|
Advanced Search Options
Case Laws
Showing 81 to 88 of 88 Records
-
1975 (10) TMI 8
Issues:
1. Jurisdiction of the Income-tax Officer in issuing notices of demand under section 156 of the Income-tax Act, 1961 without rectification orders under section 35(5) of the Indian Income-tax Act, 1922.
2. Validity of notices of demand without proper notice as required by section 35 of the Indian Income-tax Act, 1922.
Analysis:
Issue 1:
The petition challenged the validity of the notices of demand issued by the Income-tax Officer without prior rectification orders under section 35(5) of the Indian Income-tax Act, 1922. The court found no substance in this contention. The Income-tax Officer had included the share income in the assessment with proper consent and notice to the petitioner. For the assessment years in question, rectification was made with the consent of the petitioner's counsel. The court noted that the necessary orders for rectification were passed under section 35(5), fulfilling the requirements of the law. Thus, the first point raised by the petitioner failed.
Issue 2:
The second contention was regarding the lack of notice as required by the first proviso to section 35(1) of the Indian Income-tax Act, 1922. The court emphasized that the purpose of the notice provision was to ensure the assessee's opportunity to be heard before any adverse order. In this case, the petitioner had knowledge of the proceedings and was given a reasonable opportunity to be heard. The court cited a precedent where the Supreme Court held that if the assessee is aware of the proceedings and has been given a chance to be heard, the absence of a written notice does not invalidate the order. The court concluded that the petitioner had sufficient notice and opportunity to be heard in the rectification proceedings. Therefore, the second point raised by the petitioner also failed.
In conclusion, the court dismissed the petition, finding no merit in the challenges raised by the petitioner. The petition was rejected with costs, including a hearing fee.
-
1975 (10) TMI 7
Issues involved:
The legality of search and seizure conducted under a warrant of authorisation u/s 132 of the Income-tax Act, 1961, and the validity of the warrant authorising the search.
Judgment Summary:
In the case involving Civil Writs Nos. 968, 969, 4894, and 4895 of 1975, the petitioners challenged the search and seizure conducted under a warrant of authorisation issued by the Commissioner of Income-tax u/s 132 of the Income-tax Act, 1961. The petitioners contended that the search was illegal as the Commissioner of Income-tax did not have the necessary statutory belief to authorize the search. A previous judgment by a Division Bench of the court had quashed a similar warrant of authorisation, declaring the search illegal due to the absence of proper authorization based on statutory belief.
The Division Bench held that the issuance of general warrants or warrants lacking specific details, such as the name of the person whose premises were to be searched, was illegal. It was also ruled that when the basis for action u/s 132(1) of the Act was missing, no enquiry u/s 132(5) could be conducted. Consequently, the cash and jewellery seized during the search were ordered to be returned.
The court considered arguments presented by the revenue's counsel regarding previous decisions but found them distinguishable. Relying on the Supreme Court's observations in Gemini Leather Stores v. Income-tax Officer, the court upheld the decision of the Division Bench in quashing the warrant of authorisation. The court allowed the petitions, quashed the warrant of authorisation, and ordered the return of money, jewellery, and other items seized from the petitioners' possession within three weeks.
-
1975 (10) TMI 6
Issues Involved:
1. Entitlement to relief under sections 84 and 101 of the Income-tax Act, 1961.
2. Requirement of maintaining separate accounts for new industrial units.
3. Computation method for capital employed and profits for tax exemption purposes.
4. Onus of proof for claiming tax exemption.
5. Applicability of principles of apportionment.
Detailed Analysis:
1. Entitlement to Relief under Sections 84 and 101:
The primary issue was whether the assessee was entitled to relief under sections 84 and 101 of the Income-tax Act, 1961, for the profits of its Ambattur unit. The assessee claimed exemption under these sections, stating that the new industrial undertaking at Ambattur met all the conditions specified in section 84(2) and had made profits. The Tribunal held that the assessee was entitled to the relief claimed, as it had fulfilled the statutory conditions and made assessable profits.
2. Requirement of Maintaining Separate Accounts:
The Income-tax Officer (ITO) initially rejected the assessee's claim on the grounds that separate accounts for the new unit were not maintained. The assessee argued that there was no statutory requirement to maintain separate accounts for claiming exemption under sections 84 and 101. The Appellate Assistant Commissioner and the Tribunal agreed with the assessee, stating that the lack of separate accounts did not disqualify the claim for exemption.
3. Computation Method for Capital Employed and Profits:
The assessee computed the capital employed in the new unit by apportioning the current assets and liabilities based on the turnover ratio between the new unit and the old unit. The ITO rejected this method, stating that it was not admissible. However, the Tribunal held that the method adopted by the assessee was correct and that the ITO should have suggested a more appropriate method if he found it unsatisfactory. The Tribunal emphasized that the ITO could not deny the exemption altogether on this basis.
