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Showing 281 to 290 of 290 Records
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1990 (12) TMI 11
Issues Involved:
1. Inclusion of one-eighth share in the mill estates in the dutiable estate.
2. Nature of the deceased's interest in the Indo-Commercial Syndicate Mills.
3. Applicability of section 40(a) of the Estate Duty Act, 1953.
Detailed Analysis:
Issue 1: Inclusion of One-Eighth Share in the Mill Estates
The Tribunal held that only one-eighth share in the mill estates is liable to be included in the dutiable estate of the deceased, based on the interpretation of the will executed by S. V. Venkatesa Naidu. The Tribunal applied the principle from P. K. Balachandran v. CED [1968] 70 ITR 632 (Ker) and concluded that the deceased Rajammal had only a right of control and management over the mill, not an absolute interest. Therefore, only her one-eighth share could be included in the dutiable estate.
Issue 2: Nature of the Deceased's Interest in the Indo-Commercial Syndicate Mills
The court had to interpret the will dated January 3, 1957, to determine the nature of the interest conferred upon Rajammal. The will stated that Rajammal shall have "absolute rights over all my properties," including the Indo-Commercial Syndicate Mills. The court noted that the use of the term "absolute rights" and "sole proprietrix" indicated that Rajammal was intended to have complete and unfettered control over the properties, including the mills. The court concluded that the testator intended to confer an absolute interest in favor of Rajammal, which included the entirety of the mill assets.
Issue 3: Applicability of Section 40(a) of the Estate Duty Act, 1953
The court examined whether the provisions of section 40(a) applied, which considers the value of the benefit accruing from the cesser of an interest. The court found that Rajammal had an absolute and unfettered right over the entire income from the mills, which ceased upon her death, resulting in a benefit accruing to her sons. The court held that since Rajammal's interest extended to the whole income of the property, the principal value of the entire property should be included in the dutiable estate under section 40(a).
Conclusion:
The court concluded that:
1. The Tribunal was incorrect in holding that only one-eighth share in the mill estates is liable to be included in the dutiable estate of the deceased.
2. Rajammal had an absolute interest in the Indo-Commercial Syndicate Mills, and this interest passed upon her death.
3. The provisions of section 40(a) of the Estate Duty Act, 1953, applied, and the entirety of the mill assets should be included in the dutiable estate.
The court answered the questions referred in Tax Case No. 270 of 1980 in the negative and against the accountable person, and the two questions in Tax Case No. 271 of 1980 in the negative and in favor of the Controller of Estate Duty. Costs were awarded to the Controller of Estate Duty in T.C. No. 271 of 1980.
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1990 (12) TMI 10
Issues:
1. Interpretation of Income-tax Rules regarding extra shift allowance on generators and electrical machinery.
2. Eligibility for development rebate on ancillary equipment for generator installation.
Analysis:
1. The case involved a dispute over the allowance of extra shift allowance on generators and electrical machinery for the assessment year 1975-76. The Income-tax Officer denied the claim citing the relevant Income-tax Rules, specifically item III(iv)(1) of Appendix I, which mentioned stationary plant not eligible for extra shift allowance. The Commissioner of Income-tax (Appeals) upheld this decision, but the Tribunal ruled in favor of the assessee, stating that the prohibition applied only to stationary plants and not to rotary machines like generators. The High Court analyzed the meaning of "other stationary plant" under the category of "Electrical Machinery" using the ejusdem generis rule, which restricts general words to objects of the same class as the specific words preceding them. The Court concluded that generators, being rotary machines, were not stationary plants like switchgears and transformers, and thus, were entitled to extra shift allowance. The first question was answered in favor of the assessee.
2. The second issue pertained to the eligibility for development rebate on ancillary equipment necessary for generator installation. The Finance Act, 1974, stipulated that development rebate would not apply if the machinery or plant was installed after May 31, 1974, unless purchased or ordered before December 1, 1973. As the ancillary equipment in question was neither purchased nor ordered before the specified date, the assessee was deemed ineligible for development rebate on these items. Consequently, the second question was answered in favor of the Revenue. Both judges concurred with the decisions rendered on each issue.
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1990 (12) TMI 9
Issues:
1. Assessment of penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 1974-75.
2. Claimed deduction of interest under section 214 for the assessment year 1967-68 in the return of income for the assessment year 1974-75.
3. Disallowance of the claim for deduction of interest under section 214.
4. Appeal against the penalty order before the Commissioner of Income-tax (Appeals).
5. Tribunal's decision to cancel the penalty order under section 271(1)(c).
6. Reference to the High Court regarding the cancellation of the penalty order.
Analysis:
The case involved a reference under section 256(1) of the Income-tax Act, 1961, concerning the cancellation of a penalty imposed under section 271(1)(c) for the assessment year 1974-75. The dispute arose from the assessee's claim of deduction of interest under section 214 for the assessment year 1967-68 in the return of income for 1974-75. The Assessing Officer disallowed the deduction, leading to penalty proceedings under section 271(1)(c) for concealment and inaccurate particulars in the return.
