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Income Tax - Case Laws
Showing 81 to 100 of 142 Records
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1997 (9) TMI 63
Firm, Registration, Genuine ... ... ... ... ..... ccount, could be gathered and thus there was no violation of the terms and conditions of the partnership deed. Registration thus could not be refused for that reason. The Revenue has not raised any dispute with regard to the consent of other partners. This being so, the factual finding recorded by the Appellate Tribunal that Sri N. P. Bhatia took up the M. E. S. contract with the consent of the other partners, could not be successfully assailed. The matter can be looked at from another angle also. Minus the profits from the M. E. S. contract the firm has been assessed by the Assessing Officer in respect of profits from other contracts and, therefore, it is difficult to say that the firm did not exist or did not carry on the business as per the partnership deed. Nothing is pointed out by the Revenue to us to doubt the genuineness of the assessee-firm. We, therefore, answer the aforementioned question in the affirmative, i.e., in favour of the assessee and against the Revenue.
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1997 (9) TMI 62
Salary, Spouse, Standard Deduction, Total Income ... ... ... ... ..... deduction is to be included in the income of the assessee under section 64(1)(ii) or the gross income. Exactly the same controversy came up before the Karnataka High Court in CIT v. S. K. Nayak 1984 145 ITR 791. There, the Karnataka High Court held as follows It seems to us that this question should not detain us longer. If the wife herself had been the assessee, there would not have been any doubt as to her right to compute her net income. She is entitled to the standard deduction and other expenses. If that is so, we fail to see any good reason why gross income should be clubbed with the income of her husband under section 64. It would be contrary to the scheme of the Act itself not to allow deductions before clubbing the income. We are in agreement with the view taken by the Karnataka High Court. Following the aforesaid decision of the Karnataka High Court, we answer the aforementioned question in the affirmative, that is, in favour of the assessee and against the Revenue.
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1997 (9) TMI 61
Rectification, Fact ... ... ... ... ..... ng the record came to the conclusion that there was no error apparent so as to call for rectification and accordingly set aside the order of the Assessing Officer passed under section 154 of the Act. Against that order, the Revenue went in appeal before the Tribunal and the Tribunal affirmed the order passed by the Commissioner of Income-tax (Appeals). Hence, the aforesaid question has been referred by the Tribunal at the instance of the Revenue for answer by this court. We are satisfied that the order passed by the Commissioner of Income-tax (Appeals) as also the order passed by the Tribunal are justified as the Commissioner of Income-tax (Appeals) has specifically found that there was no occasion for rectification which view has been affirmed by the Tribunal. These are thus all questions of fact only and no question of law arises. In our opinion, the view taken by the Tribunal is justified and hence we answer this question in favour of the assessee and against the Revenue.
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1997 (9) TMI 60
Interest, Delay, Return ... ... ... ... ..... ision has already been upheld by three High Courts in the cases of Sant Lal v. Union of India 1996 222 ITR 375 (P and H), Ranchi Club Limited v. CIT 1996 217 ITR 72 (Patna) and Union Home Products Ltd. v. Union of India 1995 215 ITR 758 (Kar). We need not burden this judgment with the detailed reference to all these cases. Suffice it to say that this provision is compensatory in nature and it is not arbitrary or violative of articles 14 and 19(1)(g) of the Constitution of India,---it being only a regulatory measure with a view to keep the parties in discipline and that they file returns of income in time. It cannot be said to adversely affect the parties nor their profession. We are therefore of the opinion that section 234A of the Act of 1961 is not violative of article 14 or 19(1)(g) of the Constitution of India. As a result, the writ petition being without any merit is dismissed. There shall be no order as to costs. Security amount, if any, be refunded to the petitioners.
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1997 (9) TMI 59
Guest House, Business Expenditure ... ... ... ... ..... ncome-tax (Appeals), and thereafter, in second appeal, the Tribunal also confirmed the disallowance. The assessee aggrieved by the order of the Tribunal, approached the Tribunal for making reference before this court and, accordingly, the Tribunal referred the aforesaid question of law for opinion of this court. Without going into the merits of the case, suffice it to say that a complete answer is provided under section 37(4) of the Act which says that after the February 28, 1970, expenses on the maintenance of any residential accommodation in the nature of a guest house will not be allowable. Sub-section (4) of section 37 of the Act starts with a non-obstante clause contained in sub-section (1) or sub-section (3). Therefore, it is clear that no expenditure made on the maintenance of a guest-house is allowable. Hence, in this view of the matter, the view taken by the Tribunal is justified and we answer the aforesaid question in favour of the Revenue and against the assessee.
