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Case Laws
Showing 401 to 420 of 2810 Records
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1988 (11) TMI 65
The High Court of Bombay ruled that medical expenses reimbursed by the assessee to its employees should not be considered as 'perquisites' for tax purposes under section 40(a)(v) of the Income-tax Act, 1961. The decision was based on the court's previous ruling in CIT v. Indokem Pvt. Ltd. [1981] 132 ITR 125.
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1988 (11) TMI 64
The High Court of Bombay ruled that the donation of shares worth Rs. 2,50,000 to a trust cannot be taxed as deemed income under section 12(2) of the Income-tax Act, 1961. The judgment favored the assessee, citing a previous case.
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1988 (11) TMI 63
The High Court of Bombay ruled in favor of the assessee, stating that the amount received for transferring the goodwill of the business was not chargeable to tax under the head 'Capital gains'. The judgment was based on a previous Supreme Court ruling in CIT v. B. C. Srinivasa Setty [1981] 128 ITR 294.
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1988 (11) TMI 62
The High Court of Bombay ruled that an appeal does not lie against an order charging interest under section 139(1) of the Income-tax Act. The appeal by the assessee was deemed not competent, and the decision was upheld by the Tribunal. The court held that the challenge to the levy of interest did not meet the criteria for appeal as outlined in previous court decisions. The assessee was ordered to pay the costs of the Revenue.
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1988 (11) TMI 61
The High Court of Bombay held that the assessee-company was entitled to allowance of depreciation and development rebate on the acquisition of technical know-how documentations worth Rs. 50,000. The judgment was delivered by Judge S. P. Bharucha J. The decision was based on previous court judgments.
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1988 (11) TMI 60
The High Court of Bombay ruled that an appeal to the Appellate Assistant Commissioner against the levy of interest under section 139 of the Income-tax Act, 1961, is competent if the liability to be assessed to tax, including interest, is disputed. The appeal was found to be competent in this case, and the Department was ordered to pay the costs of the reference to the assessee. (Case citation: 1988 (11) TMI 60 - BOMBAY High Court)
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1988 (11) TMI 59
Issues:
1. Treatment of a specific sum as a reserve under the Companies (Profits) Surtax Act.
2. Determining the relevant date for capital computation under the Companies (Profits) Surtax Act.
Analysis:
Issue 1: Treatment of a specific sum as a reserve under the Companies (Profits) Surtax Act:
The case involved a dispute regarding whether a sum of Rs. 1,68,20,000 should be considered a reserve for the purpose of the Companies (Profits) Surtax Act. The Income-tax Officer initially rejected the claim, stating that the amount represented surplus compensation received during the nationalization of a bank. The Appellate Assistant Commissioner concurred, emphasizing that the amount did not meet the criteria of a reserve under the Companies Act. However, the Tribunal disagreed, deeming the sum as a reserve based on the circumstances of the case and commercial accountancy practices. The High Court, after referencing various Supreme Court decisions, upheld the Tribunal's decision, emphasizing that the substance of the matter must be considered. As the amount was not earmarked for any known liability and was left with the company post-nationalization, it qualified as a reserve in line with commercial accountancy principles.
Issue 2: Determining the relevant date for capital computation under the Companies (Profits) Surtax Act:
The second question pertained to the relevant date for capital computation under the Companies (Profits) Surtax Act. The Tribunal had considered the date of filing the return with the Registrar of Companies as the effective date, which the High Court affirmed based on Section 103(2) of the Companies Act. This decision was crucial in determining the capital of the company for surtax purposes.
In conclusion, the High Court ruled in favor of the assessee on both issues, affirming the Tribunal's decision. The judgment clarified the treatment of specific sums as reserves under the Companies (Profits) Surtax Act and the relevance of the date of filing returns for capital computation.
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1988 (11) TMI 58
The Bombay High Court ruled on the inclusion of 'Gratuity reserve' and 'Provision for taxation' in capital computation under the Super Profits Tax Act, 1963. The court directed the Tribunal to determine the excess of provisions over liabilities for these items based on the principles in a previous Supreme Court decision. The excess, if any, should be treated as reserves for capital computation. No costs were awarded. (Case citation: 1988 (11) TMI 58 - BOMBAY High Court)
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1988 (11) TMI 57
The High Court held that Ludhiana Co-operative Marketing Society Limited was not considered an "authority" under section 10(29) of the Income-tax Act, 1961. The Tribunal's decision was upheld, citing precedents and legislative intent. The reference was answered in favor of the Revenue.
