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Showing 161 to 180 of 197 Records
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1990 (5) TMI 37
Issues:
1. Whether the linking of two sets of transactions is permissible under law?
2. Whether the disallowance of expenditure for providing accommodation to directors and letting out own accommodation was legally correct?
3. Whether any disallowance was justified for legal expenses?
4. Whether the subsidy received for machinery can be deducted from the cost for investment allowance?
Analysis:
Issue 1 & 2:
The case involved the assessee, a private limited company, providing hired residential accommodation to its directors while letting out its own accommodation to others. The excess amount spent on accommodation was disallowed by the Assessing Officer and upheld by the Income-tax Appellate Tribunal. The court observed that determining if an expenditure is for business purposes is a question of fact. The court found that the Tribunal's decision was based on an appreciation of facts and law, and no defects were identified. Thus, questions 1 and 2 were deemed as pure questions of fact and not fit for reference under section 256 of the Income-tax Act.
Issue 3:
Regarding the disallowance of legal expenses, the Assessing Officer disallowed a portion of the expenses based on section 80VV of the Act. The first appellate authority allowed a deduction, which was further upheld by the Tribunal. The court rejected the argument that the disallowance could be considered a permissible deduction under section 37(1) of the Act. The court noted that the argument was not raised before the Tribunal and that the expenditure covered by section 80VV was excluded from section 37(1). Therefore, the court rejected the reference for question 3.
Issue 4:
The assessee claimed investment allowance for machinery, including a generator. The Assessing Officer reduced the cost of the generator by the subsidy received from the Government. The first appellate authority disagreed, but the Tribunal restored the Assessing Officer's view. The court found that question 4 was a legal issue arising from the Tribunal's order. Therefore, the court directed the Tribunal to draw up a statement of the case for question 4 and refer it for the court's opinion.
In conclusion, the court partially allowed the application, directing the Tribunal to refer question 4 while rejecting the references for questions 1, 2, and 3.
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1990 (5) TMI 36
Issues:
1. Discontinuance of business by the assessee.
2. Taxability of rental income received by the assessee.
3. Classification of rental income as income from property or business.
4. Entitlement to depreciation allowance under section 32(1) of the Income-tax Act.
5. Benefit of carry forward of earlier years' losses.
6. Deductibility of interest on borrowings while computing income from property.
Discontinuance of Business:
The case involved the question of whether the assessee had discontinued its business. The court analyzed the evidence, including the sale of assets and the cessation of biscuit manufacturing, to determine that the company had indeed discontinued its business. The court rejected the assessee's argument that a minimal purchase of goods did not signify ongoing operations, ruling in favor of the Revenue on this issue.
Taxability of Rental Income:
The court examined the rental income received by the assessee and its classification as income from property or business. The agreement of lease indicated that the rent was for both the building and furniture, leading the court to conclude that the rent included consideration for the furniture. Citing precedent, the court classified the rental income as income from other sources, ruling against the assessee.
Depreciation Allowance and Carry Forward of Losses:
The judgment addressed the assessee's entitlement to depreciation allowance under section 32(1) of the Income-tax Act and the benefit of carrying forward earlier years' losses. The court did not find any arguments or evidence presented on these aspects, resulting in a ruling against the assessee on these issues.
Deductibility of Interest on Borrowings:
Regarding the deductibility of interest on borrowings while computing income from property, the court found that the rental income was classified as income from property. The court ruled against the assessee on this issue, stating that the interest on borrowings was not deductible.
Judges' Decisions:
The judgment was delivered by A. Raghuvir C. J., with SMT. M. Sharma J. concurring. A detailed analysis of the facts, legal arguments, and evidence led to rulings in favor of the Revenue on several issues, including the discontinuance of business and classification of rental income. The judgment provided a comprehensive examination of each issue raised in the proceedings for the assessment years in question.
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1990 (5) TMI 35
The High Court of Rajasthan dismissed an application under section 27(3) of the Wealth-tax Act, 1957, regarding the valuation of Prem Prakash Cinema building owned by a firm. The Tribunal held that the building was an urban business asset and that the valuation was a question of fact, rejecting the Department's application for reference.
