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Case Laws
Showing 41 to 60 of 612 Records
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1960 (12) TMI 12 - SUPREME COURT
Dealer In Shares, High Court To Interfere, Jurisdiction Of High Court, Purchase And Sale, Tax Proceedings
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1960 (12) TMI 11 - SUPREME COURT
Whether in the computation of taxable income for purposes of income-tax and excess profits tax, commission allowed to Mahadevan at 12 1/2% should be allowed after deducting the excess profits tax paid?
Held that:- There was thus ample evidence in support of the conclusion of the Excess Profits Tax Officer which was confirmed by the Tribunal. The High Court was not justified in seeking to reappreciate the evidence on which the conclusion of the Excess Profits Tax Officer, which was confirmed by the Tribunal was based. Their jurisdiction being advisory, the High Court had to answer the questions submitted for opinion on the facts found ; if the High Court held the view that the taxing authorities had misdirected themselves in law or had made a wrong inference in law or had failed to apply the correct tests or had misconceived the evidence, it was open to them to invite the attention of the taxing authorities to the error committed by them ; but the High Court could not set aside the decision of the taxing authorities on a reappreciation of the evidence. We may also point out that even if the High Court concluded that the total disallowance of the deduction claimed was not justified, the High Court could not substitute its own view as to what was reasonable and necessary. The High Court had, if it disagreed with the taxing authorities, still to answer the questions submitted and leave to the consideration of the Excess Profits Tax Officer what in the circumstances was reasonable and necessary.
The answer to the question whether the disallowance by the excess profits tax authorities of the commission paid to branch managers was justified under rule 12, Schedule I of the Excess Profits Tax Act should have been answered in the affirmative. Appeal allowed.
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1960 (12) TMI 10 - SUPREME COURT
Whether at the relevant time the assessee company could be deemed to be a company in which the public were substantially interested?
Held that:- The appeal is allowed and the case is remitted to the High Court for deciding the question in the light of the observations in our decision in the Raghuvanshi Mills' case [1960 (12) TMI 7 - SUPREME Court].
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1960 (12) TMI 9 - SUPREME COURT
Whether the share income of the assessees from the unregistered firm (which is separately taxed), namely, ₹ 26,110 can be set off against their share loss from registered firms, namely, ₹ 13,167 ?
Held that:- Though the decision of the High Court on the main issue and on one aspect of the question posed for its opinion was correct, it was in error in deciding that the losses of the registered firms could not be carried forward because they had been absorbed by the profits of the unregistered firm. Subject to that modification, the appeal will be dismissed
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1960 (12) TMI 8 - SUPREME COURT
Whether, on the facts and in the circumstances of the case, the payment of dividend income to the assessee's wife, Ena Mitter, under the covenant in the deed of assignment dated January 19, 1953, was merely a case of application of the assessee's income ?
Held that:- The true position is that if a person longer his alienated or assigned the source of his income so that it is no longer his, he may not be taxed upon the income arising after the assignment of the source, apart from special statutory provisions like section 16(1)(c) or 16(3) which artificially deem it to be the assignor's income. But if the assessee merely applies the income so that it passes through him and goes on to an ultimate purpose, even though he may have entered into a legal obligation to apply it in that way, it remains his income. This is exactly what has happened in the present case. High court correctly answered the third question against the assessee. Appeal dismissed.
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1960 (12) TMI 7 - SUPREME COURT
Whether the company could be said to be one to which section 23A(1) of the Act was applicable, regard being had to the third proviso and the Explanation under it?
Held that:- the judgment and order of the High Court cannot be upheld. Directors cannot, by reason of being directors, be said not to be members of the public. To that extent, the judgment is erroneous. There is a finding by the Tribunal in the supplementary statement of the case that the shares held by Bipinchandra, Harishchandra and Krishnakumar were under the control of their father, Maganlal Parbhudas. Their holding was 3,000 and with Maganlal's holding of 1,344 shares, makes up a total of 4,344 shares. Though the question as framed by the High Court appears to have been correctly answered in the negative, it does not dispose of the matter. The question to be determined still is whether more than 75 per cent. of the shares are not beneficially held by the public. We accordingly set aside the judgment and order of the High Court and direct the High Court to decide the question originally framed by it, viz.