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1988 (11) TMI 56
The High Court of Bombay ruled that the assessee is not entitled to interest on the refundable amount based on a Full Bench decision. The judgment was delivered by Judge S. P. Bharucha. No costs were awarded. (Case citation: 1988 (11) TMI 56 - BOMBAY High Court)
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1988 (11) TMI 55
The High Court ruled in favor of the assessee, Bhushan Industrial Co. (P.) Ltd., regarding deduction under section 80J of the Income-tax Act, 1961. The court held that the relief of 6% of the capital employed is intended for the full year and not proportionate to the period of machine use. The court cited previous judgments and circulars supporting this interpretation. The reference was answered in favor of the assessee, with no order as to costs.
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1988 (11) TMI 54
The High Court of Bombay upheld the decision allowing the assessee's claim for development rebate reserve and deduction, citing the judgment in Indian Oil Corporation Ltd. v. S. Rajagopalan, ITO [1973] 92 ITR 241. Both questions were answered in favor of the assessee. No costs were awarded. (Case citation: 1988 (11) TMI 54 - BOMBAY High Court)
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1988 (11) TMI 53
Issues:
1. Whether the share of profit of a deceased individual in partnership firms should be included in the assessment of the Hindu undivided family?
Analysis:
The case involved a dispute regarding the inclusion of the share of profit of a deceased individual in two partnership firms in the assessment of the Hindu undivided family. The deceased individual, a partner in the firms, left behind a widow and two minor sons. The widow became a partner in one firm, while the minor sons were admitted to the benefits of the other firm. The Income-tax Officer initially held that the income from the deceased's share in the firms belonged to the Hindu undivided family. However, the Tribunal ruled in favor of the assessee, stating that the property inherited by the widow and sons was separate and not part of the Hindu undivided family until it was impressed with that character during a specific assessment year.
The Tribunal's decision was based on Section 8 of the Hindu Succession Act, 1956, which treats the property inherited by legal heirs as separate unless impressed with the character of a Hindu undivided family. The Tribunal held that the widow impressing a specific amount with the character of joint Hindu family property formed the Hindu undivided family only for that assessment year. The Tribunal concluded that the share income of the widow and minor sons from the firms should not be included in the Hindu undivided family's total income.
The Department argued that the deceased's estate was not equally distributed among legal heirs, indicating the formation of a Hindu undivided family. However, the court rejected this argument, emphasizing that the deceased was a partner in the firms in his individual capacity, making the provisions of the Hindu Succession Act applicable. The court noted that the Department had previously accepted the individual assessments of the heirs for the share income from the firms, indicating their acknowledgment of the separate property status.
The court highlighted that the widow impressing a portion of the deceased's capital with the character of Hindu undivided family property did not automatically establish the existence of a Hindu undivided family. The court distinguished the case from a precedent where the deceased was a karta of the Hindu undivided family. Ultimately, the court ruled in favor of the assessee, stating that the deceased's share income should not be included in the Hindu undivided family's assessment.
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1988 (11) TMI 52
Issues:
1. Validity of the order passed by the Income-tax Officer under section 144B of the Income-tax Act, 1961.
2. Jurisdiction of the Commissioner of Income-tax under section 263 of the Act.
Analysis:
The judgment pertains to the assessment year 1973-74 and revolves around the order passed by the Income-tax Officer on April 7, 1976, under section 144B of the Income-tax Act, 1961. The Income-tax Officer determined the income of the assessee at Rs. 5,24,510, which was higher than the returned income of Rs. 2,77,264. The assessee did not file any objections to this order within the specified period, leading to the order being considered final. Subsequently, the assessee appealed to the Appellate Assistant Commissioner against this order (paragraph 3).