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1990 (5) TMI 34
Issues Involved:
1. Validity of orders issued under section 269UD of the Income-tax Act.
2. Compliance with the Urban Land (Ceiling and Regulation) Act, 1976.
3. Jurisdiction and authority of the appropriate authority under Chapter XXC of the Income-tax Act.
4. Procedural fairness and opportunity for representation.
5. Right to transfer property and issuance of no objection certificate.
Issue-wise Detailed Analysis:
1. Validity of Orders Issued Under Section 269UD of the Income-tax Act:
The petitioners challenged the orders dated November 25, 1988, and May 2, 1989, issued by the appropriate authority under section 269UD of the Income-tax Act, claiming them to be "wholly illegal, invalid and without or in excess of jurisdiction." The orders declared the proposed transfer null and void under section 5(3) of the Urban Land (Ceiling and Regulation) Act, 1976, and stated that the exemption under section 20 of the 1976 Act was not obtained.
2. Compliance with the Urban Land (Ceiling and Regulation) Act, 1976:
The petitioners argued that the State Bank of India and the State of West Bengal had given necessary permissions for the sale of the property, and a no objection certificate was obtained for construction on the land. However, the appropriate authority held that the statement in Form No. 37-I was premature and invalid, as the Urban Land (Ceiling and Regulation) Act had not run its full course, and there was a possibility that the permission could be withdrawn.
3. Jurisdiction and Authority of the Appropriate Authority Under Chapter XXC of the Income-tax Act:
The petitioners contended that the appropriate authority exceeded its jurisdiction under Chapter XXC of the Income-tax Act by declaring the agreement for transfer either premature or invalid. The court noted that the authority must act strictly according to the statute and cannot exercise power based on surmises and conjectures. The law is clear that no statutory authority can exercise its power by way of surmises and conjectures.
4. Procedural Fairness and Opportunity for Representation:
The petitioners claimed that no opportunity was afforded to the company to make its representation before the passing of the impugned orders. The court emphasized that the authority must exercise its power strictly according to the statute and that the prospective transferor and transferee have the right to enter into an agreement for sale if there is no bar or impediment in law.
5. Right to Transfer Property and Issuance of No Objection Certificate:
The court found that the petitioners had a saleable right and title to the property and that the appropriate authority either had to purchase the property under section 269UD of the Income-tax Act or issue a no objection certificate if it was not inclined to purchase. The court ruled that the reasons assigned by the appropriate authority in passing the impugned orders could not be sustained in law.
Conclusion:
The court allowed the writ petition, quashing the impugned orders and issuing a writ of mandamus commanding the appropriate authority to consider Form No. 37-I afresh in accordance with law within 60 days. The authority was directed to take effective steps either under section 269UD of the Income-tax Act or to issue a no objection certificate if there was no inclination to exercise the right of purchase. There was no order as to costs.
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1990 (5) TMI 33
The petition to quash prosecution for offences under sections 193 and 196, IPC, and sections 276C and 277 of the Income Tax Act is dismissed by the High Court of Madras. The Supreme Court has ruled that criminal prosecution cannot be quashed solely because tax proceedings are pending. The court cannot direct the Magistrate to postpone judgment until departmental proceedings are over. The petitioner can make such a request after the trial, and the Magistrate will handle it according to the law. (Case citation: 1990 (5) TMI 33 - MADRAS High Court)
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1990 (5) TMI 32
Issues involved: Challenge to the validity of section 80HHB of the Income-tax Act under articles 14 and 19(1) of the Constitution.
Summary:
The High Court of Delhi, in a writ petition challenging the validity of section 80HHB of the Income-tax Act, addressed the issue alongside Income-tax References Nos. 110 to 112 of 1987. The main question was whether the petitioner was entitled to benefits under section 80-O or not, with the Department contending that the agreements fell under section 80HHB instead.
In a separate judgment related to the same case, it was ruled that the petitioners were not entitled to the benefit of section 80-O. Despite the Department's assertion that the petitioner's case fell under section 80HHB, the benefit under that provision had not been granted due to non-compliance with section 80HHB(3). The petitioner argued that they did not meet the conditions of section 80HHB(3) as they were previously benefiting from section 80-O and had not created reserve accounts as required.
The Court found it unfair not to grant the benefit under section 80HHB to the petitioner, considering their eligible projects and genuine reasons for non-compliance with section 80HHB(3) due to prior approvals under section 80-O. Emphasizing that the petitioner was entitled to relief under section 80HHB, the Court urged the Income-tax Department not to focus solely on technicalities but to allow the petitioner time to fulfill the requirements of section 80HHB(3) for the benefit to be granted.
No significant challenge was raised regarding the validity of section 80HHB, and the Court affirmed the provision's validity. The writ petition was disposed of accordingly, with no costs imposed.
