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Case Laws
Showing 121 to 140 of 211 Records
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1985 (10) TMI 91 - BOMBAY HIGH COURT
Non-resident ... ... ... ... ..... unable to explain how such income would not be included in the total income of an assessee ordinarily resident in India on the construction we have put on section 5. We may point out that the construction put by us on the provisions of section 5 and section 64 is in accord with the language of these sections and also appears to be a reasonable construction because, generally speaking, the object of clauses (i) to (iv) of sub-section (1) of section 64 seems to be to treat the incomes covered therein as if they were the income of the assessee himself and that appears to be the intention of the Legislature in enacting the said provisions. In the result, the question referred to us is answered in the affirmative and in favour of the assessee. We may make it clear that although the references are answered as above, it is for the reasons given by us in our judgment and not because of the reasons given by the Tribunal. The Commissioner to pay the costs of the references in one set.
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1985 (10) TMI 90 - BOMBAY HIGH COURT
Actual Cost, Depreciation ... ... ... ... ..... If there is an increase in the liability in respect of the actual cost of that machinery, that increase must necessarily relate to the capital asset and we fail to see what difference it makes whether the assessee shows the value of the capital asset as having increased on account of increased liability in the balance-sheet or does not do so. As we have pointed out, section 43A of the Income-tax Act, 1961, only deals with the effect of a change in the rate of exchange with the foreign currency concerned in determining the actual cost referred to in section 43 and there is nothing in the language of section 43 to indicate that the actual cost has anything to do with the cost of the asset in question being capitalised or not. The last submission of Mr. Jetly must also be, therefore, rejected. In the result, the question referred to us is answered in the affirmative and in favour of the assessee. The Commissioner to pay to the assessees the costs of these references in one set.
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1985 (10) TMI 89 - BOMBAY HIGH COURT
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... ... ..... t to the borrowing and if, the creation of the capital asset precedes the borrowing, the borrowing cannot be considered to be for the purpose of creation of the capital asset. It would be interesting to remember that in that case, the borrowings in question had been made only partly for payment towards machinery supplied and the bulk of the amount borrowed was to be utilised for repayment of deposits taken from the public. As we have already pointed out, there is nothing on the facts of the case before us to show that the capital asset in question was created before the increase in the liability of the assessee on account of devaluation. Moreover, the principle laid down by the Madras High Court is in the context of altogether different facts. It can have no application to a case of devaluation like the one before US. In the result, question No. (2) is answered in the affirmative and in favour of the assessee. The Commissioner to pay the costs of these references in one set.
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1985 (10) TMI 88 - BOMBAY HIGH COURT
Reserves, Surtax ... ... ... ... ..... r 1970-71 that the amount of the reserve dropped to Rs. 4,007 and, in the statement of the case, it is stated that in the year ended December 31, 1968, bad debts in the sum of Rs. 65,993 had been written off. On these facts, it does not appear that the appropriation to the doubtful debts reserve was made to meet a known or existing liability or contingency. The doubtful debts reserve, accordingly, was in the nature of reserve and not a provision and was, therefore, includible in the computation of the assessee s capital. The appropriation to the deferred taxation reserve also appears to have been made ad hoc and without any specific, known or existing liability in mind. The Tribunal was, therefore, right in holding that the deferred taxation reserve was includible in the computation of the assessee s capital. Accordingly, both questions are answered in the affirmative and in favour of the assessee. The Revenue shall pay to the assessee the costs of the references in one set.
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1985 (10) TMI 87 - BOMBAY HIGH COURT
Actual Cost, Business Expenditure, Company, Depreciation ... ... ... ... ..... f one-fifth of the amount of salary payable to him. The Madras High Court took the view that the second proviso to section 40(c)(iii) would be attracted where there is no income chargeable under the head Salaries and the case before that court was one where there was no income of the employee chargeable under the head Salaries . In view of this decision of the Madras High Court which had been followed by the Division Bench of this court in the case of Bombay Burmah Trading Corporation Ltd. 1984 145 ITR 793, and in the interest of uniformity, we are also inclined to follow the said decision of the Madras High Court. In view of this, we are of the view that the Tribunal was right in holding that the perquisites paid to A. P. Giusti are not to be considered under section 40(c)(iii) or section 40(a)(v) of the Income-tax Act, 1961. In the result, all the questions referred to us are answered in the affirmative and against the Revenue. The Commissioner to pay the costs in one set.
