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1981 (3) TMI 61 - PUNJAB AND HARYANA HIGH COURT
Depreciation ... ... ... ... ..... as held to be an adventure in the nature of trade by the Tribunal but its finding was reversed by the High Court. It is, therefore, evident that the decisions, in all the four cases relied upon by the learned counsel for the assessee, are based on their peculiar facts and in all of them there was no material to hold that the assessee had purchased the land with an intention to resell it for profit either as agricultural land or as building sites after developing the same. On the other hand, in the present case, there can be no doubt that the assessee had from the very beginning an intention to develop the land and sell it out after dividing it into small residential plots. The activity thus carried on, as held in Raja J. Rameshwar Rao s case 1961 42 ITR 179 (SC) would be nothing but a venture in the nature of trade or business. Consequently, the questions in all the three references are answered in the affirmative, against the assessee and in favour of the revenue. No costs.
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1981 (3) TMI 60 - BOMBAY HIGH COURT
Deduction From Profits And Gains, New Industrial Undertaking ... ... ... ... ..... nd (2) that on merits also, the depreciation had to be set off in priority to s. 80J deductions, having regard to the definition of gross total income under s. 80B(5). He also relied on the decision in Ashok Motors Ltd. v. CIT 1961 41 ITR 397 (Mad). This order was upheld by the AAC and the Tribunal, and that is how question No. 4 in respect of which rule was issued has been raised by the assessee. It is obvious that the statutory definition of gross total income in s. 80B(5) contemplates that the total income has to be computed in accordance with the provisions of the I.T. Act before making any deduction under Chap. VI-A in which s. 80J is included. This definition thus makes it clear that unabsorbed depreciation has to be first taken into account before the gross total income for the purposes of Chap. VI-A is considered. This position appears to us to be unassailable, and we, therefore, do not see any reason to make the rule absolute in this case. Rule discharged with costs.
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1981 (3) TMI 59 - KARNATAKA HIGH COURT
Income, Surtax ... ... ... ... ..... he TCC receipts are construed as income, as the certificates had been received in respect of the assessment years 1966-67 to 1970-71, much earlier to the accounting year relevant to the assessment year 1973-74 and as the assessee has been maintaining its accounts on the mercantile system, it was not income during the previous year relevant to the assessment year 1973-74. However, in view of our acceptance of the first contention urged for the assessee, it is unnecessary to decide the second contention. In the result, we answer the question referred for the opinion of this court in the negative, i. e., in favour of the assessee, as follows The Tribunal was not right in law in holding that tax credits under s. 280ZB of the I.T. Act, 1961, issued to the assessee for the assessment years 1966-67 to 1970-71, were in the nature of income requiring reduction of capital by the application of r. 4 of the Second Schedule to the C. (P.) S. T. Act, 1964, for the assessment year 1973-74.
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1981 (3) TMI 58 - MADHYA PRADESH HIGH COURT
Executor, Legal, Representative Estate ... ... ... ... ..... parate assessments for the same year would not make the assessees to be two distinct entities. The argument of the learned counsel for the department that the assessment till the date of death was in individual status and, thereafter, in the status of an AOP, makes the two assessees distinct entities cannot be accepted, for the reasons already discussed above and on the facts and circumstances it would also be relevant to point out that as per s. 168(1)(a) of the Act had there been only one executor, the assessment would have been as if the executor were an individual . It is, therefore, only for statistical purposes that the executors of the estate of the deceased are assessed as AOP otherwise, as already stated, for the purpose of rates, etc., the assessment has to be-deemed to be on the assessee or the actual beneficiaries. In the result, we answer the question in the affirmative, that is, in favour of the assessee and against the department. We make no order as to costs.
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1981 (3) TMI 57 - DELHI HIGH COURT
Deemed Dividend, Household Expenses, Interest ... ... ... ... ..... se on the point, it seems apparent that in this case either Shrimati Asha Devi should not have been taxed at all or, if she was to be taxed, then the present assessee cannot be assessed for the same income which had already been taxed. Unfortunately, the provisions of s. 16(3) are silent on the question of double taxation nor has this point been expressly referred to in the Tribunal s judgment. So, after having mentioned the point, we would say that out of the income of the wives, the income derived by Shrimati Dinesh Nandini has to be excluded from tax altogether in the hands of the assessee, and in the case of Shrimati Asha Devi, only the amount arising out of an investment of Rs. 88,100 is to be taxed the remaining amount out of Rs. 10,501, which cannot be attributed to the original investment of Rs. 88,100, is to be excluded. We answer this question accordingly. In view of our answers to the questions referred, we would award costs to the assessee. Counsel s fee Rs. 550.
