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1984 (6) TMI 126
... ... ... ... ..... act invested the circumstance that Smt. Manorama denied having lent the money to Smt. Suman became unimportant. As far as the real source of the money is concerned, it remains a matter of suspicion only that it might have come from the assessee s husband. There is not rule of law debarring a wife from starting a business by obtaining funds from her husband. At the most the income from such money could be taxed in the hands of the husband under s. 64. That would, however, not make the wife a benamidar of the husband. There is no material whatsoever to show that Ratankumar was actually managing the affairs of the firm. We are, therefore of the opinion that there was no sufficient material to find that the assessee-firm was not a genuine from and, in our view, registration should have been granted to the assessee. We, therefore, allow this appeal and grant registration to the appellant for asst. yr. 1980-81 and direct the ITO to take further action in accordance with this order.
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1984 (6) TMI 125
... ... ... ... ..... ingh Engineering Works Pvt. Ltd. 1978 CTR (All) 201 (1979) 119 ITR 891 (All) at 894 as well as the meaning of the word produced noticed in the decision in the case of AIR 1969 SC 930 at 931. In view of this, we allow the appeal of the assessee and the ITO will revise the assessment accordingly. The ld. counsel appearing for the assessee also brought to our notice a judgment of the Supreme Court in the case of State of Karnataka vs. B. Raghurama Shetty (1981) 47 STC 396 (SC) wherein the Supreme Court held that paddy and rice are two distinct commodities and the milling of paddy involves a manufacturing process. By respectfully following the above said judgment of the Supreme Court, as also the order of the Tribunal, we hold that the assessee is a manufacturing concern entitled to relief under s. 32A of the IT Act. Accordingly, we direct the ITO to revise the assessment and give necessary relief to the assessee. 7. In the result, the appeal filed by the Department is dismissed.
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1984 (6) TMI 124
Deemed Gift ... ... ... ... ..... ift. In this case, there is no dispute as to the value of the properties received by the sons. The value is Rs. 1,26,781. As for the right of the sons, they were aged only 20 and 19 at the relevant time. The GTO in the original assessment had found that the sons had worked for four and three years, respectively. The assessee had claimed salary of Rs. 500 per month on average so that the total claim would be Rs. 42,000. The GTO, however, was of the view that the amounts of Rs. 12,000 and Rs. 8,000 aggregating to Rs. 20,000 would represent the value of such right. We are of the view that an average of Rs. 300 per month in the case of each of the sons for the entire period can be treated as a reasonable remuneration. This would mean that the amount eligible for deduction would be Rs. 25,200 as against Rs. 20,000 in the original assessment. Needless to say that the assessee will be further eligible for the basic exemption. 10. In the result, the appeal is partly allowed as above.
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1984 (6) TMI 123
Substantially Interested ... ... ... ... ..... lso to be presented to a general meeting under section 497 of the Companies Act. Hence, there is no justification for the confusion as between the position of the shareholders and the liquidator. The learned departmental representative placed great reliance on the decision of the Bombay High Court in the case of Indian Hotels Ltd. for the proposition that even a public trustee is treated as a single shareholder. However, the facts, in our opinion, are clearly distinguishable. In that case, the public trustee held the shares and was, in law, owner thereof. Liquidator is a mere holder of office, being accountable to the shareholders in a general meeting. It cannot be said that he is a single individual controlling the affairs of the company merely because he happens to administer such affairs on behalf of the shareholders and creditors. 6. In the result, the appeals are allowed. The assessee will be entitled to be taxed as a company in which public are substantially interested.
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1984 (6) TMI 122
Deemed Income ... ... ... ... ..... under a hundi through a demand draft would change the desired effect sought to be brought about by the Legislature by enacting section 69D. Once the demand draft is purchased and it is despatched to the drawer of the hundi it cannot even be countermanded. The fact that the demand draft was drawn through one bank over the other does not in any way affect the genuineness of the payment. Therefore, as far as the payment to the drawer of the hundi is concerned, the account payee cheque as well as the demand draft would be all of the same effect. To put it more correctly the demand draft is more efficacious than the account payee cheque inasmuch as the latter is liable to be countermanded whereas the former cannot be. Under the circumstances, we feel that the requirements of section 69D are fulfilled in this case and we order that the ITO should delete the addition of Rs. 11, 600 from the total income of the assessee. 5. The appeal is, therefore, allowed to the extent noted above.
