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Income Tax - Case Laws
Showing 121 to 140 of 1350 Records
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1997 (12) TMI 15
Whether, on the facts and in the circumstances of the case and in law, the cost of uninstalled machinery of ₹ 14,71,833 is to be taken into account in the computation of the capital for computing the relief under section 80J - High Court answered the question in favour of the assessee relying on the decision in the case of CIT v Cibatul Ltd. This judgment has been approved by Apex Court in the case of CIT v Alcock Ashdown and Co. Ltd. - hence revenue appeal is dismissed
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1997 (12) TMI 14
Collaboration Agreement - Computation Of Capital - Whether the Tribunal erred in holding that the amount of tax recoverable as on the first day of the computation period was not to be included in the capital employed in the assessee's industrial undertaking as till the assessment was completed, the said amount did not constitute a debt due to the assessee -held, yes - High Court was in error in holding that refund became due to the assessee only after the assessment was made and not before that
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1997 (12) TMI 13
Whether, on the facts and in the circumstances of the case, income of the assessee received from the managing contractor was income from business - Tribunal came to the conclusion that the assessee was carrying on its business through its agent, the managing contractor - that finding of fact was not challenged - Full Bench entirely overlooked the findings of fact made by the Tribunal in coming to its decision in this case - hence it was erroneous - appeal of assessee is allowed
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1997 (12) TMI 12
Reopening of the assessment u/s 147(a) on basis of information regarding undervaluation of inventories, obtained in the subsequent year's assessment - held that the court cannot strike down the reopening of the case in the facts of this case - sufficiency or correctness of the material is not a thing to be considered at this stage - It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous
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1997 (12) TMI 11
Whether the Tribunal was right in holding that the amount of ₹ 2,50,000 could not be said to have been applied for charitable or religious purposes in India within the meaning of s. 11(1) - whether the assessee was entitled to any further exemption from tax of any portion of its income for the asst. yr. 1965-66 - finding of fact is that the amount was not actually applied for charitable or religious purposes - no reason to interfere with this order of the High Court
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1997 (12) TMI 10
The Supreme Court dismissed the appeal regarding the writing off of bad debts, stating that the determination of bad debt is a question of fact, not law. No costs were awarded. (Case citation: 1997 (12) TMI 10 - SC)
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1997 (12) TMI 9
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the salary of the assessee was not paid by FACT but by the foreign company, Davy Powergas Inc. - This is a pure question of fact. The finding of the Tribunal has not been challenged on the ground of perversity. The finding will have to be taken as correct. Therefore, the answer to this question must be in the affirmative and in favour of the assessee.
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1997 (12) TMI 8
Whether, the pontoons and tugs are covered by the expression 'ship' and therefore, are entitled to development rebate at a higher rate of 40 per cent instead of 25 per cent on the basis of plant - Having regard to the width of the meaning given to the word "ships" in the depreciation table, it is clear that a flat-bottomed boat used as ferry -boat will clearly come within the description "vessel ordinarily operating on inland waters" - revenue appeal is dismissed
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1997 (12) TMI 7
Whether the assessee was liable to be assessed in the status of Hindu undivided family - properties held by the assessee came from a lady relative in gift - since the source of the property was a gift it could not be treated as a joint family property
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1997 (12) TMI 6
The Supreme Court ordered that the appeals regarding the constitutional validity of section 171(9) of the Income-tax Act be placed before the Constitution Bench. The Madras High Court and Karnataka High Court had both struck down the provisions of section 171(9) as violative of article 14 of the Constitution.
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1997 (12) TMI 5
Repayment of loan - fluctuation in the rate of foreign exchange resulted in repay a much lesser amount - manner or mode of repayment of the loan has nothing to do with the cost of an asset acquired by the assessee for the purpose of his business. We hold that the questions were rightly answered by the High Court. The appeals of revenue are dismissed
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1997 (12) TMI 4
Nature and scope of the power conferred upon the Commissioner under section 263 - Interpretation of the term "record" under section 263(1) of the Income-tax Act, 1961 - Notice issued by CIT under section 263(1) - Determination of the valuation report - HELD THAT:- The Calcutta High Court in the case of CIT v. S. M. Oil Extraction Pvt. Ltd. [1990 (10) TMI 33 - CALCUTTA HIGH COURT] held that
"the record contemplated in section 263(1) does not mean only the order of assessment but it comprises all proceedings on which the assessment is based. The Commissioner is entitled, for the purpose of exercising his revisional jurisdiction, to look into the whole evidence. The expression 'record' as used in section 263 of the Act is comprehensive enough to include the whole record of evidence on which the original assessment order was based. The valuation proceeding is a part of the assessment proceeding. But once the valuation report was received by the Income-tax Officer, although subsequent to the completion of the assessment, it forms part of the records of the assessment year in question."
It further held that
"where any proceeding is initiated in the course of the assessment proceeding having a relevant and material bearing on the assessment to be made and the result of such proceeding was not available with the Income-tax Officer before the completion of the assessment, but the result came subsequently, the revising authority is entitled to look into such material as it forms part of the assessment records of the particular assessment year".
