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1986 (10) TMI 90 - ITAT HYDERABAD-B
... ... ... ... ..... consistent with the theory that it was a mistake. The assessee firm did not close their books of accounts on 30th Nov., 1981. But, the assessee firm had accepted that the outgoing partners are entitled to the profit upto the date of their retirement. Since books were not closed, there must be a method acceptable to all the partners for ascertaining the profit upto 30th Nov., 1981. This method was to estimate the net profit on the turnover upto 30th Nov., 1981. This has been done. However, Sri Jayakar pointed out that even in the allocation made appears to be erroneous. Though, both the partners are entitled to equal share or profit, yet one partner was credited with Rs. 820 and the other partner Rs. 6,177. This has to be a mistake. Again on the basis of the ratio in Venkateshwararao s case, this is an honest mistake and should not stand in the way of registration. 11. In view of the above, we are of opinion that the assessee is entitled to registration. The appeal is allowed.
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1986 (10) TMI 89 - ITAT HYDERABAD-B
Interest Income, Interest Payable, Liability To Deduct Tax, Tax At Source ... ... ... ... ..... expression takes within itself all the possible successors entitled to receive any funds in the case of discontinuance of business. If we keep this in mind it would be seen that the recipient who will be assessed can only be the recipient who is beneficially entitled to the income embedded in the receipts. 23. Therefore, we come to a finding that Y.V. Subba Rao individually no doubt received the amounts but he is not the recipient of these funds. He has to account for it to the three firms who had actually done the work and, therefore, who are entitled to these receipts. Shri Subba Rao, therefore, received it only in the capacity of a trustee or as a representative being himself a partner of the three firms. The beneficiaries are the recipient or the three firms or their partners. They have to be assessed in respect of these receipts. We, therefore, agree with the findings of the Commissioner though for entirely different reasons. 24. In the result, the appeal stands allowed.
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1986 (10) TMI 88 - ITAT HYDERABAD-B
Assessment Year, Estate Duty, Valuation Officer ... ... ... ... ..... tion was validly exercised. Thereafter, there is no fetter on the Commissioner to look into any other matter. 10. We in this case are concerned with the assumption of jurisdiction. For that purpose, we must see whether the Commissioner has materials to show that the order of the WTO is erroneous and prejudicial to revenue. The records show that the WTO had adopted the value given by the valuation cell itself. Therefore, the WTO was guided by the experts in valuation. It is difficult to hold that such valuation is erroneous without any other materials in the records. It is true that the report refers to valuation pertaining to earlier assessment years. However, there is binding circular which requires the WTO not to disturb valuation of immovable properties for two or three years. 11. If these are kept in mind it will be seen that the assumption of jurisdiction by the Commissioner was not valid. We will, therefore, set aside the order under section 25(2) and allow the appeals.
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1986 (10) TMI 87 - ITAT HYDERABAD-A
Agricultural Land, Gift Tax ... ... ... ... ..... to incur expenses on the occasion of her marriage. The ratio laid down in the above cases would squarely apply to the instant case. We have already pointed out that under section 20 even mother is under an obligation to maintain her daughter. That obligation includes to get her daughter married. Hence the assessee in the discharge of her obligation to maintain her daughter has given the gift of 3 acres of agricultural land on the occasion of her marriage. There was a custom in the Kamma community to which the assessee belongs to make gift on the occasion of the marriage of daughter. The assessee has gifted 3 acres of land as per that custom and in discharge of her legal obligation cast on her. The gift made by the assessee was incidental to the marriage of her daughter. Thus there was no chargeable gift involved, and so the gift of 3 acres of land is not liable to gift-tax. The AAC was justified in cancelling the gift-tax assessment. 6. In the result, the appeal is dismissed.
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1986 (10) TMI 86 - ITAT DELHI-E
Penalty, For Late Filing Of Return ... ... ... ... ..... 9(8) by the Taxation Laws (Amendment) Act, 1970, the aforesaid ruling of the Hon ble Supreme Court cannot apply to the assessment year 1978-79. This contention, therefore, has to be rejected. 22. It was also contended on behalf of the assessee that no notice under section 139(2) had been issued to the assessee and, therefore, the return having been filed voluntarily, there was no contumacy on the part of the assessee. This contention too, in our view, has no force. Such an argument can help an assessee who is ignorant of law. We have, however, before us an assessee, who is conscious of its legal obligation and knew fully well that it had to file a return of its income up to30-6-1978. That is why it applied for extension of time twice. In such circumstances the non-issue of a notice under section 139(2) can be of no avail to the assessee. 23. No other argument was raised before us and in view of the above discussion, we find no force in this appeal. It is accordingly rejected.