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1990 (5) TMI 31
Issues Involved:
1. Applicability of Section 80HHB vs. Section 80-O of the Income-tax Act, 1961.
2. Validity of approvals granted under Section 80-O for the assessment year 1983-84.
3. Whether income from the seven agreements can be bifurcated under Section 80HHB.
4. Classification of the assessee-company as an 'industrial company' under the Finance Act, 1982.
5. Exclusion of directors' remuneration paid outside India from the limit specified in Section 40A(5)(a) and Section 40(c).
Issue-wise Detailed Analysis:
1. Applicability of Section 80HHB vs. Section 80-O of the Income-tax Act, 1961:
The Tribunal held that the income from the seven agreements with foreign Governments/enterprises is governed by Section 80HHB and not Section 80-O. The Tribunal noted that Section 80HHB relates to the execution of foreign projects, including construction contracts and does not exclude sophisticated or highly complicated work. The Tribunal emphasized that Section 80HHB(5) mandates that if the income is covered under this section, no part of it can be considered under any other section. The Tribunal concluded that the contracts were indivisible and integrated, making them turnkey projects, and therefore, the income could not be bifurcated to claim benefits under Section 80-O.
2. Validity of approvals granted under Section 80-O for the assessment year 1983-84:
Despite the Board's approvals under Section 80-O, the Tribunal held that the income for the assessment year 1983-84 must be considered under the law as it stood at that time. The Tribunal found that the approvals were subject to the provisions of Section 80HHB, which became operative from April 1, 1983. The Tribunal rejected the plea of promissory estoppel, stating that the matter must be decided according to the law and not based on any confusion created by the authorities.
3. Whether income from the seven agreements can be bifurcated under Section 80HHB:
The Tribunal held that the income from the entire activities under the seven agreements could not be bifurcated and is wholly covered under Section 80HHB. The Tribunal noted that the contracts were indivisible and integrated, and the consideration was for the execution of foreign projects. The Tribunal emphasized that no part of the income arose as fees or royalty from rendering technical services under the contracts.
4. Classification of the assessee-company as an 'industrial company' under the Finance Act, 1982:
The Tribunal, following the decision in Minocha Brothers Pvt. Ltd., held that the assessee could not be considered an industrial company. The Tribunal noted that the amendment made by the Finance Act, 1983, was not applicable for the assessment year 1983-84 but for later years.
5. Exclusion of directors' remuneration paid outside India from the limit specified in Section 40A(5)(a) and Section 40(c):
The Tribunal upheld the assessee's claim that remuneration paid to directors for their employment outside India should be excluded from the limit of Rs. 72,000 laid down in Section 40A(5)(a) and Section 40(c). The Tribunal noted that the directors working abroad were also employees of the company, and Section 40A(5)(b)(i) excludes such remuneration from the disallowance limit.
Conclusion:
The Tribunal's decision was comprehensive, addressing the applicability of Sections 80HHB and 80-O, the validity of approvals under Section 80-O, the indivisibility of contracts, the classification of the company, and the exclusion of directors' remuneration paid outside India. The Tribunal's analysis was based on the interpretation of relevant sections and judicial precedents, leading to a detailed and reasoned judgment.
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1990 (5) TMI 30
Issues involved:
The petition filed for mandamus to recall an order u/s 220(2A) of the Income-tax Act, alleging lack of jurisdiction by the Commissioner of Income-tax.
Summary:
The High Court of Calcutta considered a writ petition filed by a company seeking to challenge the order passed by the Commissioner of Income-tax under section 220(2A) of the Income-tax Act. The Commissioner found that the conditions for waiving interest were not met, as the relevant provision was inserted in 1984 and could only apply to levies made after that date. The petitioner argued that the Commissioner's action was quasi-judicial and lacked jurisdiction. Various legal precedents were cited, including cases discussing penalty reduction and waiver. The court also referred to a Supreme Court judgment emphasizing liberal construction of tax laws for industrial activities. The main issue before the court was whether section 220(2A) should have retrospective effect, which was deemed unlikely as per legal principles. Ultimately, the court found no irregularity in the Commissioner's order and rejected the petition, with no costs awarded.