4. Onus of Proof for Claiming Tax Exemption:
The Revenue argued that the onus of proving entitlement to exemption under sections 84 and 101 lay on the assessee. The Tribunal found that the assessee had discharged this onus by submitting the computation of capital and profits before the ITO. The Tribunal noted that the ITO should have examined the computation and suggested corrections if necessary, rather than rejecting the claim outright.
5. Applicability of Principles of Apportionment:
The Tribunal and the High Court both acknowledged that the difficulty in apportionment could not be a ground for rejecting the claim. The Supreme Court's observations in similar cases were cited, emphasizing that a rule of apportionment consistent with commercial accounting must be evolved for determining the income attributable to the new industrial undertaking. The High Court agreed with the Tribunal's view that the apportionment method based on turnover was appropriate and that the assessee was entitled to the relief claimed.
Conclusion:
The High Court concluded that the assessee was entitled to the relief claimed under sections 84 and 101 of the Income-tax Act, 1961, for the profits of its Ambattur unit. The court emphasized that the right to relief was established once the statutory conditions were met and that the computation of the extent of relief was a separate matter. The court answered the question in the affirmative, in favor of the assessee, and against the Revenue.
-
1975 (10) TMI 5
Issues involved: The issue involves whether the assessee could raise a new ground in appeals against fresh assessments made according to the directions of the Appellate Assistant Commissioner, which had not been raised in the appeals against the original assessments for the assessment years 1948-49, 1949-50, and 1950-51.
Summary:
The assessee, a jute milling company, had its original assessments set aside on appeal with a direction to make fresh assessments. During the appeals before the Appellate Assistant Commissioner, the assessee raised a new ground for the first time, contending that the sale proceeds of loom hours were not revenue receipts and should not be taxed. This claim was based on a Supreme Court decision. The department objected to this new plea, arguing that the earlier assessment orders were final and that the sale proceeds were already shown as income in the returns. However, the Appellate Assistant Commissioner allowed the new plea, treating the sale proceeds as capital gains based on the Supreme Court decision.
The department appealed to the Tribunal, challenging the admission of the new plea and the treatment of the sale proceeds as capital gains. The Tribunal rejected these arguments and upheld the decision of the Appellate Assistant Commissioner. The High Court held that the fresh assessment orders superseded the previous orders, and it was the duty of the revenue authorities to assess tax in accordance with the provisions of the Act. As capital gains can only be assessed under a specific section of the Act, the appellate authorities were justified in allowing the assessee to raise the new plea regarding the nature of the sale proceeds.
The High Court answered the question in the affirmative, against the revenue. No costs were awarded as no one appeared for the assessee. Judge Hazra agreed with the judgment.
-
1975 (10) TMI 4
Issues Involved:
1. Validity of the transfer of assessment jurisdiction.
2. Adequacy of notice and opportunity provided to the petitioner.
3. Maintainability of the writ petitions in light of alternative statutory remedies.
4. Alleged breach of principles of natural justice.
Detailed Analysis:
1. Validity of the Transfer of Assessment Jurisdiction:
The petitioner challenged the transfer of assessment jurisdiction from the Income-tax Officer, District VIII(9), New Delhi, to the Income-tax Officer, Special Circle IX, New Delhi, and subsequently to the Income-tax Officer, Khammam. The Delhi High Court quashed the initial transfer for being violative of section 127 of the Income-tax Act. However, the subsequent transfer to Khammam was at the petitioner's request and was deemed valid by the Delhi High Court. The court held that the transfer was in accordance with section 127 and did not require re-issuing notices already served by the previous officer.
2. Adequacy of Notice and Opportunity Provided to the Petitioner:
The petitioner argued that the notices under sections 142(1) and 143(2) were served on his secretary on May 4, 1973, with the hearing scheduled for the same day, which he claimed was inadequate. The court examined whether the petitioner had reasonable time and opportunity to comply with the notices. It was found that the petitioner had been given several opportunities to furnish the required information but failed to do so. The court noted that the petitioner had more than a year to compile the information since the last adjournment on January 10, 1972. The court concluded that the notices served were adequate and the petitioner had reasonable opportunity to comply.
3. Maintainability of the Writ Petitions in Light of Alternative Statutory Remedies:
The court discussed the doctrine of exhaustion of statutory remedies, emphasizing that the Income-tax Act provides a complete machinery for assessment and relief against improper orders. The court referred to several Supreme Court judgments, including Shivram Poddar v. Income-tax Officer and Champalal Binani v. Commissioner of Income-tax, to support the view that writ petitions should not be entertained when adequate alternative remedies are available. The court noted that the petitioner had already filed appeals under section 246, which were pending before the Appellate Assistant Commissioner. The court held that the petitioner had an adequate alternative remedy and that the writ petitions were not maintainable on this ground.