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1986 (10) TMI 85 - ITAT DELHI-E
Closing Stock, Total Income ... ... ... ... ..... cancelling the penalty more particularly when the assessee had conceded before the Tribunal that it was not possible to explain the discrepancies found out by the revenue which explicitly meant that the discrepancies pointed out by the revenue were real and genuine. We, therefore, reverse the order of the Commissioner (Appeals) and restore that of the ITO. 8. Since we have dealt with on the facts of this case, we found it proper to deal with the case law cited both for and against the assessee that when an addition on account of gross profit was made, no penalty should be imposed. At the cost of repetition we may point out that there is a difference between an addition made on account of gross profit being lower from an addition made taking gross profit as a measure when substantial omissions were found in the accounts. The latter would amount to concealment of income for there was no explanation and the former may be routine addition. 9. In the result, the appeal is allowed.
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1986 (10) TMI 84 - ITAT DELHI-E
Expenditure Incurred, Guest House ... ... ... ... ..... tion (3) . Therefore, when sub-section (4) excludes sub-sections (1) and (3) of section 37, it extinguishes the exclusionary words not being expenditure of the nature described in sections 30 to 36 used in section 37. The effect of the non obstante clause in sub-section (4), therefore, is that it overrides all other provisions in the Act wherever they may be found. Even otherwise it is settled rule of interpretation of statutes that the specific overrides the general. Sub-sections (3) and (4) of section 37, specifically deal with certain types of expenditure and, therefore, they will override the general provisions contained, inter alia, in sections 30 and 32. In our view therefore, the learned Commissioner (Appeals) was wrong in allowing deductions on account of repairs and depreciation connected with the guest house. We, therefore, cancel his order on this point and restore the one made by the ITO. 7 to 13. These paras are not reproduced here as they involved minor issues.
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1986 (10) TMI 83 - ITAT DELHI-D
Accounting Year, Development Allowance, Foreign Company, Weighted Deduction ... ... ... ... ..... or gaining fish which was stock-in-trade of the assessee. Whatever expenditure was eligible for weighted deduction had already been allowed as such by the IAC and we find that apart from the agitation against the disallowance of Rs. 49,50,016, the assessee had not raised any objection to the disallowance out of rest of the expenses. In other words, whatever allowance under section 35B had been made by the IAC alone was justified and that the assessee had no case for grant of export markets development allowance on expenses of Rs. 49,50,016. Before deciding the issue as above against the assessee and in favour of the revenue, we had carefully gone through the expert s opinion of Shri N.K.P. Salve, Chartered Accountant. For the reasons given by us as above, we have not been able to subscribe to the opinion of Shri N.K.P. Salve which was made the main plank of arguments by the learned authorised counsel of the assessee. 6. In conclusion, the appeal fails and is hereby dismissed.
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1986 (10) TMI 82 - ITAT DELHI-C
Supreme Court, Tribunal's Order ... ... ... ... ..... any justification to recall the order of the Tribunal. 7. The learned counsel for the assessee has mentioned various authorities for the proposition that if a counsel errs in law his mistake should not be allowed to affect the interest of his client. We do not find any such mistake made by the learned counsel for the assessee nor it is so apparent because it cannot be said that the special leave petition s dismissal by the Supreme Court in another case has settled the law on the issue that was in appeal before the learned Commissioner (Appeals). In fact this position is accepted even in the miscellaneous application when it is stated that the dismissal of the special leave petition by the Supreme Court as referred to above had, the effect of reducing the importance of the said decision of the Special Bench of the Tribunal . On the above facts, we do not find any justification, despite authorities cited, to recall the order of the Tribunal. Miscellaneous application dismissed.
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1986 (10) TMI 81 - ITAT DELHI-B
Assessment Year, Income From Property, Religious Trust, Revised Return ... ... ... ... ..... ch other summarised as follows 1. Since the trust return was to be taken as under section 139(4A), by the statutory built in safeguards in the said sub-section the return was to be treated for all purposes as under section 139(1) and, therefore, could be revised and since the audit report was admittedly filed with the second return, there was no default under section 12A(b), as held by the ITO 2. There was no requirement that the audited balance sheet must be appended to the return and it would have been sufficient compliance if the audit report was filed before the completion of assessment, whereas in this case, it was submitted even before the assessment proceedings were initiated and 3. That the Hon ble Delhi High Court in O.P. Malhotra s case has in terms stated that a return under section 139(4A) can be revised and since the audit report was appended with the return of10-10-1985the requirement of section 12A(b) stood completed. 10. In the result, the appeal is dismissed.
