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2001 (3) TMI 77
Income From Property ... ... ... ... ..... said agreement was to let out the portion of the said property to various occupants by giving them additional right of using the furniture and fixtures and other common facilities for which rent was being paid month by month in addition to the security free advance covering the entire cost of the said immovable property. In view of the facts and law discussed above we hold that the income derived from the said property is an income from property and should be assessed as such. In the light of our aforesaid discussion we answer question No. 1, in the negative, i.e., in favour of the Revenue and against the assessee. In fact there was a relationship of landlord and tenant between the assessee and the persons who hired the office accommodation. We answer question No. 2 also in the negative, i.e., in favour of the Revenue and against the assessee. Question No. 3 also, we answer in the negative, that is, in favour of the Revenue and against the assessee. Y. R. MEENA J.---I agree.
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2001 (3) TMI 76
Dividend, Special Deduction ... ... ... ... ..... the Revenue has not controverted these facts referred. In CIT v. Indian Iron and Steel Co. Ltd. 1985 156 ITR 314, in the concluding paragraph, this court has observed as under Once the dividend income is included in the assessment and assessed, the assessee is entitled to all the benefits flowing from such inclusion under. the relevant provisions of the Act. When the basic test for deduction under section 80M is in whose hands the dividend income is assessed, in that case the assessee is entitled to all the benefits, flowing from such inclusion of dividend income, under the relevant provisions of the Act. Following the proposition laid down by this court in the case of CIT v. Indian Iron and Steel Co. Ltd. 1985 156 ITR 314, we answer the question referred in the affirmative, i.e., in favour of the assessee and against the Revenue. The reference so made is accordingly disposed of. All parties are to act on a xeroxed signed copy of this dictated order on the usual undertaking.
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2001 (3) TMI 75
Offence And Prosecution, Mode of Accepting Deposits, Change of Law ... ... ... ... ..... he respondents otherwise than by cheque or bank draft after the omission of section 276DD of the Income-tax Act, and, there fore, the complaint was rightly dismissed by the Magistrate. These two decisions clearly support the contention of the respondents. In these circumstances, I find no grounds for interference under section 482 of the Criminal Procedure Code. Therefore, this petition is liable to be dismissed on this ground only. Of course, the respondents also contend that this is only a second revision petition under the garb of a petition under section 482 of the Criminal Procedure Code, and is also, therefore, not maintainable. But, in view of the findings in the foregoing paragraphs, I am of the view that it is not necessary to go into this question. Resultantly, the petition fails and is dismissed. However, this shall not preclude the right of the income-tax authorities to proceed against the respondents for the imposition of penalty, if any, in accordance with law.
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2001 (3) TMI 74
Recovery of Tax, Waiver of Interest ... ... ... ... ..... en, according to the assessee, the enforcement of the demand for the payment of tax had been stayed. The Commissioner, in the course of his order, has observed that interest was demanded, immediately after the tax was paid, for the period of delay. The Commissioner while rejecting the prayer for waiver has applied the relevant tests. He has found that the assessee would not suffer any genuine hardship by having to make the payment as he has found that the assessee had earned substantial profits, even though for some years it had incurred loss and that there would be no difficulty in paying the amount of interest. He has also found that the default committed by the assessee could not be said to be due to circumstances beyond its control. The conclusions recorded by the Commissioner are supported by the facts to which he has adverted in the course of his order. I do not find any merit in the petition and the same is dismissed. Consequently, connected W. M. P. is also dismissed.
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2001 (3) TMI 73
Business Expenditure, Company, Surtax ... ... ... ... ..... mmission was paid to the director as part of his remuneration or whether it was paid for some other services rendered by him. It is not clear whether the expenditure incurred by the assessee-company was to provide any benefit to the two directors as directors or whether the payment was made by the assessee-company for some other services rendered by the two directors. In this reference, we are concerned with the assessment year 1976-77. In the circumstances, we answer question No. 3 in the negative, i.e., in favour of the assessee and against the Department, on the footing that the decisions of the Tribunal in Pai Paper and Allied Industries Pvt. Ltd. and Nav Ketan International Films Pvt. Ltd. delivered earlier have been rightly overruled by the Bombay High Court in the aforestated cases reported in Pai Paper and Allied Industries Pvt. Ltd. v. CIT 1994 207 ITR 410 and Nav Ketan International Films Pvt. Ltd. v. CIT 1994 209 ITR 976. Accordingly, the reference is disposed of.
