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Case Laws
Showing 121 to 140 of 155 Records
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1986 (6) TMI 35 - CALCUTTA HIGH COURT
Deduction, Interest Paid On Overdraft, New Industrial Undertaking, Perquisite ... ... ... ... ..... the assessee including that on account of payment of income-tax were incurred. In that view, the decisions cited on behalf of the assessee apply on all fours to the facts before us. We are not laying down that if money is borrowed either directly or through an overdraft account for payment of income-tax, the interest paid for the same would be a deductible expenditure. All that we are holding is that if money has been deposited by the assessee out of its profits in an overdraft account from which all payments including income-tax are made, the fact that the said overdraft had a continued debit balance would make no difference to the presumption that the income-tax had, in fact, been paid out of the profits and not out of the borrowings. For the reasons as above, we answer question No. 1 returned at the instance of the assessee in the negative and in favour of the assessee. The reference is disposed of accordingly. There will be no order as to costs. MONJULA BOSE J.-I agree.
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1986 (6) TMI 34 - CALCUTTA HIGH COURT
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... ... ..... borrowed. On a reference, it was held by this court that interest paid on borrowings utilised for payment of income-tax was not allowable as deduction in computing the total income of the assessee. In Eastern Investments Co. Ltd. 1951 20 ITR 1 (SC), the question of deduction of interest arising out of borrowing for payment of income-tax dues was not before the Supreme Court. In the facts of that case, the assessee, a company, agreed to reduce its share capital by Rs. 50 lakhs with the permission of the court and took over from a shareholder debentures in lieu of shares of the face value of Rs. 50 lakhs. The interest paid on such debentures was allowed to be deducted from the income of the assessee. The facts, in that case, are different from the facts before us. In the instant case, following the decisions of this court noted earlier, we answer the two questions referred in the negative and in favour of the Revenue. There will be no order as to costs. MONJULA BOSE J.-I agree.
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1986 (6) TMI 33 - KARNATAKA HIGH COURT
Appeal To AAC, Interest On Refund, Refund ... ... ... ... ..... an order could be construed as an order under section 154 read with section 155 of the Act. With respect, we are unable to agree with that view. We have already stated that the expression reducing refund envisaged under section 246(1)(f) presupposes that there should have been already an assessment order in which refund has been ordered and that refund upon rectification under section 154 read with section 155 of the Act must have been reduced. An order for the first time made under section 154 resulting in a refund cannot obviously fall within the fold of section 246(1)(f). We must, therefore, hold that the appeal preferred by the assessee before the Appellate Assistant Commissioner and the Tribunal were not maintainable. In the conclusion that we have reached, questions Nos. (1) and (2) become academic and, therefore, they are not answered. We answer question No. 3 in the negative and in favour of the Revenue. In the circumstances of the case, we make no order as to costs.
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1986 (6) TMI 32 - KARNATAKA HIGH COURT
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... ... ..... . CIT 1986 158 ITR 313 (SC). But these two requirements need not be present for purpose of cancelling the registration once granted. If the Income-tax Officer wants to cancel the registration under section 186(1), all that he has got to know is whether there was during the previous year no genuine firm in existence as registered. The word genuineness appears to have been used in contradistinction to the words sham , bogus or not real . Our view finds support from the decision of the Allahabad High Court in CIT v. Bajaj and Co. 1983 143 ITR 218 and the decision of the Andhra Pradesh High Court in CIT v. Badjanapara Sall Company 1974 Tax LR 19. Since the Income-tax Officer did not form an opinion that there was during the previous year no genuine firm in existence, he ought not to have cancelled the registration under section 186(1). In the result, we answer the question in the affirmative and against the Revenue. In the circumstances of the case, we make no order as to costs.
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1986 (6) TMI 31 - KARNATAKA HIGH COURT
Compulsory Deposit Scheme ... ... ... ... ..... a rational nexus to the object sought to be achieved by Parliament by enacting the CDS Act. The classification made is rational and intelligible and operation of the provisions of this Act is rightly confined to persons who are economically in a superior position. We are, therefore, of the view that none of the provisions of the CDS Act is violative of article 14 of the Constitution. The other decision referred to us by Sri Sarangan is Union of India v. Harbhajan Singh Dhillon 1972 83 ITR 582 (SC). It is not necessary to consider this decision, as the case before us is fully covered by the decision in Hari Krishna Bhargav s case 1966 59 ITR 243 (SC). On the above discussion, we hold that the CDS Act, does not suffer from legislative incompetence and does not violate the right guaranteed under article 14 of the Constitution. In the result, we dismiss the writ petition and discharge the rule. But, in the circumstances of the case, we direct the parties to bear their own costs.