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1997 (9) TMI 58
Court, Accrual, Time Of Accrual Of Income, Rate Of Interest, Extra Interest ... ... ... ... ..... x Officer took the view in subsequent proceedings that the amount of interest representing the difference of 2 per cent. (5 per cent. minus 3 per cent.) should be deemed to have accrued in the accounting year relevant to the assessment year 1973-74, overruling the contention of the assessee that the amount should be spread over in the respective years. This view was confirmed by the first appellate authority and the Tribunal in second appeal. Hence, the assessee approached the Tribunal for referring the aforesaid question before this court and, accordingly, the aforesaid question of law has been referred by the Tribunal for the opinion of this court. We have heard learned counsel for the Revenue and perused the records. We are of the opinion that the view taken by the Tribunal appears to be justified and there is no reason to take a different view from the view taken by the Tribunal. Hence, the aforesaid question is answered in favour of the Revenue and against the assessee.
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1997 (9) TMI 57
Company, Depreciation ... ... ... ... ..... should have worked out the profit and loss account in terms of Parts II and III of Schedule VI to the Companies Act. The assessee has done it in part but for the earlier part applied the provisions of the Act of 1961 which is not correct. In this view of the matter, we are of the opinion that the view taken by the Tribunal does not appear to be justified. The Tribunal has not given any reason except that it has made a reference to the decision of the Income-tax Appellate Tribunal, Bombay. What was the reason given by the Bombay Tribunal has not been discussed in the order of the Tribunal. However, as we pointed out earlier that the provisions of the Companies Act stand incorporated by virtue of sub-section (1A) to section 115J, the assessee should have prepared the balance-sheet of profit and loss in terms of the Companies Act. Hence, the view taken by the Tribunal is not correct. Accordingly, we answer these questions of law in favour of the Revenue and against the assessee.
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1997 (9) TMI 56
Investment Allowance, Industrial Undertaking ... ... ... ... ..... lant. Shri Tankha, learned counsel for the petitioner, has submitted that so far as the construction work is concerned, this will not come in the scope of industrial undertaking because of the decision given by their Lordships of the Supreme Court in the case of CIT v. N. C. Budharaja and Co. 1993 204 ITR 412. Therefore, the order of the Tribunal to this extent is not correct. The contention of Shri Tankha is justified, as their Lordships of the Supreme Court in the aforesaid case have already taken the view that civil construction does not involve any manufacturing activity. Therefore, it is not an industrial undertaking and to that extent, the order of the Tribunal is not justified. Hence, in the light of the aforesaid decision of the Supreme Court, we answer this reference in favour of the Revenue. So far as the other part of the question is concerned, it is for the Tribunal to consider whether it is manufacturing activity or not. The reference is accordingly disposed of.
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1997 (9) TMI 55
Liquor, Registration ... ... ... ... ..... ich actually arises for consideration is whether registration can be refused to a partnership firm under section 185(1) of the Income-tax Act, 1961, on the ground that the person or persons holding licence to run a business in liquor had constituted such firm by adding more persons as partners without permission from the competent authority under the Punjab Excise Act and the rules framed thereunder. A similar question was examined by this court in CIT v. Jagdish Chand Walia and Co. 1998 234 ITR 595 (P and H) (I. T. R. No. 93 of 1984) decided on September 29, 1997, and it has been held that a partnership firm constituted by a licensee together with non-licensee partners to run a liquor business cannot be treated to be a genuine firm under section 185(1) of the Act inasmuch as there was a breach of rule 7 of the Punjab Liquor Licence Rules, 1956. Following the aforesaid view, the question is answered in the negative, i.e., in favour of the Department and against the assessee.
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1997 (9) TMI 54
Registration, Liqour ... ... ... ... ..... n the plea inasmuch as the Commissioner has in his order under section 263, clearly observed in para. 1 as under Since these facts indicated that the Income-tax Officer had granted registration to the firm without proper application of mind and against the provisions of law, a notice under section 263 was issued to the assessee on the basis that the order under section 185(1)(a) was erroneous in so far as it was prejudicial to the interests of the Revenue. Since the Commissioner has already held that the order was erroneous in so far as it was prejudicial to the interests of the Revenue, the challenge has no substance and is rejected. In the result, it is held that the order of the Commissioner, refusing registration to the firm on the ground that the firm was not a genuine one because a non-licensee was allowed to become a partner in the firm, is not assailable. The question is, therefore, answered in the negative, i.e., in favour of the Department and against the assessee.