The Commissioner of Income-tax, Jullundur, issued notices under section 263 of the Act to the assessee, questioning the validity of the Income-tax Officer's order. Initially, the proceedings to cancel the Income-tax Officer's order were dropped as it was deemed a draft order. However, the Commissioner later issued another notice under section 263, leading to the cancellation of the Income-tax Officer's order on December 18, 1976 (paragraphs 4-6).
Upon appeal, the Tribunal held that the Commissioner had assumed jurisdiction under section 263 without establishing the necessary jurisdictional facts, leading to the cancellation of the Commissioner's order (paragraph 7).
The questions of law referred to the court focused on whether the Tribunal's decision was justified and whether the Commissioner's order under section 263 was sustainable. The court answered these questions in the affirmative, ruling in favor of the Revenue. The court emphasized that the erroneous order by the Income-tax Officer was indeed prejudicial to the Revenue's interests, meeting the prerequisites for the Commissioner's intervention under section 263. Therefore, the Tribunal's decision was deemed erroneous, and the reference was answered accordingly (paragraphs 8-9).
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1988 (11) TMI 51
Issues:
1. Jurisdiction of Income-tax Officer to levy penalty exceeding Rs. 1,000.
2. Applicability of section 274(2) of the Income-tax Act based on the date of filing the return.
Analysis:
The judgment pertains to a case where the Income-tax Officer added the cost of toria pledged by the assessee with a bank as income from undisclosed sources during assessment for the year 1970-71. Subsequently, penalty proceedings were initiated under section 271(1)(e) of the Income-tax Act, 1961. The Income-tax Officer levied a penalty exceeding Rs. 1,000, which was later canceled by the Income-tax Appellate Tribunal in Amritsar. The Tribunal based its decision on the law prevailing at the time of the return filing date, where the jurisdiction of the Income-tax Officer to levy penalty was limited to Rs. 1,000. The Tribunal referred two questions to the High Court for opinion: 1. Whether the law applicable for penalty proceedings should be based on the date of filing the return, and 2. Whether the Income-tax Officer had jurisdiction to levy the penalty exceeding Rs. 1,000.
The High Court, in its analysis, referred to previous decisions and held that the crucial date to determine jurisdiction is when the Income-tax Officer initiates penalty proceedings, not the date of filing the return. Citing earlier cases such as CIT v. Raman Industries and CIT v. Mela Ram Jagdish Raj and Co., the High Court emphasized that the date of initiation of penalty proceedings governs jurisdiction. Therefore, the High Court answered the first question in the negative, favoring the Revenue and against the assessee. However, due to the absence of crucial facts regarding the initiation of proceedings in the case documents, the High Court could not answer the second question. Consequently, the High Court directed the Tribunal to reconsider the matter in light of the clarified interpretation of the law regarding jurisdiction in penalty proceedings.
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1988 (11) TMI 50
The High Court of Punjab and Haryana ruled that the Inspecting Assistant Commissioner was not legally competent to pass the penalty order after April 1, 1976. The decision was based on previous judgments in similar cases. The reference was answered in favor of the Revenue and against the assessee, with no order as to costs.
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1988 (11) TMI 49
Issues: Assessment of undisclosed income, validity of estimating investment in house, addition of deposit amount.
Assessment of Undisclosed Income: The assessee constructed a house and disclosed sources of funds used for construction. The Income-tax Officer disallowed a contribution from the assessee's sons, treating it as income from undisclosed sources for a subsequent assessment year. The Appellate Assistant Commissioner ruled in favor of the assessee, stating that unexplained expenditure should be addressed in the year of construction. Subsequently, reassessment proceedings were initiated for the original assessment year under section 147(b) read with section 148 of the Income-tax Act.
Validity of Estimating Investment in House: The Valuation Officer assessed the market value of the house higher than the disclosed investment, leading to an addition in the assessee's income. The Appellate Assistant Commissioner allowed a benefit for incomplete amenities, reducing the cost of construction. The Tribunal held that the Income-tax Officer's de novo assessment and reliance on Wealth-tax Act provisions were invalid, as fair market value does not equate to actual investment.
Addition of Deposit Amount: Another disputed amount of Rs. 5,000 deposited in the name of the assessee's wife was added to the assessee's income. The Tribunal ruled that the Income-tax Officer erred in not seeking explanation from the relevant parties associated with the deposit, leading to the deletion of this addition.