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2001 (3) TMI 72
Estate Duty, Exemption, House Property ... ... ... ... ..... een used for residence. As the factual scenario goes to show the house was kept in readiness for use and in fact was not let out after May 1, 1973. In CWT v. Mrs. Avtar Mohan Singh 1972 83 ITR 52, this court also had an occasion to consider the significance of the words for residential purposes in section 5(1)(iv) of the Wealth-tax Act. Views similar to the one we have noted above were expressed by this court. The use of the house by the assessee has to be exclusive . In this context, exclusiveness does not mean loneliness. It does not require that the assessee should live alone in the house. Use of the house, like possession of the house, has two aspects, namely, actual use without claim to any right and use with the claim to a right to do so. In view of the above position, the Tribunal s view cannot be maintained. The question referred, therefore, is answered in the negative, in favour of the present accountable person and against the Revenue. This reference is disposed of.
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2001 (3) TMI 71
Assessment, Additions To Income, Firm ... ... ... ... ..... the income of the assessee irrespective of the fact whether some other persons have already submitted the returns in respect of the income and have also been assessed on the basis of declaration submitted by them. We are not concerned with the remedies which the other person may follow. Accepting the assessee s contention would result in the startling consequence of accepting that where a person designedly diverts his profits to other persons to reduce his tax burden, he can escape his actual tax burden by inducing such other persons to suffer taxation on the income so directed voluntarily. We, therefore, hold that the Tribunal was not justified in directing to delete the additions of Rs. 84,769 and Rs. 22,127 from the income of the assessee-firm which the Tribunal has found to be the income of the assessee-firm and not of the other persons named above. Accordingly, we answer the question referred to us in the negative, i.e., against the assessee and in favour of the Revenue.
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2001 (3) TMI 70
New Industrial Undertaking, Special Deduction, Condition Precedent ... ... ... ... ..... as to be noted that on the last date of the assessment year, the requisite number was there in the present case in addition to the fact that for a substantial period of the year that was the position. Substantial compliance was all that was required. In order to qualify for the relief and satisfy the requirements of the provision, the undertaking must have employed ten or more workers substantially during the period for which relief was claimed. There could be no hard and fast rule by which one could determine whether there had been substantial compliance. It is for the authority or the court to so decide based upon the facts before it. A similar view has been expressed by the Bombay High Court in CIT v. Harit Synthetic Fabrics Pvt. Ltd. 1986 162 ITR 640 and CIT v. Ormerods (I) (P) Ltd. 1989 176 ITR 470 (Bom). The above being the position, the question referred is answered in the affirmative, in favour of the assessee and against the Revenue. The reference stands disposed of.
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2001 (3) TMI 69
Export, Special Deduction ... ... ... ... ..... on record by the assessee showing that reasons beyond his control existed which prevented him from bring the money into India before March, 1999. Thus conditions requisite of exercise of power by the Commissioner, having been shown to exist, the Commissioner was bound to exercise discretion for extending the period as prayed for by the assessee up to March 31, 1999. On his failure to exercise such power, in the words of Earl Cairns, the court will require it to be so exercised. As a result, the order dated September 17, 1999 (annexure 4), deserves to be quashed and is hereby quashed. Since annexure 5 is solely based on annexure 4, so far as it relate to additions made in pursuance of an order under section 80HHC the same must also fall to ground. Accordingly, this writ petition is allowed, annexures 4 and 5 are quashed and the respondents are directed to make a fresh order in accordance with law in the light of the observations made above. There shall be no order as to costs.
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2001 (3) TMI 68
Income From Undisclosed Sources, Finding of Tribunal Vitiated ... ... ... ... ..... r material, or if it is contrary to evidence. Similar is the position if it is perverse or there is no direct nexus or link between the conclusion of fact and the primary fact upon which that conclusion is based. Where the Tribunal acts on partly relevant and partly irrelevant materials, and it is not possible to say to what extent the latter has influenced its mind, the finding is vitiated because of use of irrelevant material That gives rise to a question of law. This position has been succinctly stated by the apex court in Dhirajlal Girdharilal v. CIT 1954 26 ITR 736 CIT v. Daulat Ram Rawatmull 1973 87 ITR 349. Where the Tribunal misdirects itself in law in basing its conclusions on some evidence ignoring other essential matters on record, a question of law arises (see CIT v. Radha Kishan Nandlal 1975 99 ITR 143 (SC)). The answer to the question, therefore, is in the negative, in favour of the Revenue and against the assessee. The reference application stands disposed of.
