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Showing 421 to 440 of 6467 Records
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2001 (12) TMI 26
Issues Involved:
1. Whether the sum of Rs.2.50 lakhs received by the assessee is taxable as a capital receipt or a revenue receipt.
2. Whether any part of the sum of Rs.2.50 lakhs is taxable as a revenue receipt.
Summary:
Issue 1: Taxability of Rs.2.50 Lakhs as Capital Receipt or Revenue Receipt
The assessee, a well-known paper technologist, entered into an agreement with Regal Papers Ltd. for the transfer of complete technology, including technical know-how, processes, and secret formulae for manufacturing high gloss cast-coated papers and boards. The Income-tax Officer treated the sum of Rs.2.50 lakhs received by the assessee as a revenue receipt and charged it to tax. However, the Appellate Assistant Commissioner and the Tribunal upheld that the amount was a capital receipt. The Tribunal stated, "The method adopted by the assessee was not a method of trading by which the assessee acquired a particular sum of money as part of the profits and gains of the trade."
The High Court, however, disagreed, noting that the agreement was for a period of five years, and the assessee did not absolutely part with the technical know-how. The court emphasized that the agreement included a negative covenant preventing the assessee from supplying the technology to others during the agreement period and required the assessee to render services to the company. The court concluded that the receipt should be treated as a revenue receipt, stating, "The agreement has to be read as a whole. So read, it is clear that there had been no absolute parting by the assessee with his technical know-how to the company."
Issue 2: Taxability of Part of Rs.2.50 Lakhs as Revenue Receipt
The court considered whether any part of the Rs.2.50 lakhs could be treated as a revenue receipt. The Revenue argued that the transfer of professional knowledge for five years did not constitute an absolute transfer and that the assessee's services were essentially hired for this period. The court agreed, noting that the consideration was received for imparting know-how not in association with the disposal of a capital asset. The court cited various precedents, including CIT v. Ciba of India Ltd. and CIT v. British India Corporation Ltd., to support its conclusion that the receipt should be treated as a revenue receipt.
Conclusion:
The High Court answered the questions in the negative, in favor of the Revenue and against the assessee, concluding that the sum of Rs.2.50 lakhs received by the assessee should be treated as a revenue receipt.
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2001 (12) TMI 25
Issues Involved:
1. Validity of the notice issued under Section 148 of the Income-tax Act, 1961.
2. Whether there was an omission or failure on the part of the petitioner to disclose fully and truly all material facts necessary for assessment.
3. Whether the payment of Rs. 17,500 per month was capital expenditure or interest.
Detailed Analysis:
1. Validity of the Notice Issued Under Section 148 of the Income-tax Act, 1961
The primary issue was whether the notice issued under Section 148 of the Income-tax Act, 1961, for reassessment was valid. The notice was challenged on the ground that there was no omission or failure on the part of the petitioner to disclose fully and truly all material facts necessary for assessment. The court noted that the reasons recorded for issuing the impugned notices were based on the interpretation of the High Court's order dated April 28, 1957, and the statement in the plaint. The court found that the petitioner had disclosed all relevant information and facts, including the interim order dated April 29, 1957, and the purchase of the premises subject to prior encumbrances. Therefore, the court held that the notice under Section 148 was without jurisdiction and invalid.
2. Omission or Failure to Disclose Fully and Truly All Material Facts
The court examined whether there was an omission or failure on the part of the petitioner to disclose fully and truly all material facts necessary for assessment. The Revenue contended that the petitioner had failed to disclose that the payment of Rs. 17,500 per month was not towards interest but towards the mortgage debt, which was capital expenditure. The court referred to the principles laid down in the case of Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC), which stated that the duty of disclosing primary facts relevant to the decision of the question before the assessing authority lies on the assessee. The court found that all primary facts were disclosed by the petitioner at the time of the original assessment, and there was no omission or failure on the part of the petitioner to disclose any material or relevant fact.
3. Nature of Payment: Capital Expenditure or Interest
The court also addressed the issue of whether the payment of Rs. 17,500 per month was capital expenditure or interest. The Revenue argued that the payment was towards the mortgage debt and hence capital expenditure, not interest. The court observed that the nature of the payment could not be ascertained from the interim order dated April 29, 1957, and it was only when the decree was passed in 1976 that the payment could be said to have been towards the principal claim of the bank. The court held that there was no question of the petitioner failing to disclose any fact or misrepresenting any fact at the time of assessment. The court concluded that the petitioner had disclosed fully and truly all material facts necessary for the assessment, and the Income-tax Officer had considered these facts in the original assessment.