Judgment: The Tribunal's decisions were upheld by the High Court, affirming that the Income-tax Officer's actions were not justified in estimating the investment and adding the deposit amount. The court emphasized the importance of proper assessment procedures and the necessity of seeking explanations from relevant parties. Both questions of law were answered in favor of the assessee, with no costs awarded.
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1988 (11) TMI 48
Issues:
1. Disallowance of proportionate expenditure under section 80P(2)(a) of the Income-tax Act.
2. Taxability of Rs. 25,000 subsidy received from Punjab State Co-operative Supply & Marketing Federation Ltd.
Analysis:
1. The Baghapurana Co-operative Marketing Society Ltd., an assessee under the Co-operative Societies Act, claimed deductions under section 80P(2)(a) of the Income-tax Act. The Tribunal disallowed proportionate expenditure, leading to the first issue. Citing a previous judgment in Punjab State Co-operative Supply and Marketing Federation Ltd. v. CIT [1981] 128 ITR 189, the court held in favor of the assessee, allowing the entire expenses as deductible under section 80P(2)(a).
2. The second issue revolved around whether the Rs. 25,000 subsidy received from MARKFED was a revenue or capital receipt. The Tribunal considered it a revenue receipt, making it taxable. The court analyzed the nature of the subsidy, applying the test of whether it recoups revenue expenditure or is a capital receipt. Relying on Bombay Steam Navigation Co. (1953) P. Ltd. v. CIT [1965] 56 ITR 52, the court emphasized that the onus is on the Department to prove the subsidy as a revenue receipt. In this case, the court found the subsidy to be of a capital nature, as it lacked a business connection and was received for purchasing shares, a capital investment. Therefore, the court held that the Rs. 25,000 subsidy was a capital receipt, not taxable as income.
In conclusion, the court ruled in favor of the assessee on both issues, allowing the proportionate expenditure deduction under section 80P(2)(a) and determining the Rs. 25,000 subsidy as a capital receipt, not subject to income tax.
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1988 (11) TMI 47
Issues: Surtax assessment for the years 1973-74, 1974-75, and 1975-76; Interpretation of rule 4 of the Second Schedule to the Companies (Profits) Surtax Act in relation to deductions under sections 80J and 80G of the Income-tax Act.
Analysis:
The case involved the assessment of surtax for three consecutive years. The assessee, Oswal Woollen Mills Limited, was assessed for surtax, and the computation of profits chargeable to surtax required the calculation of the company's capital as per the Second Schedule to the Companies (Profits) Surtax Act. The Income-tax Officer reduced the capital computed for the assessment years by applying a proportionate deduction under rule 4 due to deductions allowed under sections 80J and 80G of the Income-tax Act. The Officer held that the deductions under Chapter VIA of the Income-tax Act, including sections 80J and 80G, represent a part of income not included in the total income, thus necessitating a reduction in capital for surtax computation.
On appeal, the Appellate Assistant Commissioner sided with the assessee, following a judgment from the High Court of Karnataka. The Commissioner directed the Income-tax Officer to recompute the capital by excluding the proportionate deduction related to section 80J relief. The Tribunal upheld this decision, leading to the matter being referred to the High Court for opinion.
The High Court, considering the precedent set by the High Court of Karnataka in a similar case, ruled in favor of the assessee and against the Revenue. The Court agreed with the reasoning in the Karnataka judgment and also cited similar decisions from other High Courts. The Court held that the proportionate deduction on account of section 80J relief should be excluded from the computation of capital for surtax assessment, affirming the Tribunal's decision. The Court's ruling aligned with the interpretation of rule 4 of the Second Schedule to the Companies (Profits) Surtax Act in relation to deductions under sections 80J and 80G of the Income-tax Act.
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1988 (11) TMI 46
The High Court held that the Tribunal was right in canceling the penalty imposed on the assessee under section 271(1)(c) of the Income-tax Act. The Tribunal accepted the explanations provided by the assessee regarding additions made during assessment proceedings, leading to the cancellation of the penalty. The court referred to the Supreme Court's ruling in CIT v. Mussadilal Ram Bharose [1987] 165 ITR 14 to support its decision.
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