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1986 (6) TMI 30 - KARNATAKA HIGH COURT
Developement Rebate ... ... ... ... ..... es, it is not in dispute that capital is created and reserve is depleted. When capital is created by issuing bonus shares, the shareholders are enriched. Shareholders could be enriched by issue of dividends or by issue of bonus shares. Changing the terminology of profits into shares cannot, therefore, in our opinion, take the distribution out of the embargo imposed by section 34(3)(a)(i). It may not be, therefore, correct to state that by issue of bonus shares, the company has utilised the profits for the purpose of business. Issue of bonus shares, in our opinion, is, therefore, nothing but distribution of profits and clearly violates the statutory requirement of section 34(3)(a)(i). In the result and for the reasons stated above, we answer the first question in the negative and in favour of the Revenue. The answer to the second question also must be in the negative and in favour of the Revenue and accordingly we answer it. In the circumstances, we make no order as to costs.
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1986 (6) TMI 29 - KARNATAKA HIGH COURT
Total Income ... ... ... ... ..... the agricultural income cannot be said to be unreasonable. The basis is that the big man by reason of his economic superiority to pay should bear a higher load of taxes than is borne by a little man. An assessee with agricultural income occupies a position of economic superiority by reason of his larger income and to make his tax liability heavier is not arbitrary bat is only an attempt to proportion the payment to capacity to pay and then arrive in the end at a more genuine equality. Assessees with agricultural income are in a position of economic superiority and form a class by themselves and it is not the case of the petitioner that the assessees belonging to this class are not treated alike Mohamed Abdul Khader Firm v. State of Tamil Nadu 1985 SCC (Tax) 27 58 STC 12 AIR 1985 SC 12. It, therefore, follows that the argument of arbitrariness is an argument of despair and is devoid of merit. In the result, this writ petition fails and is dismissed with no order as to costs.
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1986 (6) TMI 28 - CALCUTTA HIGH COURT
Destroy, Profits Chargeable To Tax ... ... ... ... ..... ical destruction of the assets. Settled principles for interpretation of a taxing statute are, inter alia, that such a statute must be literally construed and unless a case comes clearly within the mischief of the statute, the subject should not be taxed. Where a taxing statute is ambiguous and capable of two different constructions, the construction in favour of the assessee should be adopted. In fact, the Revenue (seeks) to import into the section by construction the contingency of a loss of assets which is not there. The Legislature has advisedly confined the section to four contingencies, namely, sale, discard, demolition or destruction. For the reasons aforesaid, we are unable to accept the contention of the Revenue. In our view, the Tribunal has decided the question correctly and the same calls for no interference. The question referred is accordingly answered in the affirmative and in favour of the assessee. There will be no order as to costs. MONJULA BOSE J.-I agree.
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1986 (6) TMI 27 - KARNATAKA HIGH COURT
Diversion By Overriding Title, Income ... ... ... ... ..... ind of payment which can truly be excused and not the second. The Tribunal has misapplied the above observation. There may be obligations and obligations to apply the income derived by the assessee. The assessee might have been obliged to meet the expenditure of his sister s marriage out of the income from the property given to him. But such an obligation cannot be equated with the overriding charge on the property. For an overriding charge, the obligation should be of such a nature as to divert the income before it reaches the assessee. In the present case, it is not in dispute that the income from the property was not required to be diverted before it reached the assessee-and the income had been applied in one particular year. Such an expenditure incurred for the marriage of the assessee s sister cannot be regarded as an overriding charge. In the result, we answer the question in the negative and in favour of the Revenue. In the circumstances, we make no order as to costs.