"Whether on the facts and circumstances of the case the provisions of section 23A of the Indian Income-tax Act (XI of 1922) are applicable to the petitioners ? - Appeal allowed. Case remanded.
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1960 (12) TMI 6 - SUPREME COURT
Whether the amount paid by the consumers for new connections is capital receipt and not liable to tax, because the amount is paid by the consumers towards expenditure to be incurred by the assessee in laying new service lines--an asset of a lasting character ?
Held that:- The receipts though related to the business of the assessee as distributors of electricity were not incidental to nor in the course of the carrying on of the assessee's business ; they were receipts for bringing into existence capital of lasting value. Contributions were not made merely for services rendered and to be rendered, but for installation of capital equipment under an agreement for a joint venture. The total receipts being capital receipts, the fact that in the installation of capital, only a certain amount was immediately expended, the balance remaining in hand, could not be regarded as profit in the nature of a trading receipt.The High Court was in error in holding that the excess of the receipts over the amount expended for installation of service lines by the assessee was a trading receipt. Appeal allowed.
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1960 (12) TMI 5 - SUPREME COURT
Whether on the facts and in the circumstances of the case the amount of ₹ 3,20,162 is an allowable deduction ?
Held that:- condition has not been fulfilled and the loss which the appellant has incurred is not in its own business but the liability arose because of the business of another person and that is not a permissible deduction within section 10(1) of the Act. It is not a loss which has to be deducted in respect of the business of the respondent from the profits and gains of the respondent's business. High Court was in error in answering the question in favour of the respondent. We, therefore, allow this appeal, set aside the judgment and order of the High Court and answer the question against the respondent
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1960 (12) TMI 4 - SUPREME COURT
Whether the notice under section 34 was without jurisdiction?
Held that:- The notice under section 34 was not issued after the expiry of the period prescribed in that behalf. The notice was issued by the Income-tax Officer because he had reason to believe that by reason of failure on the part of the appellants to disclose fully and truly all material facts necessary for the assessment for the year 1950-51, income had escaped assessment. Such a notice fell manifestly within section 34(1)(a) and could be issued within eight years from the end of the year of assessment. The impugned notice under section 34 for reassessment of the income of the appellants for the year 1950-51 was, in our judgment, properly issued and the High Court was right in dismissing the petition for a writ to quash the notice. Appeal dismissed.
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1960 (12) TMI 3 - SUPREME COURT
Whether the acquisition of the managing agency of the Dawn Mills Co. Ltd. was in the nature of a 'business' carried on by the assessee-ccompany ?
Whether the loss suffered by the assessee-company of ₹ 1,78,438 on purchase and sale of 400 shares of the Dawn Mills Co. Ltd., being incidental to its business of acquiring the managing agency, was a loss of a revenue nature ?
Held that:- The High Court was right in holding that the acquisition of the managing agency was an acquisition of a capital asset and the loss incurred by sale of the 400 shares was of a capital nature. The High Court was also right in dismissing the notice of motion for an order directing the Tribunal to refer the question suggested by the appellants. If the acquisition of the shares was not acquisition of a stock-in-trade, but of a capital asset, the appellants, by valuing the shares at cost or market price whichever was lower, could not bring the difference between the purchase price and the valuation made by them into their trading account. Appeal dismissed.
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1960 (12) TMI 2 - SUPREME COURT
Whether the instrument of partnership dated March 27, 1946, created a valid partnership ?
Whether the fact that on January 1, 1946, there was no firm in existence would be fatal to the application for registration of the firm under section 26A of the Indian Income-tax Act or whether the firm could be registered with effect from March 26, 1946, if it is held that the firm was genuine ?