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1981 (3) TMI 56 - GUJARAT HIGH COURT
... ... ... ... ..... e questions referred to us as follows Questions Answers 1. Whether, on the facts and in the In the negative and circumstances of the case, the Tribunal was right against the assessee. in holding that only Rs. 67,190 out of Rs. 1,07,266 earned by the assessee is liable to be brought to tax in the assessment year 1971-72 in question and the balance of Rs. 38,539 was rightly taxed by the Income-tax Officer in the assessment year 1970-71 ? 2. Whether the assessee is entitled to In the negative and value its rights to purchase the land and, against the assessee. consequently, deduct Rs. 38,539, declared as income in the assessment year 1970-71, from the income for the assessment year 1971-72 ? 3. Whether the assessee was justified in In the negative and working out notional profit for the assessment against the assessee. year 1970-71, in respect of closing stock, when the assessee had not owned any land but had acquired only the rights to purchase the land ? No order as to costs.
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1981 (3) TMI 55 - DELHI HIGH COURT
... ... ... ... ..... e said that the imposition of penalty was premature. An examination of s. 271(1)(c), reproduced above, shows that the penalty can be imposed when the assessee has concealed the particulars of income or furnished inaccurate particulars of such income. In the present case, the assessee, i. e., the petitioners, voluntarily disclosed their income and for that reason it was argued that there was no concealment. In our view, the assessee had concealed the income, later on disclosed by it, in the returns which had been filed prior to the disclosure scheme. The subsequent act of disclosure of an income of Rs. 28,00,000 and then agreeing that the figure may be raised to Rs. 66,56,000, we feel, would not make any difference and it cannot be said that the petitioners had not concealed particulars of their income or had not furnished inaccurate particulars of such income. Accordingly, we discharge the rule and dismiss the petition. The parties are, however, left to bear their own costs.
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1981 (3) TMI 54 - CALCUTTA HIGH COURT
Intercorporate Dividends ... ... ... ... ..... s total income of the assessee. Similar views in a different context were expressed by the Supreme Court in the case of Rajapalayam Mills Ltd. v. CIT 1978 115 ITR 777 at p. 785. Where, by misreading a section which is clear, a different view was taken and it was held that if a wrong view was taken and at least a wrong calculation was made then it would certainly come within the purview of s. 154 as a mistake apparent on the face of the record. See in this connection the observation of this High Court in the case of ITO v. Raleigh Investment Co. Ltd. 1976 102 ITR 616 at p. 621. In view of the clear provisions of s. 80A, sub-s. (1), read with sub-s. (2), in our opinion, there was a clear mistake apparent from the record and, therefore, the Tribunal was not right on this aspect of the matter and in the view it took. In the premises, question No. 2 is answered in the negative and in favour of the revenue. Each party to pay and bear its own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (3) TMI 53 - BOMBAY HIGH COURT
Search And Seizure ... ... ... ... ..... is no reason at all to give up. On the contrary, that itself is a warrant for injecting more blood, more vigour and more dynamism to control and cure the cancerous growth. The reasons and the compulsions behind the search and seizure provisions are too obvious to all. Though not a talisman, these powers do serve in their own way to reach and get at the secreted profits, concealed wealth and tax-evaded amounts-in the process of bridging up, at least to an extent, the gap between evasion and compliance and, albeit indirectly, between poverty and affluence. Considering the facts and circumstances of this case as also the respondents Intelligence Wing s record against these petitioners produced before this court and also shown to Mr. Gursahani, learned counsel for the petitioners, and bearing in mind the objectives behind the search and seizure provisions, the end result of this petition and the final order thereon can be but only one, viz., this petition fails and is rejected.