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1997 (9) TMI 53
Recovery, Interest, Waiver ... ... ... ... ..... e writ petitioner for waiver of interest. What the first respondent has stated in the order is that the conditions as laid down in section 220(2A) are not satisfied in the instant case and not that cases coming under the Voluntary Disclosure Scheme are outside the purview of section 220(2A) for waiver of interest. In these circumstances, the writ petitioner is entitled to succeed, and the writ petition is allowed. The order of the first respondent dated March 25, 1987 in F. No. 404/279 of 1985-ITCC is quashed. In view of the fact that the powers under section 220(2A) are now exercised by the second respondent and not by the first respondent, the matter is remanded to the second respondent for consideration of the claim of the writ petitioner for waiver of interest in the light of the observations contained in this order. However, there will be no order as to costs. In view of the order passed in the main writ petition, the stay petition W. M. P. No. 6230 of 1988 is dismissed.
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1997 (9) TMI 52
Let Out, Property, Business, Revision ... ... ... ... ..... s recorded that it is an income not arising out of the business then further inquiry by the Assessing Officer would have been influenced by that observation. The Commissioner of Income-tax has only observed that no proper enquiry has been made and let an enquiry be made by the Assessing Officer after hearing the parties. This is the correct approach of the Commissioner of Income-tax and we are of the opinion that the view taken by the Tribunal in the present situation does not appear to be justified. Learned counsel for the Revenue has invited our attention to the decision of this court dated February 15, 1996, passed in M. C. C. No. 29 of 1990 (CIT v. Gulabrai and Sons). Since the matter is being remanded back to the Assessing Officer to make enquiry, therefore, we need not express any opinion. For the reasons stated above, the view taken by the Tribunal does not appear to be correct. Hence, we answer the aforesaid question in favour of the Revenue and against the assessee.
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1997 (9) TMI 51
Remuneration, Directors, Guarantee Commission ... ... ... ... ..... hat it is itself an inference from other basic facts will not alter its character as one of fact. The High Court is not bound to answer the question if it be a question of fact and/or if the question be not arising out of the order of the Tribunal merely because the High Court had called upon the Tribunal to state a case on that question (see CIT v. Anusuya Devi (Smt.) 1968 68 ITR 750 (SC)). For the foregoing reasons, both the references are refused to be answered. No order as to the costs. Though we have dismissed the applications, we would like to clarify by way of abundant caution that we may not be taken to mean that condemnation of the practice of the banks asking personal guarantee in the case of public limited companies holding large assets can itself be a ground for disallowance of commission paid to directors. The Assessing Officer has to take an overall view of the facts of each case. One copy each of this order shall be placed on the records of the two references.
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1997 (9) TMI 50
Investment Allowance, New Machinery, Cold Storage ... ... ... ... ..... different context and under a different provision of the Act. However, the view taken by the Division Bench in that case that cold storage was engaged in manufacturing process runs counter to the view taken by the Supreme Court in Delhi Cold Storage (P.) Ltd. s case 1991 191 ITR 656 and, to that extent, it also did not lay down a good law. The decision of this court in Partap Steel Rolling Mills case 1989 179 ITR 554 is, however, distinguishable as the oxygen plant installed by the assessee in that case for producing oxygen used in the manufacturing process of iron and steel qualified as a plant for the purposes of business of manufacturing and production. That decision would not, therefore, stand overruled in the light of the view taken by the Supreme Court in Delhi Cold Storage (P.) Ltd. s case 1991 191 ITR 656. In the result, the question, referred to this court, is answered in the negative, i.e., in favour of the Department and against the assessee. No order as to costs.
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1997 (9) TMI 49
Interest On Refund, Advance Tax ... ... ... ... ..... he variation in the quantum of the excess payment of tax brought about by orders passed subsequent to the regular assessment as mentioned in sub-section (1A). We are concerned with the second conclusion arrived at by their Lordships. As per this conclusion, the assessee would be entitled to interest under section 244(1A) of the Act on the sum of Rs. 65,281 as well as has been held by the Tribunal but the interest has to be paid from August 30, 1976, when the original assessment was framed under this sub-section. Further, in view of the second proviso to section 244(1A) of the Act, the assessee would not be entitled to interest for a period of one month from the date of the passing of the order in appeal. Following the law laid down by their Lordships of the Supreme Court in Modi Industries case 1995 216 ITR 759, the question referred to us is answered in the affirmative, i.e., in favour of the assessee and against the Revenue with the modifications indicated above. No costs.