Held that:- Section 30 of the Indian Partnership Act clearly lays down that a minor cannot become a partner, though with the consent of the adult partners he may be admitted to the benefits of partnership. Any document which goes beyond this section cannot be regarded as valid for the purpose of registration. Registration can only be granted of a document between persons who are parties to it and on the covenants set out in it. If the income-tax authorities register the partnership as between the adults only contrary to the terms of the document, in substance a new contract is made out. It is not open to the income-tax authorities to register a document which is different from the one actually executed and asked to be registered. In our opinion, the Madras view cannot be accepted. Appeal allowed.
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1960 (12) TMI 1 - HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYD.
Cess on Oil seeds - Duty liability - Power of Collector ... ... ... ... ..... Rule 33 conferred regulated power on the Collector to make an assessment in that it did not prescribe any rules for the guidance of the Collector in making the assessment. We think that this argument also lacks substance. The order of the Collector is subject to revision by the District Judge. He is empowered to cancel or modify the assessment and order refund either in whole or in part and there is a specific provision made for the correction of errors, if any, made by the assessing authority. It cannot be said that the power to make an assessment is an uncanalised power and, therefore, liable to be struck off. For the aforesaid reasons we hold that there are no grounds for the issue of a writ of certiorari. The writ petition is accordingly dismissed with costs. Advocate s fee Rs. 100. Memorandum of costs Respondents costs Rs. nP. Stamp for vakalatnama. Advocate s fee. 1.71 100.00 To be paid by the petitioner to the Respdts. 101.71 ( Counsel for RR 2 and 3 did not certify)
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1960 (11) TMI 139 - GUJARAT HIGH COURT
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... ... ..... contentions ground ed on Articles 14 and 31 are barred. Apart from that consideration we hold that the Act cannot be challenged on the ground that it is not supported by a public purpose or on the ground that it is discriminatory. It is also conceded in view of the several pronouncements of the Supreme Court that It cannot be challenged on the ground of adequacy or otherwise of compensation. It cannot also be held on a consideration of the provisions in the Act for compensation that the compensation provided therein is inadequate. On all these reasons the present statute in our view falls under Article 31A and, therefore, cannot he challenged on the grounds raised by the petitioner. 19. The petition therefore, falls and is dismissed. So far as the question of costs is concerned, the fair order would be that each party should bear his own costs. But in view of the importance of the questions raised in this petition, we think it necessary that fees should be taxed at Rs. 350/-.
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1960 (11) TMI 138 - BOMBAY HIGH COURT
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... ... ..... deal with it, as the question was not raised before me by Mr. Amin. (17) I was informed during the course of arguments that the Society has made an application to the State Government for an order directing its exemption from the provisions of the Act as contemplated under the first proviso to section 1 (4) of the Act. That application, the learned Government Pleader informs me, could not be considered by the State Government because these proceedings have been pending. Nothing in this judgment may, however, be taken to affect a favourable consideration of that application on merits. (18) The result is that I hold, agreeing with my brother Patel, J., that the Bombay Public Trusts Act, 1950, applies to the appellant-Society, though it is registered under the Societies Registration Act and has its objects not confined to one State. This appeal, therefore, will have to be dismissed, but in the circumstances of this case there will be no order as to costs. (19) Appeal dismissed.
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1960 (11) TMI 137 - SUPREME COURT
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... ... ..... s aspect and have kept in mind the undisputed right of the legislature to decide what provisions are necessary to give effect to the main object of the legislation. In these cases that petitioners have complained that the main object of the impugned provisions is not the prohibition of slaughter of animals which are still useful; the impugned provisions as they are worded really put a total ban on the slaughter of bulls, bullocks and buffaloes and for all practical purposes they put a stop to the profession and trade of the petitioners. We have held that this complaint is justified in respect of the main provisions in the three Acts. 40. We, therefore, allow the three writ petitions and direct, as we directed in Md. Hanif Quareshi's case 1959 1SCR629 the respondent States not to enforce the Acts or the rules made thereunder in so far as they have been declared void by us. The petitioners will be entitled to their costs of the hearing in this Court. 41. Petitions allowed.