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1981 (3) TMI 52 - CALCUTTA HIGH COURT
New Industrial Undertaking ... ... ... ... ..... as the written down value. Eliminating that, the other amount of money for setting up new industries could easily be ascertained. Therefore, the defect in accounts would not conclude the matter, if it was possible to apportion the capital, and that apportionment, in the facts and circumstances of the case, was not an impossible thing. Furthermore, the question itself postulates that a separate unit had been constructed, but the only difficulty was that a part of the old machinery was used that could be accounted for. Having regard to the principles and conditions laid down in Expln. 2 to sub-s. (4) of s. 80J of the I.T. Act, 1961, and the facts found by the Tribunal, in our opinion, the Tribunal arrived at a correct decision and, in those facts and circumstances of the case, the question referred to us must be answered in the affirmative and in favour of the assessee. In the facts and circumstances, each party will pay and bear its own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (3) TMI 51 - KARNATAKA HIGH COURT
Estate Duty, Property Passing, Reference ... ... ... ... ..... make a gift of the property or the money out of which the property was purchased, when the money was made available for the purchase of the property. In fact, there is no evidence to the contrary. As held by the Supreme Court in the case of Sree Meenakshi Mills Ltd. v. CIT 1957 31 ITR 28, the finding that a transaction is a benami, does not involve the application of any principle of law to the facts established in evidence and is a pure question of fact. The Supreme Court has also further observed that such a finding recorded by the Tribunal could not be made the subject-matter of a reference under s. 66 of the Indian I.T. Act. The ratio of the said decision applies on all fours to the facts of this case. The finding that the deceased was only a benamidar is based on consistent and cogent evidence on record and cannot be characterised as perverse or as a finding based on no evidence. In the result, we answer the question in the affirmative, that is, against the department.
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1981 (3) TMI 50 - CALCUTTA HIGH COURT
Change Of Law, Depreciation ... ... ... ... ..... assets had come in. Before we conclude, we have to observe that our attention was drawn to the several other decisions on the question whether retrospective operation of the rules could be given on other sections and as to how these provisions should be read. In our opinion, in this connection we may refer to the decisions of the Supreme Court in the cases of Madeva Upendra Sinai v. Union of India 1975 98 ITR 209 (SC) CIT v. Straw Products Ltd. 1966 60 ITR 156 (SC) CIT v. Indian, Telephone Industries Lid, 1980 126 ITR 548 (Kar) ITO v. M. C. Ponnoose 1970 75 ITR 174 (SC) and Shri Panchaganga Sahakari Sakhar Karkhana Ltd. v. CIT 1979 119 ITR 590 (Bom). In the view we have taken, it is not necessary for us to deal with these decisions to dispose of the present reference. In the premises, the question is answered in the affirmative and in favour of the revenue. In the facts and circumstances of the case, each, party to pay and bear its own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (3) TMI 49 - BOMBAY HIGH COURT
Business Expenditure ... ... ... ... ..... uarely covered by those in the aforesaid Telco s case 1980 123 ITR 538 (Bom). In this view of the matter, there is no-scope for the argument that the present expense would be a capital expense, and, therefore, will be disallowed. In the circumstances, the assessee is entitled to succeed on this point and the Tribunal s finding will have to be set aside. The result, therefore, is that we answer the two questions referred to us as follows Answer to the first question is that the ITO was justified in disallowing the 2/3rds of the foreign tour expense of the technical director, Shri Vinod L. Doshi as the expenditure was in the nature of a capital expenditure. The answer to the second question is that the ITO was not justified in treating the expense of Rs. 16,029 paid to M/s. G. Perry and Sons Ltd., England, as capital expenditure and in disallowing the same as such. In view of the fact that both the assessee and the department succeed partly, there will be no order as to costs.
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1981 (3) TMI 48 - GUJARAT HIGH COURT
Business Expenditure, Question Of Law ... ... ... ... ..... not be a bogus, fictitious or sham transaction. 11. it must not be unrea sonable and out of proportion. 12. it must not be an expenditure merely with a view to avoid tax liability without any genuine purpose or reason in good faith. 13. the advantage to be secured by incurring the expenditure must not be of the nature of a remote possible advantage depending on "ifs" and "buts", and if at all, to be secured at an uncertain future date which may be considered too remote. As we pointed out earlier (1) one of the positive tests must be attracted whereas, (2) none of the negative tests should be attracted. In the present case, the expenditure fulfils all the pre-conditions and passes the tests (positive test No. 2 is attracted whilst no negative test is attracted) devised by us. Hence, on merits, we concur with the view of the Tribunal and refuse to direct the Tribunal to make a superfluous reference. Rule is, therefore, discharged with no order as to costs.