Conclusion
The court found no merit in the Revenue's appeal and held that the learned judge was justified in allowing the writ petition and setting aside the impugned notice. The court affirmed the judgment and order under appeal, dismissed the appeal, and ruled in favor of the assessee. The court also disposed of related appeals and reference cases in favor of the assessee and against the Revenue, granting a stay of operation of the order for two months.
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2001 (12) TMI 24
Issues involved: Interpretation of Section 90 of the Kar Vivad Samadhan Scheme, 1998 regarding the time and manner of payment of tax arrears, and whether delay in payment can be condoned.
Summary:
The petitioner, an assessee assessed to income tax, sought to avail of the Kar Vivad Samadhan Scheme, 1998, which required payment within 30 days of communication of the amount due. The petitioner was informed of a liability of Rs.2,18,451 on December 10, 1998, with a payment deadline of January 9, 1999. Due to confusion, the petitioner made the payment on January 11, 1999, which was rejected by the respondent for being late.
The petitioner argued for a liberal interpretation of the scheme, citing judgments from various High Courts allowing for condonation of delays in similar schemes. The respondent contended that the scheme's provisions were clear and did not allow for any delay in payment.
The court considered the objectives of the scheme, noting that it aimed to benefit both the assessee and the revenue. It interpreted the word "shall" in the scheme as not being inflexible, allowing for genuine explanations for delays. The court found the petitioner's explanation for the delay reasonable and quashed the rejection order, directing the issuance of a clearance certificate under the scheme.
In conclusion, the court ruled in favor of the petitioner, emphasizing the need for a flexible interpretation of the scheme to accommodate genuine difficulties faced by assessees.
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2001 (12) TMI 23
Issues:
1. Appeal under section 269H of the Income-tax Act, 1961 regarding the acquisition of a property.
2. Discrepancies in property valuation between the official valuer and the approved valuer.
3. Evaluation of evidence by the Tribunal in determining the property value.
4. Consideration of the property's purchase price and subsequent valuation increase.
5. Lack of concrete evidence supporting the significant increase in property value in a short period.
Analysis:
1. The appeal was filed under section 269H of the Income-tax Act, 1961, concerning the acquisition of a property sold to the respondent for a higher value than previously assessed. The Revenue contested the Tribunal's decision, claiming it was not in line with the provisions of section 269C(2) of the Act.
2. The Tribunal analyzed the discrepancies in property valuation between the official valuer and the approved valuer. The official valuer assessed the market value significantly higher than the approved valuer, leading to a substantial difference in the property's overall value.
3. The Tribunal thoroughly evaluated the evidence presented by both parties, considering two conflicting evaluation reports. It scrutinized the valuation of the land and building, ultimately accepting the assessment made by the approved valuer based on "comparable sale instances."
4. Another crucial aspect was the consideration of the property's purchase price and subsequent valuation increase. The property was purchased for a lower amount in 1981 and sold for a higher value in 1983. The Tribunal questioned the significant jump in value within a short period, emphasizing the lack of concrete evidence supporting such a substantial increase.
5. The judgment highlighted the absence of evidence supporting the substantial increase in property value over a short period, especially considering the previous valuation and the lack of a reasonable explanation for the sharp rise in value. The Tribunal's decision was deemed reasonable and based on a thorough evaluation of the evidence, leading to the dismissal of the appeal under section 269H of the Act due to the lack of any legal infirmity warranting interference.
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2001 (12) TMI 22
Revision - By this petition, the petitioner challenges the order of the Commissioner of Income-tax, passed under section 264 of the Income-tax Act, 1961 - By the said order, the Commissioner of Income-tax has dismissed the revision application filed by the assessee both on the ground of maintainability as well as on the merits. - we are of the opinion that the revision application filed by the assessee under section 264 of the Income-tax Act was not maintainable. Once it is held that the appeal is not maintainable, there is no need to go into the merits of the case. However, it is made clear that if the petitioner chooses to pursue the remedy of appeal before the Income-tax Appellate Tribunal against the order of the Commissioner of Income-tax (Appeals), then the findings given by the Commissioner of Income-tax in the order under section 264 on the merits will not come in the way of the petitioner.