The Calcutta High Court took this view without referring to the definition of the word "record" contained in the Explanation to section 263(1) of the Act.
It, therefore, cannot be said, as contended by learned counsel for the respondent, that the correct and settled legal position, with respect to the meaning of the word "record" till June 1, 1988, was that it meant the record which was available to the Income-tax Officer at the time of passing of the assessment order. Further, we do not think that such a narrow interpretation of the word "record" was justified, in view of the object of the provision and the nature and scope of the power conferred upon the Commissioner. The revisional power conferred on the Commissioner under section 263 is of wide amplitude. It enables the Commissioner to call for and examine the record of any proceeding under the Act. It empowers the Commissioner to make or cause to be made such enquiry as he deems necessary in order to find out if any order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue.
After examining the record and after making or causing to be made an enquiry if he considers the order to be erroneous then he can pass the order thereon as the circumstances of the case justify. Obviously, as a result of the enquiry he may come into possession of new material and he would be entitled to take that new material into account. If the material, which was not available to the Income-tax Officer when he made the assessment could thus be taken into consideration by the Commissioner after holding an enquiry, there is no reason why the material which had already come on record though subsequently to the making of the assessment cannot be taken into consideration by him. Moreover, in view of the clear words used in clause (b) of the Explanation to section 263(1), it has to he held that while calling for and examining the record of any proceeding under section 263(1) it is and it was open to the Commissioner not only to consider the record of that proceeding but also the record relating to that proceeding available to him at the time of examination.
We, therefore, hold that it was open to the Commissioner to take into consideration all the records available at the time of examination by him and thus to consider the valuation report submitted by the Department valuation cell subsequent to the passing of the assessment order and, so the order passed by him was legal. The High Court was wrong in taking a contrary view. We, therefore, allow this appeal, set aside the judgment and order passed by the High Court and answer the question referred to the High Court in the negative, i.e., in favour of the Revenue and against the assessee. Thus, there shall be no order as to costs.
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1997 (12) TMI 3
Issues Involved:
1. Whether the sum of Rs. 2,95,000 is to be taken into account in computing the income of the assessee from business under section 28 of the Income-tax Act, 1961.
2. Whether the claim of Rs. 2,95,000 is covered by sub-rule (j) of rule 6DD, framed under section 40A(3) of the Income-tax Act, 1961.
3. Whether the sum of Rs. 19,659 incurred as guest expenses is allowable as a deduction.
Issue-wise Detailed Analysis:
1. Computation of Income under Section 28:
The Tribunal referred the question of whether Rs. 2,95,000 should be included in the assessee's business income under section 28 of the Income-tax Act, 1961. The assessee claimed this amount as business expenditure/loss, arguing that it was necessary to dispose of sub-standard tobacco stock at a discount, which involved remitting 20% of the sale price back to a Singapore party through an intermediary, Shamsuddin. The Income-tax Officer disallowed this claim, deeming the payment non-genuine and in contravention of section 40A(3) of FERA. The Tribunal, however, found that the amount should reduce the assessee's income from the export transaction, effectively recognizing the transaction's reality but not its legality.
2. Applicability of Rule 6DD(j) under Section 40A(3):
The Tribunal also considered whether the payment to Shamsuddin fell under the exceptions of rule 6DD(j), which allows cash payments in exceptional and unavoidable circumstances. The Tribunal concluded that the payment did not attract section 40A(3) because it was made under exceptional and unavoidable circumstances. However, the High Court disagreed, asserting that expenses tainted with illegality could not be allowed as business expenditure under section 37 or as business loss. The High Court emphasized that the transaction was illegal and not a normal incidence of carrying on business.
3. Deduction of Guest Expenses:
The issue of whether Rs. 19,659 incurred as guest expenses is allowable as a deduction was also raised. However, the judgment primarily focused on the legality of the Rs. 2,95,000 payment and did not provide a detailed analysis of the guest expenses claim.
High Court's Findings:
The High Court held that the Tribunal erred in its conclusions, stating that payments tainted with illegality could not be claimed as deductions. The High Court emphasized that the agreement to remit 20% of the sale price back to the Singapore party was illegal and could not be recognized by the court. The High Court further stated that the real income from the export transaction was the full invoice price, not the amount minus the illegal payment. The High Court cited various precedents, including English and Indian cases, to support its view that penalties or fines for legal infractions cannot be deducted as business expenses.
Supreme Court's Conclusion:
The Supreme Court agreed with the High Court's view, dismissing the appeal and holding that the expenditure incurred for evading the provisions of FERA and the penalty levied for such evasion could not be allowed as deductions. The Court emphasized that allowing such deductions would undermine the penal provisions of FERA and be against public policy. The appeal was dismissed with no order as to costs.