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1986 (6) TMI 26 - MADRAS HIGH COURT
Estate Duty, Principal Value, Property Passing ... ... ... ... ..... death of the deceased. On a plain reading of section 44 of the Estate Duty Act, the expression debts and encumbrances prima facie refer to debts and encumbrances created by the deceased during his lifetime. The other debts and liabilities inclusive of those created by the Estate Duty Act, 1953, would not fall within the scope of the expression debt or encumbrance occurring in that section. In Rm. Arunachalam v. CED 1981 132 ITR 8 71 (Mad), this identical question had been considered and the estate duty payable on the estate of deceased in the hands of the accountable person has been held to be not an admissible deduction in computing the principal value of the estate passing on the death of the deceased. In view of this, the accountable person cannot claim deduction of the estate duty payable in the computation of the principal value of the estate. We accordingly answer the second question in the negative and against the accountable person. There will be no order as to costs.
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1986 (6) TMI 25 - MADRAS HIGH COURT
Profits Chargeable To Tax ... ... ... ... ..... tirety represented the value of the bus, and there was no value for the permit. Since that contention could not be accepted and since no alternative case was put forward by the Revenue at any stage, we cannot permit the Revenue now to argue that the matter should be remanded for fresh consideration on the question of allocation of consideration. Since the sale was a composite sale of the bus and the permit and the consideration paid was for both the value of the bus and the value of the permit and since the assessee had apportioned the consideration which was not disputed at any stage, we have to take the allocation made by the assessee as correct. In these circumstances, we answer the first question in the negative and in favour of the assessee. We also answer the second question in the negative and in favour of the assessee. We answer the third question also in favour of the assessee and against the Revenue. The assessee will be entitled to its costs. Counsel s fee Rs. 500
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1986 (6) TMI 24 - CALCUTTA HIGH COURT
Business Expenditure, Export Market Development Allowance, New Industrial Undertaking, Weighted Deduction
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1986 (6) TMI 23 - CALCUTTA HIGH COURT
Penalty, Return ... ... ... ... ..... of Income-tax in the instant case, established a prima facie case for the assessee that there were reasonable grounds for not filing the return within time is not without substance. The conclusion of the Tribunal that the grounds for waiving interest are different from the grounds for imposing penalty in our view is not correct. The Tribunal ought to have given open consideration to the order passed by the Commissioner of Income-tax in waiving interest and should not have ignored and brushed it aside. As we are disposing of the reference on the ground that penalty cannot be imposed where interest has been charged up to the date of the filing of the return raising the presumption that the time to file the return had been extended, we need not express our final views on this aspect. For the reasons as above, we answer the question referred in the negative and in favour of the assessee. In the facts and circumstances, there will be no order as to costs. MONJULA BOSE J.-I agree.
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1986 (6) TMI 22 - MADHYA PRADESH HIGH COURT
Business Expenditure ... ... ... ... ..... incurred by the assessee in the manner stated and provision having been made in the assessee s accounts maintained according to the mercantile system, the same was rightly allowed as a permissible deduction by the Tribunal. We find that the matter is concluded by the decisions of this court particularly in Addl. CIT v. Kale Khan Mohammad Hanif 1978 114 ITR 812 and Kalekhan Mohammed Hanif v. CIT 1987 163 ITR 769 (MP) wherein similar deductions were allowed on the same principle. Since the point is settled by the decisions of this court following the principle laid down by the Supreme Court in Kedarnath Jute Mfg. Co. Ltd. v. CIT 1971 82 ITR 363, the question now is merely of an academic character and no useful purpose would be served by requiring the reference to be made for deciding the point concluded in this manner. Consequently, the application made by the Commissioner of Income-tax under section 256(2) of the Act is dismissed. There shall be no order as to costs. APPENDI.
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1986 (6) TMI 21 - MADHYA PRADESH HIGH COURT
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... ... ..... eld to be the correct view. Aggrieved by this conclusion of the Tribunal and its conclusion on ancillary matters, the assessee applied for a reference to this court leading to a reference of the aforesaid questions for decision by this court. It is rightly not disputed that in view of the Full Bench decision in Girdharilal Nannelal v . CIT 1984 147 ITR 529 (MP), the Tribunal was justified in taking the view that it was a case of merely a change in the constitution of the firm governed by section 187 of the Income-tax Act. Therefore, the above question No. 1 has to be answered accordingly. No infirmity in the view taken by the Tribunal leading to the reference of the remaining questions has been shown to us. These questions have also, therefore, to be answered accordingly. Consequently, it is held that the Tribunal was justified in the view it has taken on the points covered by all the four questions referred for the decision by this court. There will be no order as to costs.