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2001 (12) TMI 21
Reassessment, Reason To Believe - we find that the Assessing Officer has in fact recorded reasons on August 31, 1999, for issuing notice under section 148(1). We may say that the reasons mentioned by him do not suffer from any infirmity. The belief entertained by the Assessing Officer is clearly based on reasons which have bearing on the matter. – Further, Sub-section (2) of section 148 clearly provides that the Assessing Officer shall, before issuing any notice thereunder record his reasons for doing so. We have already held above that the Assessing Officer has recorded necessary reasons in support of the belief. The question is whether an assessee can demand a copy of the Assessing Officer's reasons along with the notice. The proceedings in the back assessment begin only with the issue of notice under section 148. It is only after the service of notice, the assessee becomes a party to the proceedings. Consequently, the assessee is not entitled to get copy of the same at the stage of issuance of notice. In the result, the writ application deserves dismissal. We order accordingly.
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2001 (12) TMI 20
Capital Gains, Firm, Retirement Of Partner - "1. Whether on a proper construction of the deed of dissolution it could be held that it was a case of retirement of the partner and not of the dissolution of the firm? - 2. Whether, on the facts and in the circumstances of the case and in law the excess of Rs.3,62,631 received by the partner on the dissolution of the firm could be subject to assessment as income under the head 'Capital gain'?" - there cannot be any doubt whatsoever that whether it is held to be a case of dissolution of the partnership or as a retirement, having regard to the provisions contained in section 47(ii) of the Act as it stood prior to 1988, the assessee was entitled only to the assets, he derived from the partnership firm and not the excess amount. Thus, the aforementioned questions are answered in favour of the Revenue.
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2001 (12) TMI 19
Recovery Of Tax, Transfer To Defraud Revenue, Property Transfered To Trust By Assessee - It is claimed in the writ petition that the said Narayan Kishore Choudhury executed a deed of trust on May 18, 1972, concerning his shares in the premises, No. 2/2B, Harington Street, Calcutta, and appointed the present writ petitioners as the trustees thereof. It is contended that the Revenue acted erroneously in treating the said deed of trust as a revocable trust. It is, further, alleged that the Revenue was not entitled to initiate proceedings against the trustees to recover the dues from Narayan Prasad Choudhury. - The appeal is, dismissed
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2001 (12) TMI 18
Reassessment, Notice - taking into consideration the totality of the circumstances and the facts which have come on record, it is apparent that the respondent himself is not sure as to the year of taxability and whether the said item requires to be taxed in the assessment year 1991-92 or the assessment year 1992-93. In such a situation, it is not possible to agree with the stand of the Revenue that any income could be stated to have escaped the assessment for the assessment year 1991-92 as a consequence of any failure or omission on the part of the assessee. The petition is therefore allowed. The impugned notice dated October 3, 1997 (annexure R) is quashed and set aside
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2001 (12) TMI 17
Export, Special Deduction, Writ, Alternate Remedy - This is an application, inter alia, for issuance of a writ in the nature of mandamus commanding the respondents to withdraw, cancel, recall and rescind the impugned order of assessment passed by respondent No. 1 for the assessment year 1993-94 in refusing to allow the full deduction to the petitioners under section 80HHC and further writ in the nature of mandamus commanding respondent No. 2 to grant approval under section 80HHC(2)(a) of the said Act beyond six months to forbear from giving effect to the amendment in respect of section 80HHC(2)(a) with effect from June 1, 1999, by the Finance Act, 1999, and also to dispose of the application filed by the petitioner for extension of time for repatriation of balance export value beyond six months. - in my opinion, it would not be proper for me to pass any order on this application and on these facts this application must fail and is hereby dismissed.
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2001 (12) TMI 16
Salary, Perquisites, Rent-free Accommodation - "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the value of perquisite on account of residential house known as 'Modi Bhawan' was not assessable under section 28 read with section 2(24)(iv) of the Income-tax Act, 1961, but under section 17(2) of the Income-tax Act, 1961? - 2. Whether, on the facts and in the circumstances of the case, the method of assessing its value was correct in law and whether the Tribunal was justified in reducing it from the value assessed by the Appellate Commissioner?" These references are accordingly answered in favour of the assessee holding that the value of perquisite on account of residential house was not asses sable under section 28 read with section 2(24)(iv) of the Income-tax Act but under section 17(2) of the said Act and the Tribunal adopted the correct method of assessing its value.
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2001 (12) TMI 15
Total Income, Hindu Undivided Family - The question referred to us, viz., "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that income received by the assessee's wife for maintenance is includible in the assessee's total income under section 64(2)(c) read with section 64(1)(iv) of the Act?" is, answered in favour of the assessee and against the Revenue.
