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1982 (12) TMI 81 - ITAT HYDERABAD-A
Backward Area, Profits And Gains ... ... ... ... ..... vided to the ITO to entertain any communication in Form No. 12A which is belated, i.e., which is not in accordance with rule 24A. In our opinion, this part of the order or the decision of the ITO is against the law and the ratio of the above said authorities. 4. In our opinion, the ITO should have granted permission to the ITO to file Form No. 12A as requested in the assessee s letter dated 24-9-1979 especially when the said letter was addressed very much ahead of the completion of the assessment on 29-11-1979. By refusing, such request the ITO, in our opinion, refused to exercise the lawful jurisdiction vested in him and by his refusal the legal right of the assessee-firm was affected. 5. Therefore, we set aside both the orders of the lower authorities and direct the ITO to give fair chance to the assessee-firm to file Form No. 12A according to the request dated 24-9-1979 and decide the question of registration to the assessee-firm according to law. 6. The appeal is allowed.
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1982 (12) TMI 80 - ITAT HYDERABAD-A
Powers To Tax, Rate Purpose, Relief From Double Taxation ... ... ... ... ..... e section does not require that the money should be brought along with the assessee. Obviously, because of foreign exchange remittance regulations, etc., transmission of amounts from a foreign country may take some time. As we have already stated, the period of exemption is to be calculated in terms of the proviso with reference to the date on which the person returned to India and there are no other restrictions. We, therefore, come to the conclusion that the WTO was not in error in allowing the exemption since the only case of the revenue is that the assessee had returned prior to 1-4-1976 and further the amounts were remitted only later and were not brought with the assessee, and it is not the case of the revenue that any of the other requirements of section 5(1)(xxxiii) were not satisfied. We, therefore, set aside the order of the Commissioner for each of the assessment years under consideration and restore the orders of the WTO. 6. The result is, the appeals are allowed.
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1982 (12) TMI 79 - ITAT DELHI-D
... ... ... ... ..... . 7. The above reasoning is also based on conjectures and surmises and not on any material on record. It is not understood as to how the assessee has to incur expenses on stamp duty, etc., etc. The addition made and sustained on the above is also knocked off, since there is no reason and warrant for sustaining the same. On this issue also the assessee succeeds. 8. As regards charging of interest u/s 217 of the Act, the assessment order is silent and we leave it on that. If any interest is chargeable, the assessee should have been heard on the issue. The assessee claimed before us through his learned counsel that he has already paid advance-tax at Rs. 14,400 while the tax payable works out to Rs. 13,860. The ITO is directed to look into this aspect of the issue viz. Charging of interest u/s 217 of the Act and if any interest is to be charged, the assessee will be afforded a proper opportunity of explaining his case. 9. In the net result, the appeal succeeds and stands allowed.
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1982 (12) TMI 78 - ITAT DELHI-D
Bona Fide, Income Tax ... ... ... ... ..... ot mentioned anything about this judgment. All that has been held in that case is that even a case where the ITO starts investigation by laying upon what was concealed or hidden, would be covered in a case of detection within the meaning of that word. The facts of that case are entirely different and that judgment has no application to the facts of the present case. When the assessee had himself filed revised income-tax returns for the assessment year 1974-75 and revised wealth-tax return for the assessment year 1973-74 on6-11-1975, how could there be any scope for detection of the foreign deposit, which was disclosed in the revised return. On a consideration of the entirety of the circumstances of this case, I have no hesitation in coming to the conclusion, and agreeing with the learned Accountant Member, that penalty under section 18(1)(c) is not exigible in this case. 12. The case will now go back to the Delhi Bench B for passing an order according to the majority opinion.
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1982 (12) TMI 77 - ITAT DELHI-D
Levy Of Penalty, Tribunal's Order ... ... ... ... ..... ome for the assessment year 1967-68, tax would be levied for the assessment year 1967-68 (according to the assessee, the tax on this figure worked out to Rs. 63,474) and in addition to certain penalties agreed to be imposed for the assessment years 1967-68 to 1972-73, there would be further penalties of Rs. 85,919 for each of the three years under consideration. Considered from any angle, I am in entire agreement with the order of the learned Accountant Member. 32. The learned departmental representative had raised a point that the learned Judicial Member had not heard the revenue on merits and, therefore, a fresh hearing should be given by the Bench. I am afraid, there is no provision in the Act for giving such a hearing after the case has been referred to the Third Member and the Third Member had expressed an opinion. 33. The case will go back to the Jaipur Bench of the Tribunal, which originally heard these appeals, for deciding the appeals, according to the majority view.