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1986 (6) TMI 20 - PATNA HIGH COURT
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... ... ..... ifth question, it has to be held that the Tribunal was not right in holding that the Commissioner of Income-tax acted in mechanical manner in setting aside the assessment order for the assessment year 1973-74. His order for this assessment year was not invalid. The answer to question No. 6 must be, as a follow-up of other answers, that the Tribunal was not right in cancelling the consolidated order passed by the Commissioner of Income-tax under section 263(1) of the Incometax Act, 1961, for the assessment years 1968-69 to 1973-74. All the questions referred to us are thus answered in favour of the Revenue and against the assessee. The references are thus answered against the assessee and in favour of the Revenue with costs. Hearing fee Rs. 250 (Rupees two hundred and fifty) payable by the assessee to the Revenue. Let a copy of this judgment be transmitted to the Income-tax Appellate Tribunal in terms of section 260 of the Income-tax Act, 1961. ASHWINI KUMAR SINHA J.-I agree.
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1986 (6) TMI 19 - CALCUTTA HIGH COURT
Deemed Dividend, Dividends ... ... ... ... ..... answered in the affirmative and in favour of the assessee. In Income-tax Reference No. 560 of 1979, question No. 1 is answered in the negative and in favour of the assessee. Question No. 2 is answered in the affirmative and in favour of the Revenue. We would like to add that it appears to us that even if section 12(1B) of the Indian Income-tax Act, 1922, was applicable in the instant case, the assessment could have been made only on a shareholder. It is nobody s case that the assessee was a shareholder or a registered shareholder of the private limited company at the material time. On the contrary, the finding is that all the shares of the private limited company were being held by the firm which has been assessed in respect of the said amount of Rs. 12,26,206. In view of the aforesaid, the costs of the Income-tax Reference No. 354 of 1975 is awarded to the assessee. In the other Reference No. 560 of 1979, each party will pay and bear its own costs. MONJULA BOSE- J.-I agree.
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1986 (6) TMI 18 - MADRAS HIGH COURT
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... ... ..... ith the joint family property, and that the right to blend was limited only to coparceners. She could achieve the purpose of making it Hindu undivided family property by gifting it to the Hindu undivided family or allowing the Hindu undivided family to purchase it from her. In this case, no such throwing into the hotchpotch can be accepted. Secondly, the question could not also arise for the assessment year 1970-71, since the return itself was filed in June, 1970, and the only action of filing the return was claimed to be the throwing of the properties into the hotchpotch. The relevant date for the purpose of the Wealth-tax Act is December 31, 1969, with reference to the assessment year 1970-71, and as on the relevant date, the properties had not been thrown into the hotchpotch, that question also could not arise. In these circumstances, we answer both the questions in the affirmative and against the assessee. The Revenue will be entitled to its costs. Counsel s fee Rs. 500.
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1986 (6) TMI 17 - CALCUTTA HIGH COURT
"Case" In S. 80Vv, Business Expenditure, Deduction U/S 80J, Gratuity Paid To Retired Director, New Industrial Undertaking, Special Deduction, Travel Expenditure
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1986 (6) TMI 16 - KARNATAKA HIGH COURT
Deduction, Income From House Property, Interest Payable ... ... ... ... ..... by the assessee cannot be regarded as an annual charge much less the interest payable thereon. Therefore, the assessee cannot claim deduction of the interest amount of Rs. 2,000 payable on the estate duty. Turning now to the next question as to whether the assessee was entitled to a deduction of interest of Rs. 3,960 from her income either under the head Business or under the head Other sources , it may be stated that this also cannot be allowed in view of the clear finding recorded by the Tribunal that the payment of interest has nothing to do with the making or earning of the income or leasing of Neo Mysore Cafe building. When that finding is not shown to have been illegal or erroneous, the answer to the second question should, therefore, be in the affirmative, since it cannot be deducted under section 57(iii) of the Act. In the result, we answer both the questions in the affirmative and against the assessee. In the circumstances of the case, we make no order as to costs.
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