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2001 (12) TMI 14
Purchase Of Immovable Property By Central Government, Appropriate Authority - In this writ petition the petitioner has, inter alia, prayed for issuance of appropriate writ or writ of certiorari for quashing the letter whereby the petitioner herein was directed to deposit a sum of Rs.22,50,000 plus interest at 18 pet cent. from the date of receipt of the money till its deposit in the Government of India account. - After the dismissal of the appeal, the petitioners made representations for returning the possession of the property in question and asking them to accept the amount of sale consideration paid by the respondents without any interest. However, vide communication dated July 24, 2001, the respondents demanded interest on the amount of sale consideration paid by them to the petitioner under Chapter XX-C of the Income-tax Act. The petitioner challenged the demand of interest and it is for this reason the present petition is filed.
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2001 (12) TMI 13
The Commissioner has rightly stated that a broad view should be taken while deciding the question as to whether the gift is a deemed gift. It is only in cases where the difference in price is abnormal, the conclusion that the vendor has consciously given away to the buyer a valuable thing at a much lesser value only to favour the buyer can be reached, and the question of deemed gift would arise.
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2001 (12) TMI 12
Depreciation - Actual Cost - "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provision of Explanation 3 to section 43(1) applied to the facts of the case and that the assessee is not entitled to depreciation on the book value of assets of the earlier firm but only on the value as fixed by the Income-tax Officer under Explanation 3 to section 43(1) of the Income-tax Act 1961?" - Here the firm was dissolved within about 13 months of its formation. The two partners besides the assessee-company were also the only two shareholders and directors of the company. The reality before and after the dissolution was the same. The same person who enjoyed the benefits of the ownership of the assets and its uses continue to have such benefits, the two partners indirectly and the assessee itself directly. The findings recorded by the Tribunal in this background cannot be faulted. The question referred to us is therefore answered in favour of the Revenue and against the assessee.
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2001 (12) TMI 11
There is no merit in this appeal. The Tribunal has rightly held that the amounts paid towards provident fund and E.S.I. dues were amounts which were required to be deducted while computing the taxable income of the assessee. The amounts had been paid within the grace period provided under the relevant statutes. The appeal is dismissed.
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2001 (12) TMI 10
"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in holding that the liability of the assessee under the Employees Provident Fund Act had accrued to the assessee-company during the previous year and the assessee would be entitled to a deduction of Rs. 15,53,124?" - In view of the Supreme Court's decision in Kedarnath Jute Manufacturing Co. Ltd. v. CIT the deduction has to be allowed and hence the question is answered in favour of the assessee and against the Revenue.
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2001 (12) TMI 9
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing that the value of perquisite for residential accommodation be limited to Rs. 12,691? - 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in directing that the value of the perquisite in the shape of rent-free accommodation be limited to the value fixed by the prescribed authority under section 9 of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, for the assessment year 1971-72?" - held that when the property belonging to the company is allowed to be used by a director, then even though it may not be a case of letting out, the value of the rent-free accommodation has to be determined
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2001 (12) TMI 8
The question which has been raised in this appeal under section 260A is the interpretation of "royalty" as envisaged under Explanation 2 appended to section 9(1) of the Act. By reason of this Explanation which provides that the income specified therein shall be deemed to accrue or arise in India specifies six items which would come within the scope thereof. - None of the sub-clauses in Explanation 2 under section 9(1)(vi) would, in the circumstances of this case, be capable of being regarded as covering the design and engineering carried out by the supplier of the machinery abroad. There is no transfer or licence of any patent, invention, model or design. The design referred to in the contract is only the design of the equipment required to be manufactured by the supplier abroad and supplied to the purchaser. The information concerning the working of the machine is only incidental to the supply as the machinery was tailor-made for the buyers. Unless the buyer knows the way in which the machinery has been put together, the machinery cannot be maintained in the best possible way and repaired when occasion arises. No licence of any patent is involved. Sub-clause (vi) and also (vii) of section 9(1) would have no application as the design was only preliminary to the manufacture and integrally connected therewith - we are of the opinion that no substantial question of law arises for consideration in this appeal.
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2001 (12) TMI 7
Substantial question of law which may arise for consideration of this court would be as to whether the order passed by the Income-tax Appellate Tribunal is perverse in so far as it fails to take into consideration the relevant facts and based its decision on irrelevant factors not germane to the purpose of passing the said order. - we are, therefore, of the opinion that no question of law far less any substantial question of law arises for consideration in this appeal. We are further of the view that the learned Tribunal while passing the said order dated September 25, 2001, under section 254(2) having given sufficient cogent reasons, no interference thereof is called for.
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