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1985 (10) TMI 86 - KARNATAKA HIGH COURT
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... ... ..... ommendation made by the Commissioner and the fact situation. On the very terms of this section, the petitioner has to approach the Board through the Commissioner for relief. At any rate, this section does not alter the earlier legal position to justify me to examine the same for the very first time and grant relief. Whether the legal representatives of the petitioner should avail of the beneficial provision made in section 220(2A) of the Act or not is a matter for them to decide. But, as and when any application is made by them, have no doubt that the Commissioner will examine the same in its proper perspective and submit his recommendation to the Board which I have no doubt will deal with the same on merits. In the light of my above discussion, I hold that these writ petitions are liable to be dismissed. I, therefore, dismiss these writ petitions and discharge the rule issued in the cases. But, in the circumstances of the cases, I direct the parties to bear their own costs.
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1985 (10) TMI 85 - RAJASTHAN HIGH COURT
Business Income ... ... ... ... ..... er. The learned counsel placed reliance on Hanuman Motor Service v. CIT 1967 66 ITR 88 (Mys), CIT v. Mahalakshmi Textile Mills Ltd. 1967 66 ITR 710 (SC), Guntur Merchants Cotton Press Co. Ltd. v. ITO 1977 108 ITR 620 (AP) and Permali Wallace Ltd. v. CIT 1985 151 ITR 43 (MP). In the aforesaid cases, it was held that the repairs carried out by the assessee would not strictly come under the purview of renovation and that the expenditure was allowable as revenue expenditure. In the case of CIT v. Mahalakshmi Textile Mills Ltd. 1967 66 ITR 710, the Hon ble Supreme Court observed that the current repairs to the plant and machinery is an allowable expenditure. On the basis of the aforesaid authority, we hold that the expenditure incurred by the assessee in the form of replacement of tin shed was a revenue expenditure and admissible under the Income-tax Act, 1961. Our answer to the reference is, therefore, in the affirmative, i. e., in favour of the assessee and against the Revenue.
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1985 (10) TMI 84 - BOMBAY HIGH COURT
Business Income ... ... ... ... ..... of these authorities, it was submitted by him that in the present case also the income earned by the assessee from the said godown and the portion of the office premises should be treated as business income. In our view, the contention of Mr. Vakil really amounts to begging the question. The only question which we have to decide is whether, on the facts of this case, the income earned for the previous year relevant to the assessment year from the said godown and the portion of the office premises sublet as aforesaid could be regarded as business income. In our view, for the reasons which we have already stated, the said godown and the said portion of the office premises cannot be treated as business assets and hence the authorities which lay down that income from business assets must be regarded as business income are of no assistance in this case. In the result, the question is answered in the negative and against the assessee. The assessee to pay the costs of the reference.
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1985 (10) TMI 83 - KARNATAKA HIGH COURT
Assessment Order, Income Tax, Original Assessment ... ... ... ... ..... ip then was), referring to Subramanya s case 1969 73 ITR 499 (Mys), distinguished the same as inapplicable to the language of section 25A of the Sales Tax Act. In my view, Sha Vajeshankar Vasudeva and Company s case 1974 34 STC 257 (Kar) does not really assist Sri Babu to hold that the order is not barred by time. On the above discussion, I hold that the rectification order made by the Agricultural Income-tax Officer is barred by time and is without jurisdiction and, therefore, the same is liable to be quashed. When once I hold that the rectification order is liable to be quashed, it necessarily follows that the consequential demand notice issued by the Agricultural Income-tax Officer is also liable to be quashed. In the light of my above discussion, I quash the order made by the Agricultural Income-tax Officer and the consequential demand notice issued thereto. Rule issued is made absolute. But, in the circumstances of the case, I direct the parties to bear their own costs.
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1985 (10) TMI 82 - PATNA HIGH COURT
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... ... ..... ot in position, for good reason, to say either way, whether the order of the Tribunal is genuine or not. But since the order has been filed on affidavit, we proceed on the basis of the order. If this is correct, the difference falls below 20 per cent. between the returned and the assessed figures. The case has now assumed a different complexion. This figure was not before the Tribunal. The question of penalty, therefore, requires fresh consideration. The matter, therefore, must be remanded to the Tribunal for applying itself to the question whether the penalty can and should be imposed or not. We, therefore, refuse to answer the question referred to us. The Tribunal will now dispose of the appeal against the order of imposition of penalty in accordance with law on the basis of the finally assessed sum. There shall be no order as to costs. Let a copy of this order be transmitted to the Tribunal under the seal of the court and under the pen of the Registrar as soon as possible.