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1990 (5) TMI 29
Issues:
1. Penalty proceedings under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 1975-76.
2. Justification of penalty order by the Income-tax Officer.
3. Validity of penalty imposed on the assessee partnership firm.
4. Recomputation of penalty by the Income-tax Appellate Tribunal.
Analysis:
The judgment pertains to two cross-applications under section 256(2) of the Income-tax Act, 1961, filed by an assessee partnership firm and the Commissioner of Income-tax, Kanpur, concerning penalty proceedings under section 271(1)(c) for the assessment year 1975-76. The dispute arose from the imposition of a penalty of Rs. 1,06,417 by the Income-tax Officer, which was confirmed by the Income-tax Appellate Tribunal. The assessee challenged the penalty order, raising questions regarding the legality and correctness of the penalty imposed.
The assessee contended that the penalty order was illegal and not in accordance with the law, primarily arguing that the Income-tax Officer had levied a penalty below the minimum limit, rendering the order illegal. However, the Tribunal did not accept the assessee's defense, emphasizing that the concealed income was found recorded in the account books maintained by the assessee but was suppressed through various means, indicating deliberate understatement of income. The Tribunal concluded that it was a clear case of concealment within the meaning of section 271(1)(c) of the Act.
Regarding the first question raised by the assessee, the court held that the Tribunal's findings were based on the facts and circumstances of the case, and the imposition of penalty was justified given the deliberate understatement of income by the assessee. The court emphasized that the issue did not give rise to any question of law and was essentially a question of fact, thereby rejecting the need for a reference to the court.
Concerning the second question raised by the assessee, the court noted that it did not arise from the Tribunal's order and was not raised during the appellate proceedings. As a result, the court rejected the prayer regarding the second question.
Additionally, the Revenue had raised a question regarding the recomputation of penalty by the Income-tax Appellate Tribunal, which directed that the penalty would be redetermined based on the concealed income but would not exceed the current penalty amount under appeal. The court held that in the absence of any cross-appeal or objection by the Revenue, the Tribunal lacked the power to enhance the penalty, thereby rejecting the Revenue's application and concluding that no statable question of law arose.
In conclusion, both applications were rejected, affirming the penalty imposed on the assessee partnership firm under section 271(1)(c) for the assessment year 1975-76.
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1990 (5) TMI 28
The High Court of Allahabad ordered the Income-tax Department to return cash and jewellery seized during a raid to the petitioner upon furnishing a bank guarantee of Rs. 75,000, pending the final decision of the appeal before the Income-tax Appellate Tribunal. The court did not express an opinion on the applicability of section 241 of the Income-tax Act. The Department's appeal before the Tribunal was directed to be disposed of promptly.
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1990 (5) TMI 27
The High Court of Allahabad directed the Tribunal to refer two questions of law regarding depreciation on cinema building and machinery for consideration. The questions relate to whether the depreciation is allowable as business income and the significance of an observation by the Commissioner of Income-tax. The case is to be referred under section 256(2) of the Act.
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1990 (5) TMI 26
Issues:
1. Deductibility of interest on a loan of Rs. 20 lakhs.
2. Allowability of loss in the concrete unit.
3. Valuation of closing stock of barbed wire.
Analysis:
1. The first issue pertains to the deductibility of interest on a loan of Rs. 20 lakhs. The Income-tax Officer disallowed the interest amount as the terms and conditions of the loan were unsettled at the end of the relevant year. However, the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal accepted the assessee's claim, stating that the liability to pay interest arises with the use of capital, not just when the amount is quantified. The Tribunal held that the interest would be a permissible deduction in computing taxable income, even if the final rate differed. The court found this to be a mixed question of law and fact, directing the Tribunal to refer the question for its opinion.
2. The second issue concerns the claim for a loss of Rs. 17,726 in the concrete unit due to floods. The Income-tax Officer disallowed the claim citing lack of evidence, but the Tribunal allowed it based on the certificate, reports, and minutes submitted by the assessee. The court deemed this issue a pure finding of fact and upheld the Tribunal's decision, as it was satisfied that the assessee had proven the loss suffered.
3. The final issue revolves around the addition of Rs. 1,93,370 by the Income-tax Officer in valuing the closing stock of barbed wire, which was later deleted by the Tribunal. The Tribunal found the method used by the assessee to value the closing stock to be recognized and well-defined in the commercial world. It also noted that there were no discrepancies in the quantity of finished goods. The court held that the valuation of stock-in-trade is a question of fact and found no error in the Tribunal's decision to accept the valuation method employed by the assessee. Therefore, this issue was deemed a pure question of fact and not fit for reference under the Income-tax Act.