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1960 (11) TMI 136 - MADRAS HIGH COURT
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... ... ..... ld that all the deposits on which interest was paid in 1950 constituted borrowed capital within the meaning of section 10(2)(iii). Where interest charges are to be deducted under section 10(2)(iii) of the Act, there can be no apportionment on the basis that a portion of the income resulting from the trading activities of the assessee was tax free. There was thus no statutory basis for any apportionment. Once again we have to emphasise that, where the deduction has to be under section 10(2)(iii) and not under the proviso to section 8, the fact that the income from the Mysore securities was tax free was not a relevant factor. ₹ 2,80,194 was also an item of admissible deduction under section 10(2)(iii) of the Act. Our answer to the question is that the entire interest paid by the bank in the year of account inclusive of the sum of ₹ 2,80,194 was a permissible deduction under section 10(2)(iii) of the Act. The assessee will be entitled to the costs of this reference.
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1960 (11) TMI 135 - MADHYA PRADESH HIGH COURT
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... ... ..... relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods and the like. The validity of the Explanation to paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, was upheld by the Supreme Court. If the Explanation is valid, it follows that the substantive provision must also be held to be valid. In view of the decision of the Supreme Court the power given to the Central Government under section 12 of the Finance Act, 1950, must be held to be a wide one permitting the Government to modify a provision substantially if it becomes necessary for the removal of a difficulty. The second question must, therefore, be answered in the affirmative. Both the questions referred to us for decision are, therefore, answered in the affirmative. The assessee shall have costs of this reference. Counsel's fee is fixed at ₹ 250.
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1960 (11) TMI 134 - PATNA HIGH COURT
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... ... ..... ct of service but the payment was made after the contract of service was broken and the compensation was fixed as a result of a subsequent agreement. It is manifest that the principle of that case has no application to the present case. On the contrary, my concluded opinion is that the present case falls within the principle enunciated in Dale v. de Soissons 1950 32 Tax Cas. 118and Henry v. Arthur Foster and Henry v. Joseph Foster 1932 16 Tax Cas. 605to which I have already made reference. For these reasons I hold that in the facts and circumstances of this case the sum of ₹ 25,200 received by the assessee during the previous year was an income receipt of the assessee liable to be taxed under the Income-tax Act. I would accordingly answer the question of law referred by the Income-tax Appellate Tribunal against the assessee and in favour of the Income-tax Department. The assessee must pay the costs of this reference. Hearing fee ₹ 250. Kanhaiya Singh, J.-I agree.
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1960 (11) TMI 133 - PATNA HIGH COURT
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... ... ..... . Learned counsel for the assessee referred in this connection to the order of the Income-tax Officer, on page four of the paper-book, where it is said that the amount of ₹ 3,19,766 includes a sum of ₹ 10,906 as "erection cost". Learned counsel submitted that the amount of ₹ 10,906 was really the cost of the materials and this amount should be deducted under section 10(2)(v) of the Income-tax Act. It is, however, not possible to entertain this argument of the assessee at this stage. No such claim was made by the assessee with regard to ₹ 10,906 before the Income-tax Appellate Tribunal, nor was such a claim made by him in his application under section 66(1) of the Income-tax Act. In my opinion the question does not arise out of the order of the Tribunal and it is not open to the assessee to debate this question at this stage. I would, therefore, reject the argument of learned counsel for the assessee on this point. Kanhaiya Singh, J.-I agree.
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1960 (11) TMI 132 - PATNA HIGH COURT
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... ... ..... ethod for valuing the bonus shares was left open and no decision was given on this point and the case was disposed of on another line of reasoning. I am, however, of the opinion for reasons already stated that the bonus shares should be valued at the face value of the shares and with the greatest respect I differ from the view expressed by the Bombay High Court in Emerald and Co. Ltd.'s case (supra) on this point. For the reasons expressed, I hold that, in the facts and circumstances of this case, there is no legally taxable profit made by the assessee on the sale of shares of the Rohtas Industries Limited and the income-tax authorities were wrong in holding that the profit should be computed at ₹ 3,11,646 or any other amount. I would accordingly answer the question of law referred by the Income-tax Appellate Tribunal in favour of the assessee and against the Income-tax Department. The assessee is entitled to the costs of this reference. Kanhaiya Singh, J.-I agree.
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