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1986 (10) TMI 80 - ITAT DELHI-B
A Partner, Actual Cost, Written Down Value ... ... ... ... ..... i Shanker (P.) Family Trust IT Appeal Nos. 5332, 5333 and 5334, dated 19-3-19851 and Mukand Family Trust IT Appeal Nos. 5193 to 5195, dated 25-6-1985 on which the learned authorised counsel of the assessee has placed reliance and by which the orders of the Commissioner, passed under section 263 had been cancelled but I find that the facts in the present case are significantly distinguishable. Since the learned authorised counsel for the assessee has not been able to establish that the material/details as mentioned in paragraph 2 of the Commissioner s order had been furnished before the ITO before he completed the assessment and since the assessee had failed to furnish any reply to the show-cause notice issued by the Commissioner prior to the passing of the impugned order under section 263, I would agree with the conclusion arrived at by the learned Judicial Member in the special facts and circumstances of the case. 2. The appeals by the assessee fail and are hereby dismissed.
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1986 (10) TMI 79 - ITAT DELHI-A
Fair Market Value, Immovable Property, Movable Property ... ... ... ... ..... d for non-residential purposes. Here we are concerned with a building which is exclusively non-residential. We have also to keep in mind that with unabated inflation investment in immovable property has a distinct advantage inasmuch as the money invested therein gets insured against inflation and, therefore, the rate of interest obtainable on company deposits, etc., cannot properly be compared to investment in immovable property. Looking to the economic conditions and the nature of the property in question, we are of the view that the multiplier of 12.5 adopted by the WTO was quite reasonable for determining the fair market value of the property in question. The learned counsel for the assessee did not point out to us any material on record to show that properties like the one in question could be purchased for a lesser price than the one determined by the WTO. 3. For the reasons given above, we are of the opinion that this appeal has no force and it is accordingly dismissed.
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1986 (10) TMI 78 - ITAT CHANDIGARH
... ... ... ... ..... hat the assessing authority can do. The circular issued by the CBDT is a beneficial circular and administrative in nature. It is applicable to all pending proceedings whether before the assessing authority or the appellate authority by the virtue of the above decisions. The Tribunal, therefore, has jurisdiction to take cognizance of the CBDT circulars in cases where appeals are pending before it. In view of the above circular of the CBDT, we vacate the order of the IAC (Acquisition) thereby dropping the proceedings initiated against the assessee. We have taken similar view in the case of Shri Rai Sahib Ludhiana vs. IAC of Income-tax, Acquisition Range, Ludhiana, vide our order dt. 25th July, 1986 in IT Acq. Appeal No. 10 of 1986. 7. Since we have vacated the order of the IAC in view of the circular of CBDT referred to above, we do not consider it necessary at this stage to go into merits of the order passed by the Competent Authority. 8. In the result, the appeal is allowed.
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1986 (10) TMI 77 - ITAT CHANDIGARH
Unquoted Shares ... ... ... ... ..... y reduced the value ignoring the appreciation in prices since the last valuation report by the registered valuer. The learned counsel for the assessee, on the other hand, has supported the order of the AAC. 9. We have considered the rival submissions. While allowing relief, the AAC has relied on the judgment of the Punjab and Haryana High Court in the case of Jaswant Rai v. CWT 1977 107 ITR 477. The submission by the learned departmental representative is that this ruling of the High Court has since been overruled by the same High Court and, therefore, the same does not hold the field. Taking into consideration that the value of Rs. 26,563 was adopted in 1974 and the valuation date before us is 31-3-1976, we consider the value fixed by the WTO at Rs. 32,000 as reasonable. The order of the AAC is, therefore, reversed and that of the WTO restored. 10. In view of the above discussions, the appeals by the revenue are allowed and the cross-objections by the assessee are dismissed.
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1986 (10) TMI 76 - ITAT CALCUTTA-E
Business Expenditure, Capital Expenditure ... ... ... ... ..... leases was, therefore, capital expenditure. 10. There was yet a third type of transaction. The assessee by two sale deeds dated 5-4-1972 and 5-8-1972 purchased right, title and interest for raising sub-soil sand on digging surface of the lands mentioned in the said sale deeds for consideration of Rs. 24,878 and Rs. 35,000 respectively for a period of 9 years and 11 years and 11 months respectively. Such right is definitely a benefit to arise out of land and land is immovable property within the meaning of section 3(26) of the General Clauses Act, 1897. Since the right is to extract sub-soil sand it cannot be placed on different footing than that under the lease considered above. 11. Thus, the entire expenditure was capital expenditure and the assessee is not entitled to deduction of any part of it as revenue expenditure. The order to the AAC is, therefore, reversed and that of the ITO is restored. 12. In the result, the appeal is allowed and the cross-objection is dismissed.
