel tube account was computed by the ITO, he himself took into consideration profit 3 per cent. Under the circumstances, 3.2 per cent G.P. rate disclosed by the assessee during the year under consideration as compared to 5.5 per cent in the immediately preceding year, does not warrant any addition on that account. The addition of Rs. 20,000 therefore, made by the CIT(A) is reduced to Rs. 6,000. 7. In the result, the Revenue s appeal is dismissed and the assessee s appeal is partly allowed.
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1982 (8) TMI 104
... ... ... ... ..... insurance policies, and they are unable to prove the expenses for lack of record, 40 per cent of the expenses be allowed for the first year when the insurance policies are secured. However, this circular of the Board has not specifically been brought to our notice and we have to decide ourselves as to the reasonableness of the expenses against the incentive bonus received by the assessee. There is no challenge by any specific evidence on record as to the finding of facts given by the AAC that the assessee had in fact incurred the expenses. Since the expenses 40 per cent are reasonable and fair, in our opinion, the entire expenses should have been allowed. Therefore, the ld. AAC erred in restricting the allowance to 20 per cent of the gross incentive bonus. We direct that 40 per cent expenses be allowed. 5. In view of above, in our considered opinion, no referable question of law arises out of the order of the Tribunal and, therefore, the reference applications are dismissed.
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1982 (8) TMI 103
... ... ... ... ..... ble that any question was ever put to him regarding utilisation of the said ornaments. There is, however, an observation of the AAC in her order which reads as under ....Sh. Sarup Chand, husband of the lady, was present. He was asked whether he or his wife can give any information that in the last ten years how many marriages of daughter s children were solemnised and what was given, how much cash and jewellery was given. The appellant expressed his inability to give this information. The observations seems to be contradictory because it was the lady assessee s husband who was asked and not the lady-assessee and it is incorrect to say that the appellant expressed her inability to give this information. She was never faced with this query at any stage as the perusal of her statements show. Under the circumstances, the addition sustained on account of unexplained jewellery is also deleted. 8. In the result, the assessee s appeal is allowed and that of the Revenue is dismissed.
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1982 (8) TMI 102
... ... ... ... ..... an identical issue regarding valuation of share in the hands of one assessee when it was differently taken at a higher figure as compared to another co-sharer and they held as under Held that it was not open to the WTO to disregard the order passed by another WTO in which the value of 1/3rd share of the same property belonging to the co-sharer was determined at Rs. 73,333. This value was arrived at on the basis of the report made by the Valuation Officer appointed under s. 12A of the WT Act, 1957, and the order passed by that WTO showed that it had been passed under s. 16(3) of the Act which contemplated an enquiry in which evidence could be led and the assessee could also be heard. So long as that order was not challenged in appeal or revision, it was not open to the Department to adopt a different yardstick in the case of the assessee. Following most respectfully the said decision, the assessee s contention deserves to be accepted. 6. In the result, the appeal is allowed.
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1982 (8) TMI 101
Assessment Proceedings, Initial Depreciation, Investment Allowance, Revised Return ... ... ... ... ..... fore us we find that all the conditions required for claiming a deduction for the investment allowance by the assessee for the assessment year under appeal were complied with and the claim of the assessee was refused only on the ground that the reserve had been created in the books of account, other than the books of account of the relevant previous year for which the assessment was in progress. To our mind, this is not fatal to the claim of the assessee. The spirit of the section and the natural justice that is followed in the income-tax proceedings requires that the assessee should be given an opportunity to make the claim. In this case, the assessee himself filed all the details of proper claim before the ITO finalised the assessment. The claim was, therefore, admissible. We, therefore, direct that the claim of the assessee be admitted and investment allowance allowed. 12 and 13. These paras are not reproduced here, as they involve minor issues. 14. Appeal allowed in part.