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1985 (10) TMI 81 - BOMBAY HIGH COURT
Reassessment ... ... ... ... ..... the decision in Mandyala Govindu and Company s case 1976 102 ITR 1 (SC) already quoted must now be borne in mind. The Supreme Court said that even if the partners were to bear the losses in proportion to their respective shares in the profits, the amount of the loss in the minor s share remained undistributed. Would, it asked, the partners between them bear the loss in the minor s share equally or to the extent of their own individual shares? The partnership deed before the Supreme Court and that before us do not suggest the answer. There is, therefore, no means of ascertaining in this case how the losses are to be apportioned. Following Mandyala Govindu and Company s case 1976 102 ITR 1 (SC), the facts being indistinguishable, we must hold, as was held there, that the assessee is not entitled to registration. The question posed before us is, accordingly, answered in the negative and in favour of the Revenue. The assessee shall pay to the Revenue the costs of the reference.
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1985 (10) TMI 80 - GUJARAT HIGH COURT
Business Expenditure, Insurance Premia ... ... ... ... ..... expenditure within the meaning of section 37(1) of the Act. As pointed out earlier, the sole purpose of taking out these insurance policies was to secure liquid cash at the time it was needed to pay off the legal representatives of the deceased partner. If the amount paid by way of insurance premia is for securing this liquid cash, a capital asset, then the expenditure incurred therefor could only be said to be in the nature of capital expenditure. We are, therefore, of the opinion that the insurance premia was not deductible under section 37(1) either. For the above reasons, we answer the question referred for our opinion in the negative, that is, in favour of the Revenue and against the assessee. The reference is disposed of accordingly with no order as to costs. The assessee seeks a certificate of fitness to appeal to the Supreme Court under section 261 of the Act. We do not consider this to be a fit case for grant of certificate sought. We, therefore, reject the request.
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1985 (10) TMI 79 - BOMBAY HIGH COURT
Capital Gains ... ... ... ... ..... on of the portion of the said plot which was sold by the assessee as aforesaid should be taken to be its market value as on the date of the conveyance executed in favour of the assessee, namely, September 25, 1964, and not the amount mentioned as the purchase price under the agreement to purchase entered into by the assessee as aforesaid. In our view, there is no substance whatever in this submission. The conveyance itself clearly mentions the price at which the land in question was sold to the assessee and that price is the same as that set out in the agreement of purchase referred to earlier. In view of this, there is no question of the market value of the said portion of the land having to be ascertained as on the date of the conveyance. It is clear that the cost of acquisition was at the rate mentioned in the conveyance. In the result, the question referred to us must be answered in the negative and in favour of the Revenue. The assessee to pay the costs of the reference.
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1985 (10) TMI 78 - BOMBAY HIGH COURT
Industrial Company ... ... ... ... ..... annot be applicable to the definition of the term processing used in a different context in a different statute. In view of what we have held earlier, the question referred must be answered in the affirmative. Even apart from that, we are of the view that in the present case, the wool sold by the assessee after carrying out the various activities referred to earlier to the raw wool purchased by the assessee must be regarded as a commercial commodity different from the raw wool purchased by the assessee. Merely because what was purchased was wool and what was sold was also wool, one cannot jump to the conclusion that there was no new commercial commodity brought into existence by the activity carried out by the assessee. That would be as good as saying that a steel bar is the same commercial commodity as raw molten steel. In the result, the question referred to us is answered in the affirmative and in favour of the assessee. The Commissioner to pay the costs of the reference.
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1985 (10) TMI 77 - BOMBAY HIGH COURT
Company, Reserves, Super Profits Tax ... ... ... ... ..... that all the liabilities over the several assessment years provided for by the amount of Rs. 52,68,486 had been crystallised by final assessments. Mr. Sathe drew our attention to the decision of the Supreme Court in Kesoram Industries and Cotton Mills Ltd. v. CWT 1966 59 ITR 767. We find it hard to appreciate its relevance to Mr. Sathe s argument, for it was there held that the liability to pay tax was a present liability though it became payable after it was quantified in accordance with ascertainable data. The rate was always ascertainable. All the ingredients of a debt being present, it was a present liability of an ascertainable amount. We must hold, as the Tribunal did, that no part of the amount of Rs. 52,68,486 made as a provision for taxation could have been included in the capital computation of the assessee. In the result, both the questions are answered in the negative and in favour of the Revenue. The assessee shall pay to the Revenue the costs of the reference.