4. Alleged Breach of Principles of Natural Justice:
The central argument of the petitioner was that the assessment orders under section 144 were passed in violation of the principles of natural justice. The court examined whether the petitioner was given a reasonable opportunity to present his case. It was found that the petitioner had been given multiple opportunities to furnish the necessary information but had failed to do so. The court referred to the Supreme Court's ruling in Fedco (P.) Ltd. v. S. N. Bilgrami, emphasizing that the court is the final authority to determine the reasonableness of the opportunity provided. The court concluded that there was no breach of natural justice in this case.
Conclusion:
The court dismissed the writ petitions, holding that the petitioner had reasonable opportunities to present his case and that the assessment orders were valid. The court also emphasized the adequacy of alternative statutory remedies available to the petitioner, making the writ petitions untenable. The petitions were dismissed with costs, and the court awarded advocate's fees of Rs. 100 in each case.
-
1975 (10) TMI 3
Issues involved: Disallowance of foreign tour expenses of the wife of the managing director of the assessee-company as business expenditure.
Summary:
The High Court of Gujarat delivered a judgment regarding the disallowance of foreign tour expenses of the wife of the managing director of a private limited company as business expenditure for the assessment years 1960-61 to 1964-65. The managing director and his wife undertook a tour of Japan, claiming it was for business purposes due to his indifferent health. The company sought to deduct the expenses incurred for the wife's tour, which was disallowed by the Income Tax Officer (ITO). The matter was appealed to the Appellate Assistant Commissioner (AAC) who initially agreed with the company but was later reversed by the Tribunal. The main question referred to the court was whether the disallowed expenditure for the wife's tour was admissible as business expenditure. The court considered the arguments presented by the advocate for the company, emphasizing the necessity of the wife's presence due to the managing director's health condition. However, the court held that such expenses were personal in nature, citing a previous Supreme Court ruling. Therefore, the court ruled in favor of the tax authorities, disallowing the expenses claimed by the company and ordering them to pay the costs of the reference.
This judgment highlights the distinction between personal and business expenses, emphasizing that expenses incurred for personal needs, even if related to business activities, cannot be claimed as business expenditure. The court's decision underscores the importance of maintaining clear boundaries between personal and business expenses in tax matters.
-
1975 (10) TMI 2
Minor was admitted to the benefits of partnership - Rule that where the shares in the profits are unequal, the losses must be shared in the same proportion as the profits if there is no agreement as to how the losses are to be apportioned, does not also apply to this case. In this case even if the adult partners bear the losses in proportion to their respective shares in the profits, the amount of loss in the minor's share would still remain undistributed
-
1975 (10) TMI 1
Status of individual or Hindu undivided family for assessment - family hotchpot - Income from property (Kathoke Lodge) - Concept of a Hindu undivided family - Whether a single male can form a joint Hindu family with his wife and unmarried daughter - HELD THAT:- Kathoke Lodge was not an asset of a pre-existing joint family of which the appellant was a member. It became an item of joint family property for the first time when the appellant threw what was his separate property into the family hotchpot. The appellant has no son. His wife and unmarried daughter were entitled to be maintained by him from out of the income of Kathoke Lodge while it was his separate property. Their rights in that property are not enlarged for the reason that the property was thrown into the family hotchpot. Not being coparceners of the appellant, they have neither a right by birth in the property nor the right to demand its partition nor indeed the right to restrain the appellant from alienating the property for any purpose whatsoever. Their prior right to be maintained out of the income of Kathoke Lodge remains what it was even after the property was thrown into the family hotchpot : the right of maintenance, neither more nor less. Thus, Kathoke Lodge may be usefully described as the property of the family after it was thrown into the common stock, but it does not follow that in the eye of Hindu law it belongs to the family, as it would have, if the property were to devolve on the appellant as a sole surviving coparcener.
The property which the appellant has put into the common stock may change its legal incidents on the birth of a son but until that event happens the property, in the eye of Hindu law, is really his. He can deal with it as a full owner, unrestrained by considerations of legal necessity or benefit of the estate. He may sell it, mortgage it or make a gift of it. Even a son born or adopted after the alienation shall have to take the family hotchpot as he finds it. A son born, begotten or adopted after the alienation has no right to challenge the alienation.
Since the personal law of the appellant regards him as the owner of Kathoke Lodge and the income therefrom as his income even after the property was thrown into the family hotchpot, the income would be chargeable to income-tax as his individual income and not that of the family.
Thus, we dismiss the appeal but there will be no order as to costs.
Appeal dismissed.
|
9911796707