In conclusion, the court allowed the application in part, with no order as to costs due to the divided success of the parties.
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1990 (5) TMI 25
Issues involved: Application u/s 256(2) of the Income-tax Act, 1961 seeking direction to Tribunal to state questions for opinion of the court regarding ad hoc addition towards trading results, ignoring comparable case, non-maintenance of stock register, and gross profit rate variation.
Issue 1 - Ad hoc addition towards trading results:
The assessee questioned the Tribunal's confirmation of the ad hoc addition of Rs. 75,000 without determining the basis of computation of true income. The Tribunal justified the addition due to non-maintenance of proper accounts by the private limited company, leading to estimation of income based on available material and past assessment orders. The court held that the estimate was not a pure guess but based on relevant material, thus no legal question arose from the Tribunal's order.
Issue 2 - Ignoring comparable case:
The Tribunal was questioned for ignoring the comparable case of Chandra Engineering Industries and not following the Supreme Court judgment cited by the applicant. The Tribunal's decision was based on the inadequacy of pointing out the comparable case without substantial evidence, leading to the rejection of the assessee's argument based on the cited judgment.
Issue 3 - Non-maintenance of stock register:
The Tribunal's confirmation of the ad hoc addition towards trading results due to non-maintenance of stock register and auditor's report was challenged. The assessee argued that all purchases, sales, and expenses were vouched and verifiable except for two vouchers, indicating no suppression in turnover. However, the Tribunal upheld the addition based on the lack of proper documentation.
Issue 4 - Gross profit rate variation:
The Tribunal's decision to confirm the ad hoc addition towards trading results despite the variation in gross profit rate and increased turnover was questioned. The Tribunal's justification for the addition was based on the substantial increase in turnover and the lack of proper accounts maintained by the assessee, leading to the rejection of the application seeking direction to the Tribunal.
Separate Judgment: No separate judgment was delivered by the judges in this case.
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1990 (5) TMI 24
Issues involved: Question of law under section 256(2) of the Income-tax Act, 1961 regarding unexplained investment in constructing a building complex.
Summary:
The High Court of Allahabad, in the case at hand, found no question of law that needed to be directed to the Tribunal under section 256(2) of the Income-tax Act, 1961. The main issue revolved around determining if there was any unexplained investment by the assessee in the construction of a building complex. The assessee provided two valuation reports to support their claim, while the Income-tax Officer sought a report from the Government valuer, resulting in conflicting valuation reports. The Tribunal chose to accept the valuation reports submitted by the assessee, concluding that there was no unexplained investment in the construction. This decision was based on factual findings. However, the Tribunal's observation regarding the Valuation Officer's role in clarifying discrepancies in registered valuer's reports was deemed not entirely correct in law by the court. Despite this, the court held that this observation did not invalidate the Tribunal's independent finding based on the available evidence. Consequently, the petition was dismissed with no costs incurred.
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1990 (5) TMI 23
The High Court dismissed the revision petition against the order allowing an amendment in the plaint but restricting the plaintiffs from leading fresh evidence. The court held that the trial court acted rightly as the plea for amendment was only to elaborate an existing plea, not introduce new evidence. The revision petition was dismissed, and parties were directed to appear before the trial court on May 31, 1990.
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1990 (5) TMI 22
The High Court of Orissa dismissed an application under section 256 of the Income-tax Act regarding the allowance of guarantee commission to Kalinga Foundation Trust, upholding the Tribunal's decision that the trust is a genuine entity. The application was rejected as the trust was previously held to be independent and separate, with advances considered real and genuine. The decision was agreed upon by both judges. (Case citation: 1990 (5) TMI 22 - Orissa High Court)
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1990 (5) TMI 21
The High Court of Allahabad directed the Income-tax Appellate Tribunal to draw up a statement of the case and refer it to the court for its opinion. The court identified two statable questions of law regarding the recognition of a deemed partition in a Hindu undivided family property after the death of Sri Prem Sunder. The opposite party did not appear during the proceedings. (Case citation: 1990 (5) TMI 21 - Allahabad High Court)
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1990 (5) TMI 20
Issues Involved:
