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Case Laws
Showing 141 to 160 of 1090 Records
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1971 (11) TMI 47
Issues:
- Maintainability of appeal against the levy of interest under section 139(1)(iii)(b) of the Income-tax Act, 1961.
- Interpretation of whether interest levied should be considered as "tax" for appeal purposes.
- Comparison of interest, penalty, and tax in the context of appeal rights.
Analysis:
The High Court of Andhra Pradesh addressed the issue of the maintainability of an appeal against the levy of interest under section 139(1)(iii)(b) of the Income-tax Act, 1961. The respondent, a HUF, failed to submit its income tax return for the assessment year 1962-63 within the prescribed period. The ITO assessed the respondent to tax and directed the payment of interest under section 139 of the Act. The respondent appealed against the levy of interest only, which was initially dismissed as not maintainable by the AAC. However, the Income-tax Appellate Tribunal deemed the appeal maintainable and directed the AAC to decide on the merits. The central question referred to the court was whether the appeal against the interest levied was maintainable under section 246 of the Act.
The court examined the provisions of section 139(1) regarding the discretionary extension of the return filing period by the ITO and the subsequent levy of interest on the tax payable. It was highlighted that section 246 of the Act does not explicitly provide for an appeal against the levy of interest under section 139. The respondent argued that interest levied should be considered as "tax," making it appealable under section 246(c) concerning objections to the amount of tax determined. The court analyzed past judgments from various High Courts, including Andhra Pradesh, Bombay, Madras, and Allahabad, which held that interest is not tax or additional tax, and therefore, an order levying interest is not appealable.
The court referenced Supreme Court cases such as C. A. Abraham v. ITO and CIT v. Bhikaji Dadabhai & Co., which discussed penalty as part of the machinery for the assessment of tax liability. However, the court distinguished between tax, penalty, and penal interest, emphasizing that the concepts are distinct. The Supreme Court clarified in CIT v. Anwar Ali that penalty serves as a deterrent against default and is intended to be penal in nature. The court concluded that the observations in the Supreme Court cases did not overrule the previous view that interest is not equated to tax, penalty, or additional tax, and hence, the appeal to the AAC against the interest levy was not maintainable.
In summary, the court held that the appeal against the interest levied under section 139(1)(iii)(b) of the Income-tax Act, 1961, was not maintainable as interest is distinct from tax and penalty. The court reaffirmed the distinction between tax, penalty, and interest, emphasizing that interest does not fall under the category of appealable orders. The judgment provides a detailed analysis of the legal interpretations surrounding the appeal rights concerning the levy of interest under the Income-tax Act, emphasizing the specific nature of interest as compared to tax and penalty.
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1971 (11) TMI 46
Assessee entered into an agreement with another company for financing and managing the company's mills - Certain rights of supervision and management were vested in the other company - Whether the other company can be treated as assessee's manager and remuneration paid to that company is allowable - Whether Tribunal is justified in law in disallowing the claim of the assessee for deduction of Rs. 1,03,547 and Rs. 18,294 from the income as not an admissible business expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922
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1971 (11) TMI 45
This special appeal is directed against an order of Manchanda J. by which he has reviewed his earlier order allowing Writ Petition filed by the appellant - writ petition was filed against proceedings for the recovery of arrears of income-tax and was based on the ground that the recovery proceedings were time-barred - In the review applications filed by the respondents, it was asserted that two very important and relevant documents had been suppressed by the appellant – On the ground that relevant documents had been suppressed as well as on the ground that, on the basis of these relevant documents, the recovery proceedings had been taken within time, Manchanda J. allowed the review applications and dismissed the writ petition - held that judge was justified in allowing the review petition and dismissing the writ petition
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1971 (11) TMI 44
Retention of seized documents for more than 180 days - petition under articles 226 and 227 of the Constitution of India for the issuance of a writ in the nature of mandamus requiring the respondents to return the books seized - respondents is directed to return the account books and documents seized from the premises of the petitioners between the dates 7th June, 1963, to 11th June, 1963, within two months from today - Petition allowed
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1971 (11) TMI 43
Estate Duty Act, 1953 - accountable person failed to disclose a primary and a material fact necessary for making the assessment. The Assistant Controller of Estate Duty had reason to believe that the property of the deceased chargeable to estate duty had escaped assessment, by reason of the assessee's failure to disclose the material facts. The Assistant Controller of Estate Duty had, therefore, jurisdiction to issue a notice for reopening the assessment under section 59(a) - It is neither further necessary nor within the province of this court to record a final decision about the failure of the accountable person to disclose fully and truly all material facts bearing on the assessment, and the consequent escapement of property from assessment to tax
