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1983 (4) TMI 9
Business Expenditure, Reference ... ... ... ... ..... on, we do not find any justification for directing a reference on the questions set out above. The learned counsel for the assessee has, however, pointed out that different view has been taken by this court in CIT v. Sri Venkateswara Bank Ltd. 1979 120 ITR 207 and CIT v. Srinivasa Perumal Bank Ltd. 1981 131 ITR 692. But we find that in those cases the gratuity liability has been worked out and those amounts have actually been paid to the employees whose services with the assessee had come to an end after the transfer of a portion of the business. On the facts of these cases, it has rightly been held that the actual payment of gratuity to the employees can be taken to be a revenue expenditure entitled to deduction. But in this case there is no direct payment of gratuity to the employees who have been transferred nor the conditions laid down in s. 40A(7) are satisfied. Therefore, we are not inclined to refer the above questions. The petition is, therefore, dismissed. No costs.
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1983 (4) TMI 8
Association Of Persons ... ... ... ... ..... ersons or a body of individuals according to s. 143(3) read with s. 2(31)(v) of the Act. When such is the position, we are unable to see any reasoning in the observation of the Tribunal for holding that the assessees had been pressed by the circumstances to pretend to be the joint owners of the cash, as though the Department had created such a situation for the purpose of assessing them as an association of persons. We are completely disinclined to give any weight to the above, observations of the Tribunal, which is prima facie, unsustainable and not based on any material. In the light of the above discussion, we answer the first set of three questions in favour of the Revenue. In view of our answer to the first set of three questions, the other questions which arise out of the protective assessments made by the Revenue do not require to be answered and, hence, these questions are returned unanswered. In the circumstances, we direct the parties to bear their respective costs.
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1983 (4) TMI 7
Deduction U/S 80J, Gratuity, New Industrial Undertaking ... ... ... ... ..... tute a provision representing fairly accurately a known and existing liability for the year in question and, therefore, such a provision which represents the discounted present value of a future liability under the terms of a gratuity scheme on a scientific basis has to be allowed as deduction in the relevant assessment year during which such appropriation has been made. Having regard to the above principle laid down by the Supreme Court, we have to hold that the deduction claimed by the assessee-company on an actuarial basis of the present discounted value of the future liability for gratuity has to be allowed. Therefore, we have to agree with the Tribunal on this aspect of the case also. The result is, we have to answer both the questions in the affirmative and against the Revenue. Accordingly, both the questions are answered in the affirmative and against the Revenue. The Revenue will pay the costs of the assessee. Counsel s fee Rs. 500 (rupees five hundred only). One set.
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1983 (4) TMI 6
Accounting, Income ... ... ... ... ..... e learned standing counsel, that relief will have to be given as and when the money is refunded, is devoid of merit and substance because the very underlying principle behind the mercantile system is that the moment it is received and entered in books of account, it will be deemed that the liability has accrued at that point itself and it does not depend upon the time, when it is determined and becomes due, unlike the cash system wherein the liability is discharged as and when it is paid or made. Hence we hold (i) that the amounts collected in the form of sales tax did not constitute trading receipts and (ii) that, in any event, since the assessee followed and maintained the mercantile system of accountancy and which in turn creates an obligation and a liability to repay as and when it is refunded, the same cannot be included in the income of the assessee for the purpose of computation. In the result, the question is answered in the affirmative and in favour of the assessee.
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1983 (4) TMI 5
Cash Credits, Penalty, Reference ... ... ... ... ..... nalty appeal, did not take into account all those considerations. In this view of the matter, a question arises whether they were all relevant considerations or not and whether the sale price as shown in the statement of the Excise Department would unchallengeably be the price realised by the assessee. As such, a question of law does arise relating to these incomes for the purpose of penalty. The upshot of the foregoing discussion is that a question of law does arise from the order of the Tribunal dated September 11, 1975, as indicated by us hereinabove. The points of law arising have been indicated by us in our above discussion and, in our view, all that can be covered in the question proposed by the Department, as extracted by us in para. 2 of this order. In the result, we allow the application of the Department and direct the Tribunal to state a case and refer to this court for its answer the question of law extracted in para 2 of this order. We make no order as to costs.
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1983 (4) TMI 4
Alternate Remedy, Depreciation, Mistake, Writ ... ... ... ... ..... se 1971 82 ITR 50 (SC), squarely applies and it cannot be said that a notice under s. 154 could have been served because in my opinion the jurisdictional fact is wanting and missing. Mr. Singh has also raised an objection that since in reply to showcause notice the assessee is entitled to convince the ITO that s. 154 is not tenable, this court should not interfere. It is established law by now that when jurisdictional facts are missing, then this court need not compel the assessee to undergo the entire ordeal of showing cause to the ITO first and then file an appeal under the hierarchy before the Department under the Act. The question would be different if there is doubt about the application of the principles but in the instant case, it is patent that jurisdictional fact regarding mistake being apparent on the record, is wholly and totally missing. In view of the above, the impugned notice is quashed. The writ petition is consequently accepted without any order as to costs.
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1983 (4) TMI 3
Assessment, Company, Provisional Assessment, Surtax ... ... ... ... ..... the assessee. He can, however, reject claims which are clearly and indisputably untenable and about which a different view is not rationally possible. We may make it clear that, in our opinion, the ITO in making an assessment under s. 7 of the said Act is clearly bound by the decision of single judge or a Division Bench of the court within whose jurisdiction he is operating as well as, of course, a decision of the Supreme Court. The mere fact that an appeal has been preferred against such decision or is pending can make no difference whatever to the binding nature of that decision, so far as the ITO is concerned. In view of this, although it is not necessary, we may make it perfectly clear that the decision appealed against shall continue to be binding on all ITOs operating within the jurisdiction of this court for the purposes of making provisional assessments under s. 7 of the said Act, unless a contrary view is taken by a Division Bench of this court or the Supreme Court.
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1983 (4) TMI 2
Advance Tax, Appeal To AAC, Income ... ... ... ... ..... erent High Courts. Since section 139 is not one of the items enumerated under section 246 of the Act, the ratio of the above decision will he equally applicable to case under section 217 of the Income-tax Act as well. For all these reasons, we hold that the appeal lies against the charging of penal interest under section 217 of the Income-tax Act, when the ground regarding the levy of interest is raised along with other rounds of appeal. In the result, we answer question No. 1 in the affirmative and against the assessee, whereas question No. 2 is answered in the affirmative and in favour of the assessee. Learned counsel for the assessee, Sri Y. V. Anjaneyulu, made an oral request for grant of leave to appeal to the Supreme Court. We certify it to be a fit case for appeal to the Supreme Court inasmuch as a similar point relating to question No. 1 is already before the Supreme Court in an appeal in CIT v. Smt. Sankari Manickyamma 1976 105 ITR 172. Accordingly, leave is granted.
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1983 (4) TMI 1
Capital Gains ... ... ... ... ..... ransfer transferring the immovable property at door No. 20, G. N. Chetty Road, Madras, there is no liability to tax on capital gains. Since this finding of the Tribunal is sufficient to justify its conclusion that there is no liability to tax on capital gains in this case, we are not going into the conclusion of the Tribunal that the conversion of individual property into partnership property does not involve any transfer of property as that question is not free from difficulty. Therefore, while sustaining the finding of the Tribunal that since there is no registered document, there is no transfer of immovable property and hence no liability to tax on capital gains, we are not expressing any opinion on the finding of the Tribunal that conversion of individual property into partnership property does not involve transfer of property. In this view of the matter, we do not see any justification for directing a reference in this case. The tax case petition is dismissed. No costs.
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