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2001 (3) TMI 67
Loss, Dealer in Shares ... ... ... ... ..... red to non-production of the share broker by the assessee does not disentitle the assessee for claim of loss in a genuine transaction of shares. Considering the aforesaid facts and our view expressed in the case of CIT v. Carbo Industrial Holdings Ltd. 2000 244 ITR 422 (Cal), we answer question No. 1 whether the finding of the Tribunal is based on material, in the affirmative and whether this finding of the Tribunal is perverse, we answer it in the negative, i.e., in favour of the assessee and against the Revenue. In the second question the issue has been raised whether the Tribunal was justified in holding that the finding of the Income-tax Officer and the Commissioner of Income-tax (Appeals) are based on presumption, we answer in the negative, i.e., in favour of the assessee and against the Revenue. The reference application for both the assessees thus stands disposed of accordingly. All parties are to act on a signed xerox copy of this dictated order on usual undertaking.
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2001 (3) TMI 66
Appeal To Appellate Tribunal ... ... ... ... ..... ecifically remanded the present case to the Tribunal in view of the aforesaid well defined principles. The impugned order is accordingly set aside. The Tribunal to issue fresh notice to the parties, hear them and redecide the case according to law. We did hear the respondents learned counsel at some length. Inter alia, he tried to defend the order by submitting that in those of the cases where the appellate authority reaches a finding that interference is not necessary, it may not be required to record detailed observations or reasoning. While there is no quarrel with that principle, what we need to reiterate is that even in such instances, the order does not have to be long but the quality of the order must indicate that the authority has applied its mind to all aspects of the case factually and legally and that there is justification for its decision irrespective of whether it concurs or differs. The appeal accordingly succeeds and stands disposed of. No order as to costs.
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2001 (3) TMI 65
Reference, Additions To Income ... ... ... ... ..... n affected by labour disputes, that for the industrial health of the business as a whole, it was thought just and necessary that the industrial dispute in that one part of the business be stopped. This was the purpose for which the payment was made and it was, therefore, incurred for the purposes of the business . It further held as follows The High Court overlooked the cardinal principle that it is the Tribunal which is the final fact-finding authority. A decision on the facts of the Tribunal can be gone into by the High Court only if a question has been referred to it which says that the finding of the Tribunal on the facts is perverse, in the sense that it is such as could not reasonably have been arrived at on the material placed before the Tribunal . So far as the questions of law in the present case are concerned, we do not find any question of law referred as stipulated by the Supreme Court. Hence, we answer the questions in the positive and in favour of the assessee.
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2001 (3) TMI 64
Return, Loss, Time-Limit For Filing ... ... ... ... ..... pursuance of a notice under section 148. The facts of that case are totally different vis-a-vis the facts of the present case. In the present case, the period prescribed under section 139(4) did not expire though the return was filed in pursuance of a notice under section 148. As we have already held earlier, by issuing a notice under section 148, the statutory rights conferred on the assessee cannot be taken away and if so the assessee is entitled to file a return at any time before the expiry of the period prescribed under the statute. Therefore, this decision is not of any assistance to the Revenue. For the above foregoing reasons, we agree with the view taken by the Tribunal that the assessee is entitled to the benefit of the loss to be determined and carry forward for setting off against the income of the subsequent years. Accordingly, we answer the questions referred for the opinion of this court in the affirmative and against the Revenue and in favour of the assessee.
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2001 (3) TMI 63
Salary, Perquisite ... ... ... ... ..... tting out the furniture at an uniformly standard rate so as to bring it within the purview of the definition of perquisite. As I do not find any material that the bank concerned has made any concession in the matter of realisation of rent vis-a-vis the other employees, the rate charged for realisation of rent by the bank concerned from all the employees who are similarly situate and placed is uniform and there is no discrimination. Therefore, I hold that the recovery which has been done already and is being done is illegal and unjustified and there is no sanction under the law. Therefore, the writ petition succeeds. Whatever deductions have already been done the same shall be adjusted accordingly. I direct the respondent-bank not to deduct any amount save and except the standard deduction which is being done. There will be no order as to costs. All parties concerned are to act on a signed copy of the minutes of the operative portion of this judgment on the usual undertakings.