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1982 (12) TMI 76 - ITAT DELHI-B
Any Activity For Profit, Assessment Year, General Public Utility, High Court, Insurance Business
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1982 (12) TMI 75 - ITAT DELHI-A
Borrowed Capital, Deemed Dividend ... ... ... ... ..... own shares from erstwhile shareholders or was some kind of compensation for non-payment of dividend for the year 1973 or up to the period, when the payment of Rs. 40 per share was made. It is extremely difficult to accept the submission that after a period of only 13 days, the erstwhile shareholders who became entitled to receive Rs. 40 per share on 30-1-1974 became entitled to receive interest of 80 paise per share. The board of directors passed the resolution on 13-2-1974 authorising payment of 80 paise per share and it is on that date a debt was created in favour of the erstwhile shareholders. No other date is material for the consideration of the issue before us. Thus, from whatever angle we look at this amount of Rs. 9,58,969, we are of the firm opinion that this amount cannot be allowed as a revenue expenditure in this year. On this point, we vacate the order of the Commissioner (Appeals) and restore the order of the ITO. 23. In the result, the appeal is partly allowed.
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1982 (12) TMI 74 - ITAT DELHI-A
Agricultural Land, Capital Asset, Capital Gains Tax, Land Whether Agricultural ... ... ... ... ..... purview of section 2(14)(iii)(a) in the case before us, we need not go to the extent of holding that all agricultural lands even though in urban area cannot be brought out of the provisions of section 2(14)(iii) and it is, therefore, unnecessary to dilate such on the decision of the Bombay High Court. 16. For all the above reasons, we hold that the provisions of section 2(14)(iii)(a) are not applicable to the rural areas of Union territory of Delhi and Nangal Dewat being a part of the rural area, the agricultural lands therein are outside the definition of capital asset. The capital gains, therefore, cannot be charged on the surplus arising out of the transfer of the lands in the village Nangal Dewat. The order of the Commissioner (Appeals) is accordingly upheld. 17. In view of the above other points, do not survive for consideration. The cross-objection is merely supporting the view taken by the Commissioner (Appeals). 18. The appeals and the cross-objections are dismissed.
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1982 (12) TMI 73 - ITAT DELHI-A
Assessment Order ... ... ... ... ..... t mean that the case is covered by the provisions of section 271(1)(c) so that the time limit for completing the assessment would be eight years. A similar argument advanced before the Cochin Bench in the case of N. Krishnan has been rejected and in my opinion rightly. 11. I may lastly point out that even the Board has issued instructions to the departmental officers not to take proceedings under section 144A during the pendency of section 144B proceedings. This is clear from Board s Circular No. 201/21/1976-IT(A-II), dated 29-4-1978. 12. Before concluding I may have to state that Shri Harihar Lai did not pursue the second point referred to by the Bench by its order dated 7-7-1972 and hence the point is answered against the assessee and therefore the view of the Judicial Member prevails. 13. Accordingly, I agree with the view expressed by the learned Accountant Member so far as the first point is concerned. The case will now go back to the Bench for disposal according to law.
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1982 (12) TMI 72 - ITAT COCHIN
... ... ... ... ..... ompany since the bulk of the processing of the assessee s goods was got done by outside agencies. The ITO has stated in negativing the assessees claim that a similar issue was pending before the Tribunal in the earlier asst. yrs. We find that this issue had come up before the Tribunal for the asst. yr. 1972-73 in I.T.A. No. 326 (Coch) 77-78 dt. 31st March 1980. The Tribunal in that year with reference to the provisions of s2(7)(c) of the Finance Act, 1972, had examined the facts and come to the conclusion that the assessee was an industrial company. The provisions of s. 2(7)(c) of the Finance year are similar and, therefore, the same decision would hold good for this year also, the nature of the operations carried on by the, assessee company being similar. We are. therefore, unable to accept the contention of revenue that the assessee is not an industrial company. 13. The result is that the appeal of the assessee is allowed in part and the appeal of the revenue is dismissed.