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1982 (8) TMI 100
Assessment Proceedings, Assessment Year, Minor Child, Reassessment Proceedings, Regular Assessment, Share Income, Total Income
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1982 (8) TMI 99
... ... ... ... ..... ve been done either by the ITO or by the CIT (A). We, therefore, direct that this claim shall be considered afresh in the light of our aforesaid discussion. 9. Before concluding, we may refer to the assessee s one other ground that a sum of Rs. 2,97,021 which related to interest for the previous years had been wrongly included in the income of the present year. There is certainly force in this argument because according to the proviso to sub-s. (3) of s. 5 of the Indian Electricity Act, 1910, the purchaser has to pay to the licences interest at the Reserve Bank rate ruling at the time of delivery of the undertaking plus 1 interest on the purchase price for the period from the date of delivery of the undertaking up to the date of payment of the purchase price and since the assessee s system of accounting is mercantile, the interest for the previous years could not be included in the income of the present year. 10. In the result, the appeal of the assessee is allowed as above.
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1982 (8) TMI 98
Bad Debt, Interest Income ... ... ... ... ..... the Commissioner (Appeals). We, therefore, direct that this claim shall be considered afresh in the light of our aforesaid discussion. 9. Before concluding, we may refer to the assessee s one other ground that a sum of Rs. 2,97,021 which related to interest for the previous years had been wrongly included in the income of the present year. There is certainly force in this argument because according to the proviso to sub-section (3) of section 5 of the Indian Electricity Act, 1910, the purchaser has to pay to the licensee interest at the Reserve Bank rate ruling at the time of the delivery of the undertaking plus 1 per cent interest on the purchase price for the period from the date of delivery of the undertaking up to the date of payment of the purchase price and since the assessee s system of accounting is mercantile, the interest for the previous years could not be included in the income of the present year. 10. In the result, the appeal of the assessee is allowed as above.
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1982 (8) TMI 97
... ... ... ... ..... any time keeping of course the limits of time prescribed by sub-s(2A) of s 153 of the IT Act 1961. In the present case, the original order was passed within time and so there is no question of our lifting the bar of limitation if we set aside the ITO s order. In view of what we have stated above we allow the departmental appeal set aside the orders of both the AAC and ITO and restore the matter back to the ITO with the direction that he would now pass a fresh order in accordance with law. 12. By the same reasoning, the cross-objection of the assessee is hereby dismissed as the said cross-objection merely seeks to support the order of the AAC and highlights the alleged illegality in the order of the ITO. We have dealt with this point earlier and therefore further discussion of the objection raised by the assessee does not appear necessary. 13. In the result the departmental appeal is allowed for statistical purposes and the cross objection filled by the assessee is dismissed.
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1982 (8) TMI 96
... ... ... ... ..... ribunal and High Court that the actual export of goods was not a condition precedent for granting allowance under s. 35B and that the advertisement and publicity made outside India of the goods and services, in which the company dealt, was enough. In the present case, as already stated, there is no evidence to prove that any advertisement or publicity was made outside India of the bags and the containers manufactured by the assessee. That being so, the aforesaid authority does not advances the case of the assessee in any way. In these circumstances, it cannot be held that the expenditure in question was incurred by the assessee in connection with any export business. The assessee is, therefore, not entitled to claim weighted deduction in respect thereof. We, accordingly, cancel the orders of the CIT(A) and restore those of the ITO on this point. 13. In the result, the appeals preferred by the assessee are dismissed while the appeals filed by the Department are party allowed.
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1982 (8) TMI 95
Development Allowance, Weighted Deduction ... ... ... ... ..... t that the actual export of goods was not a condition precedent for granting allowance under section 35B and that the advertisement and publicity made outside India of the goods and services, in which the company dealt, was enough. In the present case, as already stated, there is no evidence to prove that any advertisement or publicity was made outside India, of the bags and the containers manufactured by the assessee. That being so, the aforesaid authority does not advance the case of the assessee in any way in these circumstances, it cannot be held that the expenditure in question was incurred by the assessee in connection with any export business. The assessee is, therefore, not entitled to claim weighted deduction in respect thereof. We, accordingly, cancel the orders of the Commissioner (Appeals) and restore those of the ITO on this point. 13. In the result, the appeals preferred by the assessee are dismissed, while the appeals filed by the department are partly allowed.
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