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Income Tax - Case Laws
Showing 1 to 20 of 123 Records
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1955 (12) TMI 52 - CALCUTTA HIGH COURT
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... ... ..... by limitation. He therefore cannot be said to have an alternative remedy which is adequate. . 14. This Rule must therefore be made absolute in part. I do not think that it is necessary to quash the assessment order against the firm. It would be sufficient if the enforcement thereof against the petitioner is prohibited. There would be a writ in the nature of Mandamus directing the respondents to forbear from enforcing the assessment order dated 12-12-1947 in the petition mentioned, against the petitioner. But this will not in any way exonerate the petitioner from liability or prevent the respondent from proceeding against the petitioner or against any partner of the dissolved, firm in accordance with law. Nothing in this order relates to the validity of the notice under Section 34 issued to the petitioner on 25-11-1944. If it is a valid notice, nothing in this order will prevent the respondents from taking proceedings under the said notice. There will be no order as to costs.
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1955 (12) TMI 50 - ANDHRA PARDESH HIGH COURT
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... ... ..... h the learned Judges were dealing with a different point, they held that the retrospective operation of the Amending Act would not extend to the extent of reopening an assessment finally made on the basis of the then existing law by the change of law introduced by the amendment. If it was so in the case of final assessment made subsequent to the coming into force of the Amending Act, it would a fortiori be not permissible to reopen the final assessment made prior to the coming into force of the Amending Act on the basis of change in law. 21. In the result we hold that the Income Tax Officer has no jurisdiction to reopen assessments finally made before April 1, 1952, on the basis of the provisions of sub-section (5) inserted in section 35 by the Amending Act 1953. We, therefore, quash the orders made by the First Additional Income Tax officer, Nellore, dated March 20, 1954, and March 31, 1954. The applicant will have have his costs. Advocates fee ₹ 200. Petition allowed.
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1955 (12) TMI 46 - CALCUTTA HIGH COURT
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... ... ..... iew it seems to me that what the assessee company was doing was to set apart tentatively a sufficient sum of money in the form of a trust fund in order that it might be available for the payment of a gratuity to Mr. and Mrs. Harvey or one or the other of them in certain specified contingencies, should those contingencies occur, but making no provision for the application of the money in the event of those contingencies not occurring and no annuity being payable to anyone. It appears to me that payments made to the trustees in those circumstances and under those conditions cannot be said to constitute moneys expended in any real and practical sense of the term and that in holding that there was no expenditure in the present case, the Tribunal was right. The answer to the question referred must, therefore, be in the negative. The Commissioner of Income-tax will have his costs of this reference. Certified for two counsel. SARKAR, J.--I agree. Reference answered in the negative.
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1955 (12) TMI 45 - MADRAS HIGH COURT
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... ... ..... ction enacted by section 4(2) excluded the operation of section 4(3)(vii). That after all is yet another legal fiction for purposes of the Act that, though there is a receipt which may normally be income, it is not an income assessable to income-tax. We have pointed out the underlying principle of the unity of the married couple which justified the enactment of the impugned provision, section 4(2). The monies taxed as income are still the husband's monies ; only for the purposes of taxation, the legal fiction is enacted, that it is the income of the wife, with the further legal fiction, that it is income which accrued to the wife within the taxable territories. Here again we are unable to hold that section 4(2) offends article 14 of the Constitution. We have no hesitation in upholding the validity of section 4(2) of the Act. The only point raised by the petition before us having failed, we direct that the rule be discharged and that this petition be dismissed with costs.
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1955 (12) TMI 44 - CALCUTTA HIGH COURT
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... ... ..... and yet the annual payments provided for, which were a part of the consideration and which could not be regarded as rent or royalty, were nevertheless trading profits, because they could not be properly segregated from other business earnings of the company. (See British South Africa Co. v. Commissioner of Income-tax 1946 14 I.T.R. Suppl. 17; 1946 A.C. 62). I do not say that the case is on all fours with the present one, but it goes very near and furnishes valuable guidance in interpreting the transaction before us. In my opinion, the receipts which came into the hands of the assessee company under the first of the purchaser's covenants were clearly of an income character. In the result the questions referred to this Court are answered as follows Question 1 "Not pressed". Question 2 "Yes". The Commissioner of Income-tax, West Bengal, will have his costs of this reference. Certified for two counsel. SARKAR, J.--I agree. Reference answered accordingly.