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1997 (12) TMI 2
Rashiklal is a partner of the firm, Rashiklal and Company - Whether commission paid by the assessee-firm to Sri Rashiklal P. Rathor (individual) is allowable u/s 40(b) - provisions relating to assessment of firms should not be construed in a way to defeat its object. Section 40(b) forbids deduction of any amount paid by way of commission to a partner - the commission received by him from the partnership firm cannot be allowed as a deduction from the business income of the partnership
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1997 (12) TMI 1
There is no dispute that the assessee had withdrawn various sums of money, when she did not have any credit balance with the company. In order to pay her these sums of money the account of Mahesh was not debited at all. The entire credit balance of Mahesh stood as it was till the very last day of the accounting year - withdrawals made by the assessee from Universal Radiators Private Limited totaling Rs. 93,027 should be assessed in the hands of the assessee u/s 2(22)(e)
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1997 (11) TMI 552
The High Court ruled in favor of the assessee, allowing exemption for their shares in the partnership firm's property under section 5(1)(iv) of the Wealth Tax Act, 1957. The court held that partners have a specific interest in the firm's assets and are entitled to the exemption. The decision was supported by previous case law.
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1997 (11) TMI 551
The High Court ruled in favor of the assessee, allowing exemption for his share in the property of the partnership firm under section 5(1)(iv) of the Wealth Tax Act. The Court held that since a firm has no legal existence, the property of the firm belongs to its partners, entitling the assessee to claim the exemption. The decision was based on previous rulings and principles of English jurisprudence.
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1997 (11) TMI 550
The High Court ruled in favor of the assessee, allowing exemption for his share in the property of the partnership firm under section 5(1)(iv) of the Wealth Tax Act. The court held that partners have a specific interest in the firm's assets and are entitled to the exemption. The decision was supported by previous case law.
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1997 (11) TMI 549
The High Court ruled in favor of the assessee, holding that he was entitled to exemption under section 5(1)(iv) for his share in the property of the partnership firm. The court emphasized that a partner has a specific interest in the assets of the firm and that the property of the firm is essentially the property of its partners. The decision was supported by precedents and the Wealth Tax Rules.
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1997 (11) TMI 546
Issues Involved:
1. Legality of the High Court's order dated September 10, 1996.
2. Scope of supervisory jurisdiction under Article 227 of the Constitution of India and inherent jurisdiction under Section 482 of the Criminal Procedure Code (Cr.P.C.).
3. Requirement of sanction under Section 197 Cr.P.C. for initiating criminal proceedings against government officials.
4. Whether the acts committed by the respondents were in the discharge of official duties.
5. Admissibility of evidence and documents at the stage of considering the requirement of sanction.
Detailed Analysis:
1. Legality of the High Court's Order:
The appellant contended that the High Court's order dated September 10, 1996, resulted in manifest injustice and was patently illegal, improper, and unjustified. The High Court had allowed the writ petitions filed by respondents Nos. 1 to 3 and dismissed the Criminal Revision Application filed by the appellant. The appellant argued that the High Court improperly exercised its revisional jurisdiction under Article 226 and 227 of the Constitution and Section 482 Cr.P.C.
2. Scope of Supervisory Jurisdiction:
The appellant argued that the High Court, in exercising its supervisory jurisdiction under Article 227 and inherent jurisdiction under Section 482 Cr.P.C., should not have engaged in a full-fledged appreciation of evidence like a regular appellate court. The trial court had issued processes against respondents Nos. 1 to 3 based on prima facie evidence of cognizable offenses. The High Court's interference was deemed improper as the trial court had exercised its discretion judicially.
3. Requirement of Sanction under Section 197 Cr.P.C.:
The appellant contended that sanction under Section 197 Cr.P.C. is not required unless the complaint on its face discloses official action. The acts alleged against the respondents did not prima facie appear to be in the purported exercise of official duties, and thus, no sanction was warranted at the initial stage. The appellant cited several Supreme Court decisions to support this contention, including Nagaraj Vs. State of Mysore and Chandra Deo Singh Vs. Prakash Chandra Bose.
4. Acts Committed in Discharge of Official Duties:
The respondents argued that their actions were in the discharge of official duties and thus required sanction under Section 197 Cr.P.C. The learned Attorney General submitted that the respondents acted to prevent a law and order situation, which justified their actions. The statements of witnesses indicated that the respondents had taken charge of the situation to prevent further trouble. The Supreme Court agreed that the alleged acts were purported to be in the exercise of official duties, making a case for sanction under Section 197 Cr.P.C.
5. Admissibility of Evidence and Documents:
The Supreme Court held that the question of sanction under Section 197 Cr.P.C. should not be confused with the scheme of trial under the Code of Criminal Procedure. The accused should be allowed to produce relevant documents and materials to establish the necessity for sanction. The Court referred to several decisions, including Matajog Dubey Vs. H.C. Bhari and S.B. Saha's case, to support this view. The Court concluded that the accused could produce documentary materials admissible without formal proof to support the plea of sanction.
Conclusion:
The Supreme Court dismissed the appeals, holding that the High Court's order was legal and justified. The Court emphasized that the acts committed by the respondents were purported to be in the exercise of official duties, thus requiring sanction under Section 197 Cr.P.C. The Court clarified that it had not expressed any opinion on the merits of the case.
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