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2001 (3) TMI 62
Penalty, Return, Delay In Filing Return ... ... ... ... ..... the Act. It is correct to say that section 10(22) refers to income of an educational institution which does not form part of the total income. However, reading section 10(22) as a whole, it is clear that in order to avail of the said exemption, the trust should have existed during the relevant period solely for educational purposes and not for purposes of profit and in order to enable the Assessing Officer to ascertain whether the assessee existed solely for educational purposes and not for profit purposes, the return was required to be filed because in the absence of the return, it was not possible for the Assessing Officer to evaluate the exemption as laid down by the aforestated judgment of the Supreme Court reported in Aditanar Educational Institution v. Addl. CIT 1997 224 ITR 310. Accordingly, the above question is answered in the affirmative, i.e., in favour of the department and against the assessee Accordingly, both the appeals are disposed of. No order as to costs.
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2001 (3) TMI 61
Appeal To High Court, Additions To Income, Unexplained Investments ... ... ... ... ..... failed to prove the said cash credit standing in the name of Mrs. Mehrunnisa Begum. It is trite to state that section 69 clearly lays down the initial burden on the assessee of proving the nature of source of investments not recorded in the books of account. If the assessee fails to explain and prove the nature and source of investments, the unexplained investments would be assessable under section 69 and there would be no burden on the Department to prove that such investments were the income of the assessee. In taking this view, we are fortified by the judgment of the Gauhati High Court in Jatindra Nath Sarmah v. ITO 1978 113 ITR 898, of the Punjab and Haryana High Court in Raghunath Singh v. CIT 1965 57 ITR 562 and of the Calcutta High Court in Smt. Kamala Devi Jhawar v. CIT 1978 115 ITR 401. This appeal does not involve any question of law much less a substantial question of law. In that view of the matter, I.T.T.A. No. 36 of 2001, is dismissed with no order as to costs.
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2001 (3) TMI 60
Business Expenditure, Deductible In Year of Payment ... ... ... ... ..... uthorities and the Judicial Member. As the endorsement made by the purchaser on the order form itself shows, in case of delay the suppliers had the discretion to charge interest at 12 per cent. On a reading of the endorsement made by the purchaser, it was construed by the Accountant Member and the Vice-President that the same amounted to confirmation of a discretion and an option with the suppliers to charge or not to charge interest. That being the position, there was no accepted liability to pay such interest and the assessee was not required to provide for such contingencies, in its accounts. The above being the position, the Tribunal s conclusions cannot be said to be perverse or unreasonable. Merely because a different view may be available to be taken on the factual position that would not give rise to a question of law. Our answer to the question, therefore, is in the affirmative, in favour of the assessee and against the Revenue. Reference is disposed of accordingly.
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2001 (3) TMI 59
Weighted Deduction ... ... ... ... ..... n with the said business for promotion of sale of such services. The evidence clearly shows that the branch office was established for the execution of the contract as per the agreement entered into with the main contractor by the assessee and in fact the contention of the assessee was that successful execution of the contract work itself amounts to advertisement and therefore it is entitled for weighted deduction on that count. The said contention itself shows that the branch office is not intended for promotion of sale of the services with which the petitioner was dealing and under the above circumstances we are unable to accept the assessee s contention that the branch office at Baghdad was established for the purpose of promotion of the sale of services. Accordingly, we answer the questions in the affirmative and against the assessee and in favour of the Revenue and consequently the assessee is not entitled to any weighted deduction. The reference is accordingly answered.
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2001 (3) TMI 58
Gift Tax, Gift, Transfer of Property ... ... ... ... ..... rtition of the property amongst the beneficiaries. It was held that the provisions of section 2(xii) and section 2(xxiv)(a) had application to the facts of the case. On being moved for a reference, the question as set out above, has been referred for the opinion of this court. We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of notice. Learned counsel for the Revenue submitted that, in view of the conclusions arrived at in the income-tax proceedings the Tribunal was justified in its conclusion. The extracted portion of the Tribunal s order, so far as it relates to the income-tax proceedings, clearly shows that the trust deed was a valid one and that being the position there was a transfer in terms of section 2(xii) read with section 2(xxiv)(a) of the Act. In the above background, the question referred is answered in the affirmative, in favour of the Revenue and against the assessee. Reference is accordingly disposed of.
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