The Commissioner of Income-tax (Appeals) upheld the penalty order, prompting the assessee to appeal before the Tribunal. The Tribunal found that the assessee had disclosed the interest particulars in the return and statement, thus canceling the penalty order. The High Court addressed the question of law regarding the cancellation of the penalty order, emphasizing that if the impugned income was not liable for assessment in the relevant year, the issue of concealment did not arise. The Court noted that the assessee had disclosed the interest income in question, leading to a lack of merit in the Revenue's contention.
Ultimately, the High Court upheld the Tribunal's decision to cancel the penalty order, ruling in favor of the assessee. The judgment highlighted the importance of disclosure and the relevance of the income's assessability in determining the validity of penalty imposition under section 271(1)(c) of the Income-tax Act, 1961.
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1990 (12) TMI 8
Issues involved:
The judgment involves a reference at the instance of the Revenue u/s 256(1) of the Income-tax Act, 1961 for the assessment year 1978-79 regarding the change in the method of accounting for payment of bonus from cash system to mercantile system.
Summary:
Issue 1: Change in Accounting Method
The assessee historically followed the cash system of accounting for bonus payments, debiting the profit and loss account for bonuses actually paid during the year. However, in the year under consideration, the assessee also debited a provision for bonus that accrued during the year, transitioning to the mercantile system. The Income-tax Officer disallowed this provision, stating it allowed deduction for bonus under both systems. The Commissioner of Income-tax (Appeals) supported the assessee's method, and the Tribunal upheld this decision, noting the change was bona fide and consistent in subsequent years.
Issue 2: Tribunal's Decision
The Tribunal found that the assessee's change to the mercantile system for bonus payments was in line with recognized accounting methods and reflected true profits. The change was made after the Payment of Bonus Act, 1965, became statutory, ensuring bonus payments were unavoidable. The Tribunal held that the change was bona fide, consistently followed, and not prejudicial to the Revenue. The Tribunal emphasized that an assessee can change accounting methods if done in good faith and consistently, supporting the Commissioner of Income-tax (Appeals)'s decision.
Conclusion:
The High Court upheld the Tribunal's decision, affirming that the assessee's change in the method of accounting for bonus payments from cash to mercantile was valid and consistent with accounting principles. The Court found no grounds for interference, ruling in favor of the assessee and answering the reference question affirmatively.
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1990 (12) TMI 7
High Court, while sustaining the order of the Tribunal remitting the matter to the Income-tax Officer - It is implicit in the order of the High Court that the Income-tax Officer should dispose of the matter, on remand, in accordance with law. If there are subsequent binding pronouncements of this court in the matter, it is needless to say, the Income-tax Officer will take due note of them - revenue's special leave petition dismissed
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1990 (12) TMI 6
Jurisdiction to reopen the assessment under sections 147(a) and 148 - capital gains on transfer of mining business - validity of reassessment - Whether the consideration received for such transfer is towards goodwill and therefore exempt from tax - question is premature as the matter has not been gone into by the ITO - held that Income-tax Officer had validly and legally exercised his jurisdiction and reopened the assessment for the assessment year 1957-58
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1990 (12) TMI 5
Whether, the assessee would be entitled to claim as deductions the sums, for the assessment years 1959-60 to 1964-65, or any part thereof under section 10(2)(xv) or under the corresponding provisions of section 37 - held that income of expenditure of the fund was not belonging to the assessee-company and hence deficit paid by appellant is not allowable as an expenditure
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1990 (12) TMI 4
The Supreme Court dismissed the appeal against the High Court judgment in favor of the assessee, stating that the assessment was time-barred as the Income-tax Officer did not record any finding of concealment within 4 years. The appeal was dismissed with no order as to costs.
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1990 (12) TMI 3
Whether order of the Tribunal allowing the unabsorbed development rebate in respect of the plant and machinery not installed by the assessee under section 33 (1), was legal and proper - Whetherthe order of the Tribunal holding that the conditions under section 33(1) are satisfied, is legal and proper - held that new firm is not the owner who installed the plant and machinery - development rebate not entitled
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1990 (12) TMI 2
Method of valuation of Stock - ITO held that there was no justification for the assessee to vary from the regular accounting principle of valuing stock - Whether the ITO could reject the consistent practice of the assessee in valuing stock in exercise of his powers under s. 145 - ITO is justified under s. 145 to reject the books of accounts and determine the correct profits and gains.
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