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1981 (3) TMI 47 - CALCUTTA HIGH COURT
... ... ... ... ..... d with this controversy. Our attention was also drawn to the decision of the Allahabad High Court in the case of CIT v. Zeekoo Shoe Factory 1981 127 ITR 837. This again is entirely on a different set of facts and the power of the Appellate Tribunal to go into another ground upon which penalty was sustained was not canvassed before the Division Bench of the Allahabad High Court. For the reasons mentioned hereinabove, we will answer question No. 1 in the negative and in favour of the assessee. For the reasons mentioned hereinabove, we will, however, answer question No. 2 in the affirmative. Though we have said that the Tribunal s order was bad in answering this question, we will make it quite clear that the initiation of the proceedings by the ITO was in order but the order ultimately passed by the Tribunal was bad as being beyond the subject-matter of appeal. In the facts and circumstances of the case, parties will pay and bear their own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (3) TMI 46 - MADHYA PRADESH HIGH COURT
... ... ... ... ..... the order of remand, while holding that the assessment order was set aside, it did not place any restriction on the powers of the ITO in making the fresh assessment and the whole matter was at large, and it was also held that once the assessment order is set aside no fetters on the powers of the ITO can be put. In the instant case, it is not necessary for us to go into this latter question to answer the question at hand. Any how all the decisions referred to by the parties are unanimous on this point that if the assessment order is set aside as a whole, the whole matter is at large before the ITO and he can make a fresh assessment as if there was no previous assessment. We have already held that the assessment order dated February 28, 1974, of the ITO was as a whole set aside and it was non est. In this view of the matter, we answer the question, as re-framed by us in the affirmative, that is, in favour of the department and against the assessee. We make no order as to costs.
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1981 (3) TMI 45 - CALCUTTA HIGH COURT
Company, Reserves, Super Profits Tax ... ... ... ... ..... ingency, viz., the loss in this case, then in our opinion, this amount cannot be said to be available for a future use by the company which is the fundamental test as enjoined by the scheme of the S.P.T. Act, 1963. After all, in a matter of this nature, it has also been emphasised that the substance of the matter should be looked into. If an amount has for all practical purposes been decided to be adjusted against a loss and indicated in the balance-sheet as such, unlike an amount which has not been adjusted against a loss and decided to be kept as reserve as such and the loss had been decided to be carried forward either to get it set off, from the future profits, in such a case, in our opinion, having regard to the reality and the substance of the matter and the scheme of the Act, the question must be answered in the negative and in favour of the revenue. In the facts and circumstances of the case, parties will pay and bear their own costs. SUDHINDRA MOHAN GUHA J.-I agree.
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1981 (3) TMI 44 - GUJARAT HIGH COURT
Agricultural Land, Capital Asset, Capital Gains ... ... ... ... ..... ruary 26/27, 1981 (since reported in Manibhai Motibhai Patel v. CIT 1981 131 ITR 120). Under these circumstances, since the question which has been referred to us itself indicates that the plot in question at the time of sale was entered in Government revenue records as agricultural land, a presumption would arise that it was agricultural land in character and that presumption is not capable of being rebutted by any of the materials on the record of this case, and in the light of the facts of this case conceivably there cannot be any materials and that is why we have not accepted the contention of Mr. Raval for the revenue that the procedure indicated by the Supreme Court in CIT v. Indian Mollasses Co., P. Ltd. 1970 78 ITR 474 should be followed in the present case. Under these circumstances, we answer the question referred to us in the negative, that is, in favour of the assessee and against the revenue. The Commissioner will pay the costs of this reference to the assessee.
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1981 (3) TMI 43 - GUJARAT HIGH COURT
Advance Tax ... ... ... ... ..... in the manner laid down in section 209, and shall pay such amount of advance tax as accords with his estimate on such of the dates applicable in his case under section 211 as have not expired, by instalments which may be revised according to subsection (2) ........ (Proviso not necessary for our purpose). Section 217(1A) reads thus 217. Interest Payable by assessee, when no estimate made.-... (1A) Where, on making the regular assessment, the Income-tax Officer finds that any such person as is referred to in sub-section (3A) of section 212 has not sent the estimate referred to therein, simple interest at the rate of nine per cent. per annum from the 1st day of April next following the financial year in which the advance tax was payable in accordance with the said sub-section up to the date of the regular assessment shall be payable by the assessee upon the amount by which the advance tax paid by him falls short of the assessed tax as defined in sub-section (5) of section 215.
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1981 (3) TMI 42 - MADRAS HIGH COURT
Estate Duty, Gift, Practice ... ... ... ... ..... , on the facts and in the circumstances of the case, the Tribunal was justified in upholding the inclusion, under section 10 of the Estate Duty Act in the assessment made, of gifts aggregating to Rs. 20,000 made by the deceased to his daughters on February 9, 1962, and February 27, 1962. (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the inclusion, under s. IV of the Estate Duty Act in the assessment made, of the value of lands amounting to Rs. 1,03,640 gifted by the deceased to his sons ? and (3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the inclusion, under section IO of the Estate Duty Act in the assessment, of an amount of Rs. 36,000 relating to the value of the house property situated at No. 14, Palakarai, Trichy, which was gifted by the deceased on January 15, 1959, to his, wife ? The accountable person will be entitled to his costs. Counsel s fee, Rs. 500.
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