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1985 (10) TMI 76 - KERALA HIGH COURT
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... ... ..... hat while in respect of a director employee, the company can claim deduction up to Rs. 72,000, such claim is still subject to the limitation in respect of salary and perquisite as provided under clauses (a) and (c) of sub-section (5). In the present case, it is admitted that all the amounts paid to the managing director during the relevant accounting years were solely by way of salary and perquisite and no other amount was paid so as to attract the provisions of section 40(c). In the circumstances, the expenditure could be allowed only with reference to section 40A(5) and section 40(c) had no application. Accordingly, we answer the questions referred to us in the affirmative, that is, in favour of the Revenue and against the assessee. We direct the parties to bear their respective costs in these tax referred cases. A copy of this judgement under the seal of the High Court and the signature of the Registrar shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.
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1985 (10) TMI 75 - RAJASTHAN HIGH COURT
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... ... ..... a permissible deduction under section 36(1)(iii) of the Act. The question whether the amount was borrowed and used by the assessee firm for the purpose of its business is a finding of fact and this court cannot go beyond the same and since this finding is accepted, the interest paid on such borrowings is a deductible amount. Section 37 of the Act is very wide. Moreover, the Department itself has accepted the genuineness of the gifts made by the two partners, vide their assessment orders dated April 29, 1975, and which orders have become final and have not been challenged by the Department and since we have come to the conclusion that the amount of interest is an admissible deduction under section 36(1)(iii) of the Act, we need not go into the provisions of section 37 of the Act and, therefore, we do not find any question of law arising out of the judgment of the Tribunal. In the result, these reference applications are dismissed. The parties are left to bear their own costs.
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1985 (10) TMI 74 - RAJASTHAN HIGH COURT
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... ... ..... . According to the partnership, they have not contributed any capital and also did not render any service and they were not required to bear the losses and relying on Addl. CGT v. A. A. Annamalai Nadar 1978 113 ITR 574 (Mad), the Tribunal came to the conclusion that there is no transfer of asset as such in favour of the minor sons. Therefore, it remanded the case to the Gift-tax Officer to decide about the alleged relinquishment of 60 share in favour of the two minor sons in accordance with law after giving an opportunity to the parties to lead any further evidence if they wanted. Learned counsel for the Revenue could not justify that the view taken by the Tribunal was wrong or improper. We are in agreement with the view taken by the learned members of the Income-tax Appellate Tribunal and we do not find any question of law arising out of the judgment of the Income-tax Appellate Tribunal, dated June 21, 1980. The application is, therefore, dismissed with no order as to costs.
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1985 (10) TMI 73 - KERALA HIGH COURT
Cash Credits ... ... ... ... ..... law in setting aside the order of remand of the Appellate Assistant Commissioner whereby he directed the Income-tax Officer to make a fresh assessment in accordance with law and after affording the assessee a reasonable opportunity to examine and cross-examine witnesses in respect of the two entries of Rs. 25,000 each. We answer question No. 1, as so recast, in the negative, that is, in favour of the Revenue and against the assessee. In the light of our answer to question No. 1, we do not answer questions Nos. 2 to 6 as answers to these questions would depend upon the final order which the Income-tax Officer shall make pursuant to the direction of the Appellate Assistant Commissioner in his order dated February 26, 1974 (annexure J). We direct the parties to bear their respective costs in these tax referred cases. A copy of this judgment under the seal of the High Court and the signature of the Registrar shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.
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1985 (10) TMI 72 - DELHI HIGH COURT
Advance Tax, Person Not Previously Assessed ... ... ... ... ..... e circumstances because the language of the section is not ambiguous. The exact language of the section is as follows (3) Any person who has not previously been assessed by way of regular assessment under this Act or under the Indian Income-tax Act, 1922 (XI of 1922), shall, in each financial year, before the date on which the last instalment of advance tax is due in his case under sub-section (1) of section 211, if his current income is likely to exceed the amount specified in sub-section (2) of section 208, send to the Income-tax Officer an estimate of-... The provision shows that an obligation to file an estimate arises before a person has been regularly assessed and once an assessment is made, the obligation ceases. We do not think that it makes any difference what happens to the assessment. We accordingly find that no question of law arises and if one arises, the answer is self-evident. Therefore, we decline to call for a reference. The parties will bear their own costs.
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