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1955 (12) TMI 43 - MADRAS HIGH COURT
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... ... ..... ivision Bench of this Court. Section 47 of the Act provides for recovery of the penalty imposed. But that postulates the existence of a valid order imposing the penalty. Section 28 is a complete code in itself, regulating the procedure for the imposition of the penalties prescribed. The provisions for the assessment and levy of the tax will not as such apply. As pointed out by the learned Judges in Commissioner of Income-tax, Bihar and Orissa v. Sanichar Sah Bhim Sab 1955 27 ITR 307, there is a lacuna, but it is not for the Court to fill up. In our opinion no penalty was imposed on any of the petitioners. The order dated 18th March, 1948, did not amount in fact or in law to an imposition of a penalty under section 28 of the Act on any of the petitioners. It follows that no portion of the penalty imposed by the order dated 18th March, 1948, can be recovered from any of the petitioners as an arrear of land revenue. The rule is made absolute. The petition is allowed with costs.
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1955 (12) TMI 38 - MADRAS HIGH COURT
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... ... ..... eceipt from Naganatha in the capital account Annexure B-2. Bad accounting is not necessarily proof of concealment of the real nature of the transactions between the family and the company. A settlement of a portion of the liability of the family to the company by adjustment from what was due by the company to Naganatha cannot obviously act retrospectively and make the family a partner in the company from its very inception. The family was not a partner but a customer of the company even in the year of account. In our opinion there was no evidence on record to sustain the conclusion of the Tribunal that it was not Naganatha in his individual capacity but it was the family, of which he was the de facto manager, though a junior coparcener, that was the real partner in the company. The question referred to us is answered in the negative, and in favour of the assessee. The petitioner will be entitled to his costs. Counsel's fee ₹ 250. Reference answered in the negative.
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1955 (12) TMI 37 - PRIVY COUNCIL
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... ... ..... or income tax purposes. In the recent case of Patrick v. Broadstone Mills Lid. Singleton L.J., in words that are equally apt if applied to the Lifo method, declined to accept the base stock method as conformable to income tax law, though it might be approved by accountancy practice. In the result their Lordships are of opinion that this appeal must be allowed, the judgments of the Supreme Court and the Exchequer Court set aside and the appeal of the respondent company from the Minister's assessment rejected, and they will humbly advise Her Majesty accordingly. They repeat that they have reached this conclusion not because they dissent from any finding of fact by the President of the Exchequer Court, of whose lucid and exhaustive judgment no criticism can from this aspect fairly be made, but because his findings of fact do not offer a complete solution of the question. The respondent company must pay the costs of this appeal and of the proceedings in the courts of Canada.
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1955 (12) TMI 35 - ANDHRA PRADESH HIGH COURT
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... ... ..... earned Judges were dealing with a different point, they held that the retrospective operation of the Amending Act would not extend to the extent of reopening an assessment finally made on the basis of the then existing law by the change of law introduced by the amendment. If it was so in the case of final assessment made subsequent to the coming into force of the Amending Act, it would a fortiori be not permissible to reopen the final assessment made prior to the coming into force of the Amending Act on the basis of change in law. In the result we hold that the Income-tax Officer has no jurisdiction to reopen assessments finally made before 1st April, 1952, on the basis of the provisions of sub-section (5) inserted in section 35 by the Amending Act of 1953. We, therefore, quash the orders made by the First Additional Income-tax Officer, Nellore, dated 20th March, 1954, and 31st March, 1954. The applicant will have his costs. Advocate's fee ₹ 200. Petition allowed.
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1955 (12) TMI 2 - SUPREME COURT
Whether section 5(1) of the Act was discriminatory and violative of article 14 of the Constitution?
Held that:- The only relief which the petitioners would have been entitled to in that event would have been one in regard to the re-assessment proceedings for the year 1942-43 which were pending before the Income-tax Officer by virtue of the notice under section 34 issued by him to the petitioners on the 19th March, 1954. The petitioners are, however, entitled to succeed on the alternative contentions which were raised by them as the result of the conclusion which we have reached above in regard to the proceedings pending before the Commission having become discriminatory after the 26th January, 1950, by reason of section 5(1) of the Act having become unconstitutional after the inauguration of the Constitution on that date.
In the result, the petitioners will be entitled to the issue of a writ of certiorari quashing the report of the Income-tax Investigation Commission dated the 29th August, 1952, and the assessment orders of the Income-tax Officer for the years 1940-41, 1941-42 and 1943-44 to 194849 as being unconstitutional, null and void, and also to the issue of a writ of prohibition against the respondents from implementing the findings of the Investigation Commission referred to above with regard to the year 1942-43 and we do order that such writs do issue against the respondents accordingly. Appeal allowed.
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1955 (12) TMI 1 - SUPREME COURT
Whether there is a rational basis of classification to be found in the enactment of section 5(1) of the Act?