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1971 (11) TMI 42
Estate Duty Act, 1953 - The legal heir, i.e., the accountable person in this case, has not received compensation in her own individual right but has received the compensation in respect of the lands belonging to the deceased and in her capacity as the legal heir of the deceased, whose lands have been acquired. We, therefore, hold that the right to receive the compensation for the lands acquired by the Government was a valuable right which could be sold in open market. That is "property" which passed on the death of the deceased. Section 5 of the Estate Duty Act was, therefore, attracted and, in view of the large discrepancy between the award made by the Special Deputy Collector and the civil court, there was a mistake apparent from the record which the assessing officer had jurisdiction to rectify under section 61 of the Act. The impugned notice is, therefore, valid and legal
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1971 (11) TMI 41
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Income-tax Officer was justified in not allowing renewal of registration of the firm for the assessment year 1963-64 - When the assessee has several business, if one is illegal, it would not make the constitution of the firm illegal - registration cannot be denied
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1971 (11) TMI 40
This is an application challenging the notices under section 148 of the Income-tax Act, 1961, for the assessment years 1951-52 to 1962-63 and the notices dated 7th June, 1968, under section 142(1) of the said Act for the assessment years 1951-52 to 1962-63. The petitioner was served with the notices for the opening of certain assessment of a Hindu undivided family, Messrs. Pannalal Bajaj Shyam Sundar Bajaj - the notices served on the assessees did not state that they were being served in any particular capacity, therefore, the notices were liable to be quashed
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1971 (11) TMI 39
Orissa Agricultural Income Tax Act, 1947 - Charitable Or Religious Trusts - section 8 does not contravene article 14 of the Constitution - even assuming that there is any discrimination, it is section 9 which will be hit by article 14 and not the impugned clause in section 8 which is of a general nature
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1971 (11) TMI 38
Issues Involved:
1. Whether the unabsorbed depreciation from the assessment years 1951-52 to 1954-55 can be carried forward to the assessment year 1962-63.
2. Whether such unabsorbed depreciation can be set off against the sum of Rs. 6,982 assessed as income from business under section 41(1).
Detailed Analysis:
Issue 1: Carrying Forward Unabsorbed Depreciation
The primary question is whether unabsorbed depreciation from the years 1951-52 to 1954-55 can be carried forward to the assessment year 1962-63, despite the business ceasing operations from the assessment year 1955-56. The judgment clarifies that normal depreciation is allowable under section 32(1) only if two conditions are met: the business must be carried on in that year, and the assets must be used for business purposes. However, section 32(2) provides an independent provision for carrying forward unabsorbed depreciation, not contingent upon these conditions. The court emphasized that unabsorbed depreciation from previous years shall be "deemed to be the allowance for that previous year," even if no depreciation is allowable for that year due to the cessation of business or non-use of assets.
Issue 2: Setting Off Unabsorbed Depreciation Against Income Under Section 41(1)
The second issue is whether the unabsorbed depreciation can be set off against the sum of Rs. 6,982, which was assessed as business income under section 41(1). The court noted that section 41(1) creates a legal fiction where the refund received is deemed to be business income, even if the business had ceased. The court cited the principle that a statutory fiction must be carried to its logical conclusion, meaning that if the refund is deemed business income, the business should be deemed to have been carried on in that year. Consequently, the unabsorbed depreciation from past years would be available for set-off against this deemed business income.
Conclusion
The court agreed with the reasoning of the Judicial Member and the President of the Tribunal, concluding that the unabsorbed depreciation of Rs. 46,003 could indeed be carried forward to the assessment year 1962-63 and set off against the sum of Rs. 6,982 assessed as business income under section 41(1). The court answered the question in the affirmative, in favor of the assessee and against the department, awarding costs to the assessee.
Summary
The judgment addressed two main issues: the carry-forward of unabsorbed depreciation despite the cessation of business and the set-off of such depreciation against income deemed as business income under section 41(1). The court concluded that unabsorbed depreciation could be carried forward and set off against the deemed business income, answering the question in favor of the assessee.
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1971 (11) TMI 37
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the gift made by Sri Phool Chand to his wife was invalid ? - If the answer to the above question is in the affirmative, whether the amount of interest credited to the account of the wife of Sri Phool Chand, a partner in the assessee-firm, was rightly includible in the income of the assessee under section 40(b) of the Income-tax Act, 1961
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1971 (11) TMI 36
Agreement for know-how, use of trade marks and advice - Whether, on the facts and circumstances of the case, the expenditure of Rs. 50,000 was a capital expenditure which could not be allowed as a deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922
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1971 (11) TMI 35
Issues:
Validity of service of notice under section 22(2) of the Indian Income-tax Act, 1922.