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1986 (10) TMI 75 - ITAT CALCUTTA-C
... ... ... ... ..... ar under consideration. As such the CWT (A) was not justified on the basis of the Circular to delete the addition made by the WTO. He however did not consider the addition on merit because of his reliance on this Circular. So in setting aside his order we direct the CWT(A) to examine the justifiability of the addition in the valuation of the agricultural land after excluding the circular from consideration. 7. The next ground relates to the valuation of jewellery. In accordance with our finding at paragraph no. 4 above, we set aside the order of the CWT(A) on this point and direct him to examine the question of valuation of the jewellery on the material on record without applying the Board s Circular. 8. The next ground relates to inclusion of CDS amount in the total wealth of the assessee. In accordance with our finding at paragraph no. 5 above, we set aside the order of the CWT(A) on this point and restore the order of the WTO. 9. As a result, both the appeals are allowed.
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1986 (10) TMI 74 - ITAT CALCUTTA-C
Appellate Tribunal, Appealable Orders ... ... ... ... ..... oller himself and he cannot leave that matter for decision in the hands of the Controller. No such questions can be remitted for enquiry to the Controller which are within the competence of the Controller to decide. Even the power of the Appellate Controller to order further enquiry to be made by the Controller even in respect of such matter which the Controller is competent to dispose of, is not unfettered. A remand can be ordered only when the Appellate Controller/appellate authority is unable to reach any conclusion from the material on record and further enquiry is needed. The Appellate Controller may no doubt, pass such order as he thinks fit but such order should be within the realm of his jurisdiction. He cannot abdicate his own function into the hands of the lower authority. 4. Order of the Appellate Controller is, therefore, set aside and the appeal is referred back to him for disposal according to law. 5. In the result, the appeal is allowed for statistical purpose.
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1986 (10) TMI 73 - ITAT CALCUTTA-A
Assessment Order ... ... ... ... ..... nalised. In order to give relief against such harshness and in view of the judgment of the Hon ble Supreme Court in Seghu Buchiah Setty s case the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 was enacted. It has been extended to the 1953 Act. First proviso to section 3(1) of the said Act reads as under Provided that if as a result of any final order such Government dues (other than annuity deposit) have been reduced and the penalty imposed on the assessee for default in payment thereof exceeds the amount so reduced, the excess shall not be recovered and if it has already been recovered, it shall be refunded to the assessee on an application made by him to the taxing authority within such time and in such manner as may be prescribed by rules made under this Act 5. In view of the aforesaid provision no penalty is imposable on the accountable person since the assessment order has been quashed by the Tribunal. The accountable person thus succeeds.
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1986 (10) TMI 72 - ITAT BOMBAY-D
... ... ... ... ..... of a tenancy and not in the case of a licence, like providing accommodation by the employer to the employee. We would appreciate the distinction as brought out by the learned departmental representative in a case of a tenant and licence, but he fail to understand as to how can a person expect more rent from an employee than from a tenant. The same yardstick, in our opinion, should apply in both cases. If to expect a higher rent from a tenant is unreasonable, as held by the Supreme Court, the same should be held unreasonable in those cases where the accommodation is provided by the employer to the employee on licence basis. We, therefore, set aside the orders of the authorities below. The matter is restored back to the file of the ITO with the direction that he would determine the perquisite value of the accommodation by taking into consideration the standard rent or the municipal valuation, whichever is higher. 7. In the result, the appeal will be treated as partly allowed.
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1986 (10) TMI 71 - ITAT BOMBAY-D
Capital Receipt, Carrying On Business, Foreign Company, Revenue Receipt ... ... ... ... ..... account of its marketing operation up to 29-3-1976 also passed to CORIL (Government company) along with its right, title and interest and the other liabilities. 17. Section 9(2) is also relevant in the present context. Whatever the liabilities of CIL had in relation to its undertakings in India which included the obligation to pay the tax for the profits (if any), such liability is deemed to have become the liability of CORIL (Government company), the assessee in this case, because the GOI transferred such liability also to CORIL (Government company). For the above premises, we hold that the assessee is liable for the profits earned by CIL in respect of its marketing operations up to 29-3-1976. The ITO had rightly included Rs. 10,62,970 in the computation and the Commissioner (Appeals) was in error in directing its deletion. We uphold the inclusion. 18 to 23. These paras are not reproduced here as they involve minor issues. 24. In the result, the appeals are allowed in part.
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