Whether the same class of persons were intended to be and could be dealt with under the provisions of section 47 of the Travancore Act XXIII of 1121?
Held that:- The fixation of the date for references for investigation by the Government to the Commission, viz., the 16th February, 1950, was not an attribute of the class of substantial evaders of income-tax which were intended to be specifically treated under the drastic procedure prescribed in the Travancore Act XIV of 1124 but was a mere accident and a measure of administrative convenience. The date of such references could, without touching the nature and purpose of the classification, be extended by the Travancore Legislature by a necessary amendment of the Travancore Act XIV of 1124, and if such an amendment had been grafted on the Act as originally passed, no one belonging to the particular class or category of substantial evaders of income-tax could have complained against the same.
Section 5(1) of the Travancore Act XIV of 1124 which has to be read for this purpose in juxtaposition with section 47 of the Travancore Act XXIII of 1121 cannot be held to be discriminatory and violative of the fundamental right guaranteed under article 14 of the Constitution. The proceedings which took place in the course of investigation by the Commission up to the 26th January, 1950, were valid and so also were the proceedings during the course of investigation which took place after the inauguration of the Constitution on the 26th January, 1950, under which the petitioner, as a citizen of our Sovereign Democratic Republic acquired inter alia guarantee of the fundamental right under article 14 of the Constitution. Appeal dismissed.
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1955 (11) TMI 45 - ALLAHABAD HIGH COURT
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... ... ..... are then before it on appeal, and in our judgment it has no power under this section to pass an order or give directions with reference to the proceedings of an earlier year which are concluded. If the firm was dissatisfied with the assessment order in respect of that earlier year, 1941-42, and failed to obtain relief by way of an appeal, its remedy was to ask the Tribunal to state a case under section 66 of the Act. A writ of mandamus cannot in our opinion be issued by this Court to enforce the order of the Tribunal passed without jurisdiction during the hearing of the appeal relating to the assessment year 1942-43 in respect of assessment for the year 1941-42. In our opinion the petitioner has failed to establish a legal right to the relief which he seeks and this petition fails. It is accordingly dismissed with costs. December 2, 1955. This matter was placed in the list for a mention today at the request of the learned counsel for the Department on the question of costs.
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1955 (11) TMI 44 - THE CHANCERY DIVISION
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... ... ..... to exact from the purchasers of the shares by reason of the fact that the appellants' concurrence in the scheme was essential to its success in that 70,000 shares were not available without it. Apart from the holding of the shares, the secretaryship was worth little or nothing. It was only the appellants' special position that enabled them to obtain this money. It was in fact a sum earned in the course of the company's trade, namely, the sale of shares, and, even though not part of the purchase price, was only earned because of the holding of the shares and by way of inducement to part with them. On this analysis, as it seems to me, this was money earned by the company in the course of its trade and therefore a trading receipt and must be charged to tax accordingly. I am therefore of opinion that the commissioners came to a right conclusion and that this appeal should be dismissed. Appeal dismissed. Solicitors Coward, Chance & Co.; Solicitor of Inland Revenue
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1955 (11) TMI 43 - NAGPUR HIGH COURT
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... ... ..... ion. This in itself is sufficient to sustain the assessment made by the Income-tax Officer under sub-section (4) of section 23 of the Act. It is therefore, not necessary to consider the contention raised as to the validity of the notice issued under sub-section (4) of section 22. 21. It is urged on behalf of the assessee that the question of validity of the notice is a question of law and therefore the Tribunal should be called upon to state the case. Even assuming that any question of law does arise, it is not incumbent upon this Court to require the Tribunal to state the case when the answer is evident and there has been error on the part of the Tribunal in rejecting the application. We have taken a similar view Sagarmal Spinning and Weaving Mills v. Commissioner of Income-tax M.P. and Bhopal Miscellaneous Civil Case No. 89 of 1954 decided on 10th October, 1955. 22. In the result, this application is dismissed with costs Counsel's fee ₹ 75. Application dismissed.
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1955 (11) TMI 40 - ALLAHABAD HIGH COURT
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... ... ..... made by the petitioner in Pakistan under section 18A of the Income-tax Act. On the other hand, they always proceeded on the assumption that such payments had been made, but they thought that they were not liable to make any refund. Still I do not consider it safe to decide myself what excess payments had actually been made and I propose to leave it to the Income-tax authorities to decide that matter and to grant a set-off of the amount they find to have been paid in excess, under section 18A of the Act. For the reasons given above, this petition is allowed and a writ of mandamus shall issue to the respondent commanding the respondent to determine what excess payments had been made by the petitioner under section 18A of the Income-tax Act in Lahore in respect of the years 1946-47 and 1947-48, and to allow a set-off of those amounts in the assessments of the subsequent years, 1948-49 and 1949-50. The petitioner will be entitled to his costs of this petition. Petition allowed.