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1982 (12) TMI 71 - ITAT COCHIN
... ... ... ... ..... provisions of s. 64(i)(iii) read as under 64 (1) In computing the total income of any individual, there shall be included all sucn income as arise directly or indirectly (iii) to a minor child of such individual for the admission of the minor to the benefits of partnership in a firm. The prerequisite for aggregation u/s. 61(1)(iii) is that the income should have arisen consequent on the admission of the benefits of partnership in the firm. Interest received on loans given by a minor is contradistinct from capital contributed in terms of the deed itself cannot be considered as arising directly or indirectly from the admission of the minor to the benefits of partnership unlike capital supplied. We are, therefore, of the view that the judgement relied on by the learned departmental representative in the case of CIT vs. R.M. Chidambaram Pillai 1977 CTR (SC) 71 (1977) 106 ITR 292 (SC) would not support the stand of the revenue. 8. The result is that the appeal is allowed in part.
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1982 (12) TMI 70 - ITAT COCHIN
... ... ... ... ..... ilised for agricultural purposes. Though there are buildings and drying yard there had been evidence of topioca cultivation in the property. It may be that the property had been changing hands under successive transfers and the extensive vacant land that the assessee got possession under a sale deed of 1973 had been put to agricultural use after the preliminary agricultural operations. The land had not been lying idle at the time it was transferred by the assessee. The actual user ordinarily furnishes prima facie evidence of the nature and character of the land. Admitted it is situate 15 kms. away from the municipal limits. The facts stated by the CIT (A) cannot be assailed especially in the light of the assessment proceedings against the assessee by the Agricultural Income-tax Authorities. We do not, therefore, consider that there is any merit in the contention advanced on behalf of the revenue. The appeal deserves to be dismissed. 4. In the result, the appeal is dismissed.
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1982 (12) TMI 69 - ITAT COCHIN
Chargeable To Tax, Cost Of Improvement, Partner In Firm, Share In Firm ... ... ... ... ..... ions or alterations thereto, the charging section is not attracted, as held in E. C. Jacob s case. The Bombay High Court in the case of Evans Fraser Co. Ltd. also upheld the same view. It was a case of a subsequent transfer of the goodwill originally acquired. The Court held that the income chargeable to capital gains tax has to be computed by deducting from the full value of the consideration, the cost of acquisition of the capital asset and the cost of any improvement thereto and where the cost of improvement of goodwill cannot be ascertained gains arising on its transfer would not be liable to tax. Applying the ratio of these decisions here, we would hold that the gain that arose to the assessee on the transfer of the goodwill is not subject to the charge of capital gains tax. We, therefore, delete the addition of Rs. 3,242 from the computation of the total income. 10. This para is not reproduced here as it involves a minor issue . 11. In the result, the appeal is allowed.
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1982 (12) TMI 68 - ITAT COCHIN
Expenditure Incurred, Foreign Exchange Regulation Act, Revenue Expenditure ... ... ... ... ..... te any new asset or was incurred for maintaining the business of the company. If it is the former it is the capital expenditure if it is the latter, it is the revenue expenditure. 14. In the present case, unless the assessee had diluted the shareholdings by foreigners to the requisite percentage, the assessee would have not been able to carry on the business which it had been hitherto carrying on. The payments, therefore, were in the course of the business to enable the assessee-company to continue carrying on the business. The payments did not arise out of any transfer of the business. The expenditure was incurred to protect the business of the assessee, that is, to enable it to continue carrying on the business which hitherto it was carrying on. Having regard to the observations of the Supreme Court which we have set out, it is clear that the expenditure in question is an admissible expenditure. 15. We, therefore, direct allowance of Rs. 1,38,520 as an admissible deduction.
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1982 (12) TMI 67 - ITAT COCHIN
In Part, Partnership Deed ... ... ... ... ..... nt itself. The firm was granted registration right from the assessment year 1972-73 onwards. There has been no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which registration was originally granted. That being the case, the declaration in Form No. 12 having been filed within the prescribed time, all the requirements of section 184(7) in the present case were satisfied and it was not open to the ITO to decline to grant continuation of registration. Therefore, we hold that the ITO acted in excess of his powers under section 184(7) in declining to grant continuation of the registration to the assessee-firm because registration stood allowed to it already from the assessment year 1972-73 onwards till 1979-80. 14. The result is that the appeals of the revenue in IT Appeal Nos. 605 and 607 (Coch.) of 1982 stand dismissed. 15 to 19. These paras are not reproduced here as they involve minor issues.