1. Rejection of waiver petition u/s 273A.
2. Launching of prosecution against the petitioners.
Summary:
1. Rejection of Waiver Petition u/s 273A:
The petitioners filed a writ petition u/ss 226 and 227 of the Constitution to quash the order dated May 31, 1988, rejecting their waiver petition u/s 273A and 273A(4) of the Income-tax Act, 1961, and sought reconsideration or waiver of the penalty imposed u/s 271(1)(c). The petitioners contended that the Commissioner of Income-tax had assured them that if they deposited the tax due, their penalty would be waived or substantially reduced. They acted on this assurance and deposited the tax on March 30, 1988. However, the waiver petition was dismissed without providing reasons, which the petitioners argued was a non-speaking order. The court found that while some form of assurance was given, it was not a firm or specific assurance. Therefore, the principle of promissory estoppel could not be applied to bind the Commissioner to waive or reduce the penalty. The court upheld the rejection of the waiver petition, noting that it was a speaking order with proper application of mind.
2. Launching of Prosecution Against the Petitioners:
The petitioners also sought to quash the prosecution launched against them for offences u/ss 276C(1) and 277 read with section 278B of the Act. They argued that the prosecution was initiated without affording them an opportunity of hearing, violating the principles of natural justice. The court noted that the prosecution was launched at the instance of the Commissioner, which was in accordance with the law as it stood before April 1, 1989. However, the court found that no notice was given to petitioners Nos. 2 and 3, and petitioner No. 1 was not granted a further opportunity of hearing after an adjournment. The court held that the principles of natural justice required that the petitioners be given an opportunity of hearing before launching the prosecution. Consequently, the court quashed the order for prosecution and the complaint filed before the Chief Judicial Magistrate (Economic Offences), Jaipur, along with the consequential proceedings.
Conclusion:
The writ petition was partly allowed. The court upheld the rejection of the waiver petition and the penalty imposed but quashed the prosecution order and the related complaint and proceedings.
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1990 (5) TMI 19
Issues Involved:
1. Application of section 44AC and section 206C of the Income-tax Act, 1961, to L-13 and L-14 licensees.
2. Deduction of tax at source from L-14 licensees.
3. Discrimination in tax exemption between different states.
Summary:
Issue 1: Application of Section 44AC and Section 206C to L-13 and L-14 Licensees
The petitioners, who are country liquor contractors holding L-14 and L-13 licenses under the Punjab Excise Act, challenged the application of section 44AC and section 206C of the Income-tax Act, 1961. They argued that due to the proviso introduced with effect from April 1, 1989, they are not liable to be assessed under section 44AC and to pay tax at source under section 206C. The petitioners claimed that country liquor is not obtained by them in auction and is purchased and sold at a price fixed by the State Government. The court noted that the constitutional validity of these sections had been upheld in previous writ petitions.
Issue 2: Deduction of Tax at Source from L-14 Licensees
The petitioners holding L-13 licenses, obtained through public auction, argued that the terms and conditions of their licenses, including the fixed number of bottles and prices set by excise authorities, exempt them from the provisions of section 44AC and section 206C. The court referred to the Himachal Pradesh High Court's decision in Gian Chand Ashok Kumar's case, which held that L-13 licensees are not liable to pay tax at the purchase point due to the proviso to section 44AC. The court endorsed this view, stating that L-13 licensees are not liable to pay tax at the stage of purchase of country liquor.
Issue 3: Discrimination in Tax Exemption Between Different States
In Civil Writ Petition No. 8337 of 1989, the petitioners sought a mandamus directing the respondents not to charge/deduct income-tax on excise duty and to collect income-tax from them at the purchase point. They cited a communication from the Government of India exempting Uttar Pradesh contractors from payment of tax on the issue price. The court noted that the respondents did not dispute this communication. The court held that the petitioners holding L-14 licenses should not be discriminated against and are entitled to the same relief as their counterparts in Uttar Pradesh.
Conclusion:
The court allowed the petitions, issuing a writ of prohibition directing the respondents not to deduct/charge income-tax from L-13 licensees in view of the proviso to section 44AC and to implement the circular dated June 26, 1989. The respondents were also directed not to charge/deduct income-tax on the excise duty payable by L-14 licensees. No costs were awarded. Civil Miscellaneous Nos. 39 of 1990 and 20963 of 1989 in CWP No. 7161 of 1989 were disposed of accordingly.
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1990 (5) TMI 18
The High Court of Allahabad ruled that there was a succession of one firm by another firm under section 188 of the Income-tax Act, 1961. The court also held that two separate assessments should be framed based on the two returns of income filed by the assessee. It was determined that the firm should be treated as a registered firm until the date of succession. The judgment favored the assessee over the Revenue department.
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