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1984 (6) TMI 121
Best Judgment Assessment ... ... ... ... ..... be exercised so as to make a proper and fair best judgment assessment and not so as to nullify the provisions of section 146 and the appeal provided under section 246(d). That is the extent and that is the limitation. Keeping in view the aforesaid observations, we consider that the proper order to be passed would be one setting aside the quantum of income as computed and directing the ITO to recompute the total income having due regard to the books of account maintained by the assessee as well as other documents which the assessee may produce as also any evidence which the ITO may require. Of course, since the assessment under section 144 stands, what the ITO would make would be only a recomputation of the income in a proper and fair manner and to the best of his judgment and having due regard to the material evidence to which we have referred, which is necessary for making such an assessment and which is available. 6. The result is, the appeal is treated as allowed in part.
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1984 (6) TMI 120
... ... ... ... ..... efund of wealth-tax paid under the VD Act, how was he able to adjust it at first instance ? Apparently, section 15(7) is his authority. If he could adjust it at first instance, he can certainly refund it if such adjusted tax is found not payable. If he did not wish to refund any tax, all he had to do was to refrain from making any assessment. Having chosen to make an assessment and having adjusted the tax against a demand, there is no means of appropriating the tax so adjusted in case the demand is reduced or cancelled in further appeal. The fact that the WTO did actually issue the refund subsequently also shows that there was no administrative or other bar for issue of such refund. Having issued the refund, it is possible for the revenue to get it back when the demand, against which it was originally adjusted, no longer survives ? Can there be a collection back of an amount against a non-existent demand ? These appear to be further hurdles in the way of departmental appeals.
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1984 (6) TMI 119
Sale Proceeds ... ... ... ... ..... ed, that by itself would not be sufficient to hold that there was an AOP. 8. Apart from the factual finding arrived at by us, which is on the material already on record, we have to agree with the assessee that inasmuch as one of the members was assessed earlier in respect of share income and full facts were set out, the ITO was precluded for making an assessment on the AOP. Authority for this proposition is the decision of the Andhra Pradesh High Court in the case of Ch. Atchaiah v. ITO 1979 116 ITR 675. The learned departmental representative submitted that there is a contrary decision of the Delhi High Court in the case of Punjab Cloth Stores v. CIT 1980 121 ITR 604. We are bound by the decision of the Andhra Pradesh High Court as far as the prohibition to make an assessment on the AOP is concerned, when an assessment has been made on one of the members earlier. Therefore, the revenue cannot succeed on this point. 9. The result is, the appeal of the department is dismissed.
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1984 (6) TMI 118
Expenditure Incurred ... ... ... ... ..... ew trends or advancements in law and thereby widen his horizon while he attended the conferences. Therefore, the primary purpose of the foreign tour of the assessee in this case was only to gain more knowledge and education and to equip himself in finer points of law in the fields in which he is practising with a view to handle his cases more efficiently and successfully than before as well as for fulfilling the true role expected of an advocate. From the foregoing, we are definitely of the opinion that the lower authorities went wrong in disallowing Rs. 31,400 spent on the foreign tour. As the assessee himself admitted that an amount of Rs. 2,975 is incurred towards his personal expenses during his foreign tour, we hold that the said amount is the only item of disallowable expenditure and the balance, viz., Rs. 31,400 minus Rs. 2,975, should be allowed as legitimate business expenditure under section 37(1). 27. In the result, to the extent noted above, the appeal is allowed.