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1997 (9) TMI 48
Compulsory Acquisition, Capital Gains, Solatium ... ... ... ... ..... f acquisition or the cost of any improvement has to be worked out under sub-clause (ii) of clause (a) of sub-section (1) of section 48 of the Act. The assessee has not challenged the cost of acquisition of land and, therefore, the controversy is only confined to the value of solatium as on the date on which the cost of acquisition of the land is to be worked out. Section 48 of the Act does not permit any deduction on account of any assumed value of solatium as on January 1, 1954, or January 1, 1964. As has been seen, solatium is awarded on the basis of the market value of the land. Therefore, there is no question of determining the value of solatium as on the date on which the cost of acquisition of the land is to be determined. In the result, the second question in both the assessment years (1977-78 and 1978-79) is answered in the negative and to the effect that the assessee is not entitled to any deduction of the value of solatium as on January 1, 1954, or January 1, 1964.
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1997 (9) TMI 47
Capital Gains, Agricultural Land, Municipal Limits ... ... ... ... ..... nto cash. The resultant income is not agricultural income. The Explanation inserted in section 2(1A) by the Finance Act, 1989, with effect from April 1, 1970, makes the position clear when it declares that revenue derived from land shall not include and shall be deemed never to have included any income arising from the transfer of any land referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of section 2. The Explanation completely renders ineffective the ratio of the decision in Manubhai A. Sheth v. N. D. Nirgudkar 1981 128 ITR 87 (Bom). Following the view taken by this court in Tuhi Ram s case 1993 199 ITR 490, it is held that the Tribunal was not right in law in holding that the capital gains arising on the transfer of agricultural land situated within the municipal limits was not chargeable to income-tax in the assessee s hands and the question referred to us is answered in the negative, i.e., in favour of the Revenue and against the assessee. No costs.
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1997 (9) TMI 46
Estate Duty, Rate Of Duty ... ... ... ... ..... Court in Madan Mohan s case , Madhya Pradesh High Court in Smt. Gunvantibai s case , R.S. Gwalre s case and Shyamsukh Garg s case , Patna High Court in P.K. Agarwalla s case and Krishna Mohan Prasad Sah s case , Rajasthan High Court in Smt. Nirmala Saxena s case and S.S. Mehta s case and Gujarat High Court in Gunvantlal Keshavlal s case . We adopt the reasoning given by these Courts and especially the view expressed by G.P. Singh, C.J. as he then was in R.S. Gwalre s case , reproduced in extenso. For the reasons stated above, we answer the question referred to us in the affirmative, i.e., in favour of the Revenue and against the assessee. It is held that the Tribunal has erred in holding that the valuation in respect of a residential house which was exempt from duty under s. 34(1)(c) of the Act could not be brought in the estate of the deceased HUF for aggregation purposes, which had been added for determining the rate of estate duty payable on the taxable estate. No costs.
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1997 (9) TMI 45
Capital Gains, Agricultural Land ... ... ... ... ..... e resultant income is not agricultural income. The Explanation inserted in section 2(1A) by the Finance Act, 1989, with effect from April 1, 1970, makes the position clear when it declares that revenue derived from land shall not include and shall be deemed never to have included any income arising from the transfer of any land referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of section 2. The Explanation completely renders ineffective the ratio of the decision in Manubhai A. Sheth v. N. D. Nirgudkar, Second ITO 1981 128 ITR 87 (Bom). Following the view taken by this court in Tuhi Ram s case 1993 199 ITR 490, it is held that the Tribunal was not right in law in holding that the capital gains arising on the transfer of agricultural land situated within the municipal limits was not chargeable to income-tax in the assessee s hands and the question referred to us is answered in the negative, i.e., in favour of the Revenue and against the assessee. No costs.
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1997 (9) TMI 44
Charitable Trust, Law Applicable ... ... ... ... ..... d themselves in levying tax in respect of the agricultural income of the assessee-Devasthanam, the impugned orders of the authorities below deserve to be set aside and a fresh look has to be taken of the matter at the level of the Assessing Officer, that is to say, the Agricultural Income-tax Officer, Chengalpattu. In fine, T. C. Nos. 579 and 580 of 1985 are allowed. The impugned orders of the authorities below are set aside and the matters are remitted back to the Assessing Officer---the Agricultural Income-tax Officer, Chengalpattu, for consideration afresh in the light of what we have observed in this common order. W. P. No. 7238 of 1985 is also allowed and the order of the Assessing Officer in question is quashed and the matter is also remitted back to the Assessing Officer---the Agricultural Income-tax Officer, Chengalpattu, for consideration afresh, in the light of what we have observed in this common order. Consequently, both TCMPs and WMP are also dismissed. No costs.
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