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1982 (12) TMI 66 - ITAT COCHIN
In Part, Minor Child, Partnership Deed ... ... ... ... ..... of partnership. The provisions of section 64(1)(iii) read as under 64. (1) In computing the total income of any individual, there shall be included all such income as arise directly or indirectly--- (iii) to a minor child of such individual from the admission of the minor to the benefits of partnership in a firm The prerequisite for aggregation under section 64(1)(iii) is that the income should have arisen consequent on the admission of the minor to the benefits of partnership in the firm. Interest received on loans given by a minor as contradistinct from capital contributed in terms of the deed itself cannot be considered as arising directly or indirectly from the admission of the minors to the benefits of partnership unlike capital supply. We are, therefore, of the view that the judgment relied on by the learned departmental representative in the case of R.M. Chidambaram Pillai would not support the stand of the revenue. 8. The result is that the appeal is allowed in part.
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1982 (12) TMI 65 - ITAT CHANDIG-ARH
... ... ... ... ..... the issue is not free from debate. It was not only in correct perusal of Fifth Schedule which made ITO to allow particular percentage of development rebate which he modified subsequently after looking to the fact that the said material produced or manufactured by the assessee did not find place in the said Schedule but something more when he computed development rebate, as headed. It was not a patent mistake and could not, therefore, be rectified, according to us. In the light of the above discussion, we don t agree with the reasons given in the order of the AAC, his action is, therefore, reversed. From the above finding, extracted from our own order, it is apparent that the issue involves an interpretation of law and audit objection is in respect of this. The objection being in respect of interpretation of law, could not legitimately be made the basis for s. 147(b) proceedings. The assessee s contentions, therefore, are accepted. 7. In the result, both appeals are allowed.
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1982 (12) TMI 64 - ITAT CALCUTTA-E
Tax At Source ... ... ... ... ..... ber, 1979. Such credit will, of course, affect the computation of income for the accounting period ending on 31-3-1979, but that should, in our opinion, be no consideration for determining the point of time when tax is deductible. The language of sub-section (1) of section 194A specifically stipulates the point of time when tax is to be deducted, and honouring the said language, we hereby hold that such point of time, in the present case, was September, 1979, and not 31-3-1979, as held by the learned Commissioner (Appeals). Inasmuch as the interest has been paid by the assessee within the time given by rule 30, read with section 200, the assessee cannot be held to be an assessee in default in respect of the said tax and no interest can be charged from the assessee for the payment of tax in the Reserve Bank of India on 16-10-1979. The order of the learned Commissioner (Appeals) is, in view of what we have stated above, hereby reversed and the appeal of the assessee is allowed.
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1982 (12) TMI 63 - ITAT CALCUTTA-D
In Part, Legal Representative, One Partner, Partnership Deed, Two Partners ... ... ... ... ..... tion 37 of the Partnership Act create statutory liability upon the continuing partners to pay a sum as indicated in section 37 of the Partnership Act to the legal representative. The observation of the Commissioner (Appeals) is not correct that there was a provision and no ascertained liability. The liability was ascertained in view of section 37 of the Partnership Act. Under the above circumstances, if the facts of the case along with the various case laws cited by the assessee are taken into consideration, it was correct that there was a liability for the legal heir s share of profit and/or interest and hence the same could be allowed as deduction. The plea of the assessee has been accepted in the subsequent assessment year 1978-79 by the AAC who, vide his order dated 12-8-1981 has allowed the interest claimed by the assessee at Rs. 14,641. Accordingly the claim of the assessee is accepted and the ITO is directed to allow its claims. 6. In the result, the appeal is allowed.
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1982 (12) TMI 62 - ITAT BOMBAY-E
Business Income ... ... ... ... ..... lic Provident Fund. Apart from the fact that no arguments were addressed on this point before us, we find that the directions given by the Commissioner (Appeals) are perfectly in order and the assessee can have no grievance against the same, since they are in his favour. 32. In the last ground the assessee contends that the amount of salary was to be taxed after deducting the expenditure incurred by him. This contention has already been considered and disposed of by us while disposing of the revenue s appeal and it is not, therefore, necessary to deal with it separately again here. 33. In the result, the revenue s appeal is to be treated as partly allowed since we have accepted the revenue s main ground that the commission income is taxable only as salary and not as business income or income from other source. The assessee s cross objection shall also be treated as partly allowed since we have restored Ground No. 1 to the file of the Commissioner (Appeals) for fresh disposal.
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