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1984 (6) TMI 117
... ... ... ... ..... ties below for our consideration. We have also perused the orders of the Tribunal relied on by the assessee. The ITO has noted the fact that even for the earlier year return was filed on 30th Dec., 1978 on the reasons, which the ITO did not find acceptable. The Tribunal has opined, in the similar situation, the accounts of the earlier year were finalised. The assessee consequently could not finalise the accounts of the following year. That apart, the assessee in the present case has also filed the return on 30th Dec., 1978 for the year under appeal. In these circumstances, we are of the opinion that the assessee has not acted deliberately in non-filing of the return in time. On the facts of the case, we are of the view that the delay in filing of the return for the year under appeal was due to reasonable cause and no penalty under s. 271(1)(a) was called for. The order of the authorities below on the point is cancelled. 7. In the result, the appeal by the assessee is allowed.
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1984 (6) TMI 116
... ... ... ... ..... the clients of the assessee gave false statement before the ITO. Normally any statement of the assessee is to be considered as correct unless there is some material to the contrary. But we find no such fact on record. On a consideration of a entirety of the circumstances, we are of the opinion that there was no material on record to conclusively prove that the assessee was paid Rs. 4,30,000 on 5th Dec., 1972 as his remuneration for conducting the land acquisition cases of M/s Sonapur Tea Co. (P) Ltd. through its managing director Shri A. S. Bhaduri. We are further of the opinion that the assessee could be said to have explained the nature and source of bank deposit of Rs. 3,05,000 made on 5th Dec., 1972. We, therefore, direct that the addition of Rs. 4,30,000 be deleted. In view of that we have discussed above the cross-objections filed by the Revenue fail. In the result, the appeal filed by assessee is partly allowed and the cross-objection filed by the Revenue is dismissed.
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1984 (6) TMI 115
... ... ... ... ..... rives by letting it out but would also embrace within itself an eventuality of saving by using the property as self-residence. According to us that law thus laid down by Hon rsquo ble Supreme Court of India, in fact supports the view that we have taken. When an owner of a house property occupies it for its self residence, it can be said that he is saving by using the property himself. But it could not mean that an assessee who is in receipt of house rent allowance but who does not incur any expenditure by way of rent as he resides in his own house is actually incurring any expenditure by way of rent. 9. In conclusion we would accept the view of the assessing authority that the HRA of Rs. 4,800 received by the assessee who was not actually incurring any expenditure by way of rent and who was residig in his own house was not entitled to exemption under s. 10(13A) r/w r. 2A. The order passed by the CIT(A) is, therefore, reversed and the appeal filed by the Department is allowed.
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1984 (6) TMI 114
Account Books, Assessment Year, Income Tax Return, Late Filing, Reasonable Cause, Revised Return, Wealth Tax Return
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1984 (6) TMI 113
Cash Credits, Levy Of Penalty, Penalty Proceedings ... ... ... ... ..... eedings the assessee failed to prove that on the existing material itself the presumption raised by the Explanation stands rebutted. We are also of the view that the present case is not the one where the explanation of the assessee was rejected or where the assessee failed to prove the genuineness of the cash credits, but in the present case there are definite evidence on record as discussed above to prove that the assessee made false entries in the books of account for the purpose of concealing the income. The whole theory of advancing the loan by the creditor is bogus. In substance the creditor never advanced the loan to the assessee and the assessee has been perpetuating a story which has no legs to stand. So the present case is really covered by the ratio of the decision of the case of D.M. Manasvi. 22. For the reasons discussed above, there is no substance in this appeal. 23. No other point was pressed before us. In the result, the appeal fails and the same is dismissed.
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1984 (6) TMI 112
Penalty For Late Filing Of Return ... ... ... ... ..... erence is not there, no penalty would have been leviable. The law need not be interpreted in a way which can create such anomalies. 10. The consensus of judicial opinion is, therefore, in favour of upholding penalties where penalty is found imposable on a firm and the tax payable by the unregistered firm is more than the tax paid in advance. In view of this, the order of the AAC cannot be upheld. 11. Having said so, we must further hold that it was necessary for the AAC to give a finding whether he was satisfied that there was a case for imposition of penalty and whether there was no reasonable cause for the delay in this case. As there is no clear finding on this point, the matter is restored to his file. In case he finds the penalty leviable, the penalty may be calculated in accordance with law after taking into consideration the reduced total income. 12. As the matter is being restored to the file of the AAC, the appeal shall be treated as allowed for statistical purposes.