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1955 (11) TMI 39 - FEDERAL COURT
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... ... ..... section 9 of the Civil Procedure Code does not bar the suit. o p /o p As regards the objection that the suit is barred by time, all that is necessary to say is that the assessment being void and the tax not having been paid no question of limitation arises. Obviously, the dispute has not been concluded because while the Federation insists on its right to tax, the Province denies any such power in the Federation, and one of the reliefs claimed in the suit, paragraph (b) of the relief clause, seeks a declaration that the plaintiff is not liable to be taxed under the Income-tax Act of 1922 or Excess Profits Tax Act of 1940 in respect of its future income. o p /o p For these reasons we decree the suit and declare that the Government of West Pakistan is not liable to income-tax or excess profits tax in respect of the profits earned by the Province of the Punjab from the Jollo Rosin and Turpentine Factory. Both Governments must bear their own costs. o p /o p Suit decreed. o p /o p
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1955 (11) TMI 38 - HOUSE OF LORDS
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... ... ..... one taxpayer and another, for it eliminates variations which are due to no other cause than any one taxpayer's decision as to what proportion of his total product he will supply to himself. A formula which achieves this makes for a more equitable distribution of the burden of tax, and is to be preferred on that account. Secondly, it seems to me better economics to credit the trading owner with the current realizable value of any stock which he has chosen to dispose of without commercial disposal that to credit him with an amount equivalent to the accumulated expenses in respect of that stock. In that sense, the trader's choice is itself the receipt, in that he appropriates value to himself or his donee direct instead of adopting the alternative method of a commercial sale and subsequent appropriation of the proceeds. Lord Tucker. My Lords, I would allow this appeal for the reasons which have been stated by my noble and learned friend, Lord Radcliffe. Appeal allowed.
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1955 (11) TMI 37 - ALLAHABAD HIGH COURT
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... ... ..... . As has been pointed out in the counter-affidavit, the Raja was asked to pay up the amount but he said that only ₹ 5,000 was due and that amount also could have been realised by the assessee if he signed a voucher jointly. If the contention of the applicant be accepted that a sum of ₹ 5,000 deposited in Court was due to the assessee from the Raja of Tirwa, still if the amount was lying in Court, it belonged to the Raja Sahib and if it had been made available to the assessee towards the liquidation of his debt, the assessee should have signed the voucher so as to make the amount available to the Income-tax authorities to be realised and set off towards the income- tax liability of the petitioner. It cannot therefore be said that the authorities did not take proper and sufficient steps to realise the amount due to the assessee from the Raja of Tirwa. There is, therefore, no force in this petition and it is rejected. I make no order as to costs. Petition dismissed.
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1955 (10) TMI 43 - PUNJAB & HARYANA HIGH COURT
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... ... ..... lar case there was no material on which the Income-tax Officer could come to the conclusion. I am unable to accept this contention either because the order of the Income-tax Officer or of the Assistant Commissioner which was accepted by the Appellate Tribunal referred to and quoted above show what material there was from which they were coming to the conclusion as to what was wholly and exclusively for the purposes of the business of the assessee. It cannot be said that there was no material before the Taxing Officers. As a matter of fact, in Commissioner of Income-tax, West Bengal v. Calcutta Agency Limited 1951 19 ITR 191 , the Supreme Court has held that the burden of proving the necessary facts in order to entitle the assessee to claim exemption under section 10(2)(xv) is on the assessee, and if he does not establish these facts he is not entitled to the deduction claimed. I would, therefore, dismiss this petition and discharge the rule with costs. Bhandari, C.J.-I agree.
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1955 (10) TMI 42 - TRAVANCORE-COCHIN HIGH COURT
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... ... ..... d to liability to pay tax on "excess dividends" within the meaning of the proviso to the Finance Act, a matter which the learned Officer was himself unable to judge at the first blush even after full scrutiny of all the records. It seems to us that the excess taxation by scrutiny of all the resorted to at the second stage in the rectification proceedings was a total abuse of process and not justifiable to any the least extent. 14. We are clear that the proceedings for rectification taken by the first respondent Income-tax Officer and filed in the case Exhibits B and C are lacking in jurisdiction and cannot stand. The orders in revision passed by the second respondent filed in the case as Exhibits F and G confirming the rectification orders as above are also unsustainable. We therefore grant a writ of certiorari quashing the above-said proceedings as prayed for. The petitioner will get his costs from the respondents; advocate's fee ₹ 150. Petition allowed.
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