Detailed Analysis:
The case involved a question referred under section 66(1) of the Income-tax Act regarding the validity of the service of notice under section 22(2) of the Indian Income-tax Act, 1922. The notice was affixed through an inspector in the presence of witnesses after the assessee refused to accept it. Subsequently, an ex-parte assessment was made under section 23(4) as the assessee did not file a return despite appearing and taking adjournments. The assessee contended that the notice under section 22(2) was not issued in compliance with the provisions of Order 5 of the Code of Civil Procedure, rendering the proceedings void ab initio. The Tribunal upheld the annulment of the assessment due to non-compliance with the provisions of rule 19 of Order 5, Civil Procedure Code, as the serving officer was not examined on oath by the Income-tax Officer.
The Commissioner of Income-tax argued that the Tribunal erred in holding the notice invalid based on non-compliance with rule 19 of Order 5, as the assessee's case was about non-compliance under rule 20 of Order 5. It was contended that the provisions of rule 19 were not mandatory, and the non-examination of the serving officer on oath was merely an irregularity that did not invalidate the service of the notice. Additionally, it was argued that the assessment order could not be annulled as the assessee participated in the proceedings without challenging the validity of the notice under section 22(4).
The High Court clarified that the reference did not include questioning the validity of the assessment order or the effect of the assessee's appearance before the Income-tax Officer. The Tribunal had jurisdiction to consider whether the service of the notice under section 22(2) was valid, even if it was deemed to have been effected under rule 17 of Order 5. Analyzing the provisions of rule 19 of Order 5, the Court found that non-compliance with the rule, specifically regarding the verification of the return by an affidavit of the serving officer and the examination of the officer on oath, rendered the service of the notice invalid in law. As the process-server was not examined on oath and did not verify the return by an affidavit, the Tribunal's decision upholding the annulment of the assessment was deemed correct.
In conclusion, the Court answered the question referred in the affirmative, affirming the invalidity of the service of the notice under section 22(2) of the Income-tax Act. The assessee was awarded costs, assessed at Rs. 200, with counsel's fee set at the same amount.
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1971 (11) TMI 34
Estate Duty Act, 1953 - Whether, on the facts and in the circumstances of the case, the entire property held by the deceased was correctly included his estate as property passing or deemed to pass on his death for purposes of estate duty – question is answered in the negative in favour of the accountable persons and hold that only one-third of the family properties will be deemed to have passed on the death of Budhmal Dugar, deceased
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1971 (11) TMI 33
Trust – bearing the name of a private person - - income from the trust properties While determining nature of the trust, its object has to be looked into - assessability to tax - trusts created wholly for religious and charitable purposes and that they, therefore, attract the provisions of section 4(3)(i) of the Income-tax Act of 1922 and section 11 of the Income-tax Act of 1961 and also section 5(1)(i) of the Wealth-tax Act of 1957
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1971 (11) TMI 32
Assessee-firm - registration under section 185 of the Income-tax Act, 1961 – held that there must be a specification of share of profits as well as losses in the partnership deed - Tribunal is not correct in law in holding that the assessee-firm is entitled to registration
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1971 (11) TMI 31
Gift Tax - properties of testator were assigned to his wife by will to go ultimately to sons and the will prohibited alienation of business by wife - Whether, under the will the assessee is an executrix by implication or by tenor of the will – Whether the transfer of the said stationery business by the assessee to Kuriappan amounts to a valid gift for the lifetime of the assessee - If the gift is valid for the lifetime of the assessee, what is the nature of the interest gifted and how is it to be valued – held that assessee has by the gift conveyed her life interest in the properties comprised in the gift and in favour of Kuriappan – held that that the donee has secured only the life interest of the assessee in the properties gifted and the life interest of the assessee in the properties in the gift deed has alone to be valued for assessment to gift-tax
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1971 (11) TMI 30
Inclusion in net wealth - assessee had not admitted that the income found to have accrued due to him during the relative accounting periods for the assessment years 1957-58, 1958-59 and 1959-60 existed with him on any date in part or as a whole as his asset. There is no presumption as we indicated earlier that the whole of the income or any part of it continued as an asset of the assessee. There was no material whatever to indicate that there were any assets other than those disclosed in existence on the valuation dates - additions are not justified
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1971 (11) TMI 29
Mysore Agricultural Income Tax Act - failure to file Return - best judgment assessment - assessee does not file his return and does not avail of the opportunity to be heard - assessee had not raised any objection to the proposition notice, assessment was valid – held that, during pendency of application for cancellation of assessment, penalty for non-payment of tax could not be levied - order of penalty is invalid
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1971 (11) TMI 28
Assessee is having shares in Factory which was being assessed to income-tax as an association of persons - whether loss from the factory can be set off against assessee’s other income - whether she is entitled to the set-off claimed by her- held, yes, because, Income-tax is a single tax on the total income and not a collection of distinct taxes on income under various heads
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