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1984 (6) TMI 111
Industrial Undertaking In Backward Area, Investment Allowance, Profits And Gains, Relief In Respect
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1984 (6) TMI 110
... ... ... ... ..... e deletion of he addition made to the total income on account of unexplained investment. 3. The revenue is aggrieved and has come up in appeal before us. After hearing Shri A.K. Chakraborty, ld. senior departmental representative and Shri B.L. Mittal, ld. counsel of the assessee we see no reason to interfere with the order of the AAC. The assessee in this case had been dealing in high denomination notes in the earlier years also. From the certificate furnished by the Asaf Ali Road Branch of the Grindlays Bank Ltd., the assessee deposited Rs. 18,000 high denomination notes on19th July, 1976. It is, therefore, not unusual for the assessee to be in possession of high denomination notes and it is but natural that he should declare when those high denomination notes were demonetised in Jan., 1978. Having regard to the facts and circumstances of hte case we are of the view that the addition was rightly deleted by the AAC. His order is accordingly upheld. 4. The appeal is dismissed.
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1984 (6) TMI 109
... ... ... ... ..... der s. 139(8), 215 and 216 of the Act. On the facts and in the circumstances of the case, provisions of statutory Rule 40, 117A and 116A should have been complied with. This issue merits to be decided afresh. We hold accordingly. Ratio of the decision of the Hon ble Delhi High Court in CIT vs. Mahabir Prashad and Sons (1980) 17 CTR (Del) 161 (1980) 125 ITR 165 (Del) as also that of the Hon ble Allahabad High Court in CIT vs. Elgin Mills Co. Ltd. (1980) 123 ITR 712 (All) are to be kept in mind. The ITO is directed accordingly, more so, in the face of the fact that the assessee had got substantial relief in quantum. However, on our part, and for us, this becomes academic in nature since we have allowed ground Nos. 2 and 3 by the assessee and accordingly do hold that the assessment order was a nullity and the orders of the lower authorities stand cancelled. The assessment having been held to be a nullity and void ab initio, the appeal by the assessee succeeds and stands allowed.
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1984 (6) TMI 108
House Rent Allowance ... ... ... ... ..... d also embrace within itself an eventuality of saving by using the property as self-residence. According to us the law thus laid down by Hon ble Supreme Court in fact, supports the view that we have taken. When an owner of a house property occupies it for its self-residence, it can be said that he is saving by using the property himself. But it could not mean that an assessee who is in receipt of house rent allowance but who does not incur any expenditure by way of rent as he resides in his own house is actually incurring any expenditure by way of rent. 9. In conclusion we would accept the view of the assessing authority that the house rent allowance of Rs. 4,800 received by the assessee who was not actually incurring any expenditure by way of rent and who was residing in his own house was not entitled to exemption under section 10(13A), read with rule 2A. The order passed by the Commissioner (Appeals) is, therefore, reversed and the appeal filed by the department is allowed.
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1984 (6) TMI 107
Assessment Order, Assessment Year ... ... ... ... ..... year of the assessee s business. We are, therefore, of the opinion that so far as the penalty proceedings are concerned, the income-tax authorities were unduly influenced by the factors enumerated earlier in this order for which bona fide explanation had been tendered by the assessee. Looking to the totality of the facts and circumstances of the case, therefore, we are of the view that the explanation offered by the assessee in terms of the proviso to Explanation 1 of section 271(1)(c) was bona fide and that all the facts relating to the same and material to the computation of its total income had been disclosed by it and, therefore, the presumption of concealment of income had been duly rebutted. Therefore, it was not a case in which any penalty could have been imposed or sustained against the assessee. We hold accordingly. 11. The appeal is allowed and the penalty of Rs. 1,24,721 is cancelled. The stay petition filed by the assessee, having become infructuous, is dismissed.
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