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Showing 221 to 224 of 224 Records

• 1991 (12) TMI 4
  
  Issues Involved:
  1. Disallowance of salary paid to an employee for the period spent in a foreign country under section 40A(5) of the Income-tax Act, 1961.
  2. Classification of foreign travel expenses as capital expenditure.
  3. Entitlement to weighted deduction for freight charges and export expenses under section 35B.
  4. Allowability of legal fees exceeding Rs. 5,000 under section 80VV.
  5. Entitlement to write off terminal loss under section 32(1)(iii).
  
  Issue-wise Detailed Analysis:
  
  1. Disallowance of Salary Paid to an Employee for Foreign Tour Period:
  The first issue pertains to whether the salary paid to an employee during a foreign tour should be excluded from disallowance under section 40A(5). The Tribunal upheld the Income-tax Officer's decision that the salary paid to the employee during the foreign tour cannot be excluded from disallowance under section 40A(5). The court noted that the employee was employed in India and merely traveled abroad for business purposes. Therefore, the salary paid during the foreign tour period could not be considered as employment outside India. The court concluded that the disallowance should not exclude the salary paid during the foreign tour, affirming the Tribunal's decision.
  
  2. Classification of Foreign Travel Expenses as Capital Expenditure:
  The second issue concerns whether foreign travel expenses incurred to explore setting up a joint venture unit in Malaysia should be classified as capital expenditure. The Tribunal agreed with the Income-tax Officer and the Commissioner (Appeals) that the expenses were capital in nature. The court distinguished this case from the Alembic Glass Industries Ltd. case, noting that the proposed joint venture in Malaysia was not an expansion of the assessee's existing business but an independent unit. The court held that the expenses were capital in nature and not deductible as business expenditure under section 37(1).
  
  3. Entitlement to Weighted Deduction for Freight Charges and Export Expenses:
  The third issue was not pressed by the assessee, and therefore, the court did not address it.
  
  4. Allowability of Legal Fees Exceeding Rs. 5,000 under Section 80VV:
  The fourth issue pertains to whether legal fees exceeding Rs. 5,000 were allowable under section 80VV. The Tribunal upheld the Commissioner's decision that Rs. 5,000 paid for surtax assessment and Rs. 2,500 paid to C.C. Chokshi and Co. for general advice were not hit by section 80VV. The court noted that section 80VV applies only to expenses incurred in proceedings before income-tax authorities or the Tribunal relating to the determination of liability under the Income-tax Act. Therefore, the fees paid for surtax assessment and general advice were allowable, and the Tribunal's decision was affirmed.
  
  5. Entitlement to Write Off Terminal Loss under Section 32(1)(iii):
  The fifth issue concerns the assessee's entitlement to write off terminal loss under section 32(1)(iii). The Tribunal upheld the Commissioner's decision that the assessee could claim terminal loss for discarded machinery. The court noted that section 32(1)(iii) does not require the machinery to be sold to claim terminal loss. Since the machinery was discarded and its value estimated, the assessee was entitled to claim the loss. The Tribunal's decision was affirmed.
  
  Conclusion:
  The court affirmed the Tribunal's decisions on all issues, ruling against the assessee on the first two issues and in favor of the assessee on the fourth and fifth issues. The third issue was not addressed as it was not pressed by the assessee. The references were answered accordingly with no order as to costs.

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• 1991 (12) TMI 3
  
  Issues:
  The issues involved in this case are:
  1. Interpretation of exemption under section 54(1) of the Income-tax Act, 1961.
  2. Liberal construction of the term 'purchase' in relation to the Transfer of Property Act.
  
  Interpretation of Exemption under Section 54(1):
  Late Dr. Laxmichand Nagda sold his self-occupied dwelling house and entered into an agreement to purchase a flat in Bombay. The Income-tax Officer initially denied exemption under section 54, stating that the registered sale deed for the flat was not executed within one year of the house sale. However, the Commissioner of Income-tax (Appeals) allowed the appeal, granting the exemption. The Tribunal upheld this decision, emphasizing the actual use of the flat for dwelling within a reasonable time frame.
  
  Liberal Construction of the Term 'Purchase':
  The Revenue contended that a registered sale deed and title transfer were prerequisites for considering a transaction as a 'purchase' under section 54. However, the court disagreed, citing various judicial precedents. The court highlighted that the word 'purchase' should be interpreted liberally, not just in a literal sense but in a broader context. Referring to past cases, the court emphasized that the word 'purchase' should be understood in a wider sense, focusing on the actual acquisition and use of the property rather than just legal technicalities.
  
  Conclusion:
  The court dismissed the application under section 256(2) of the Income-tax Act, stating that no question of law arose from the Tribunal's decision. The court upheld the Tribunal's ruling, emphasizing that the exemption under section 54 was correctly granted based on the actual acquisition and use of the property for dwelling purposes. The court clarified that the legal title transfer within a specific timeframe was not a mandatory condition for availing the exemption. The court also distinguished a previous Supreme Court decision, stating that its interpretation did not apply to the current case. Ultimately, the court dismissed the application and discharged the rule, with no order as to costs.

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• 1991 (12) TMI 2
  
  The High Court of Bombay allowed the Commissioner of Income-tax's application under section 256(2) of the Income-tax Act, 1961, to refer two questions of law regarding the admissibility of relief under section 23(1) for commercial shops. The Tribunal confirmed the relief for the assessee based on the property being registered as a commercial complex and not a residential unit. The application was allowed, and no costs were awarded.

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• 1991 (12) TMI 1
  

  Additional amount payable for the import of machinery on account of devaluation of rupees - development Rebate - includibility of additional amount paid in actual cost for purpose of rebate - though development rebate was intended to promote development of industries, this could not be allowed at the cost of the foreign exchange resources of the country which are also depleted when there is an increase in liability due to devaluation of the currency

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