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Case Laws
Showing 161 to 180 of 263 Records
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1981 (9) TMI 106 - SUPREME COURT
Whether those transactions of purchase effected by the appellant from the Industrial General Products Private Limited can be regarded as purchases "from the open market" ?
Held that:- In the present case, it was open to every person desirous of purchasing the surface active agents to place orders with the manufacturing Company, namely, M/s. Industrial General Products Private Limited, and obtain the supply on payment of the price at the prevailing rate. The sales by the said Company were not to a limited class only. Hence, the purchases of the surface active agents effected by the appellant from M/s. Industrial General Products Private Limited have to be treated as purchases made "from the open market". The denial to the appellant of the benefit of the exemption provided for by the Notification was, therefore, clearly illegal. Appeal allowed.
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1981 (9) TMI 105 - SUPREME COURT
Whether amounts retained or appropriated or set apart by the concerned assessee-company by way of making provision, (a) for taxation, (b) for retirement gratuity, and (c) for proposed dividends from out of profits and other surpluses could be considered as " other reserves " within the meaning of r. 1 of the Second Schedule to the super Profits Tax Act, 1963 for inclusion in the capital computation of the company for the purpose of levying super profits tax ?
Held that:- the appropriation of the amounts set apart by the assessee-companies before us for taxation would constitute a provision made by them to meet a known and existing liability and as such the concerned amounts would not be includible in the capital computation.
All the items, namely, gratuity, furlough salary, passage, service, commission, etc., were clearly in respect of liabilities which had already accrued in the years in which the provision was made and were not in respect of anticipated liabilities which might arise in future and, therefore, the court held that the said provision was not reserve but a provision
In the context of the question whether while incurring any expenditure or making any disbursement a commercial concern will resort to current income or past savings, the normal rule, in the absence of express indication to the contrary, would be to resort to the current income rather than past savings.
In our view, therefore, the Tribunal was right in excluding the sum of ₹ 3,10,450 from the general reserves while computing the capital of the assessee-company for the assessment year 1974-75 in the absence of express indication to the contrary. Civil Appeal is partly allowed and the issue whether the appropriation for retirement gratuity is a reserve or not is remanded to the taxing authority and the rest of the appeal is dismissed.
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1981 (9) TMI 104 - MADRAS HIGH COURT
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... ... ..... 65,035 being loans from the Life Insurance Corporation of India secured on the mortgage of house property at No. 3, Archibishop Mathias Avenue and life insurance policies are liable to be deducted for assessment years 1967-68, 1968-69 and 1969-70, respectively ? The format of the question would seem to suggest that in respect of each of the three assessment years in question, there was a fresh debt by the assessee in favour of the LIC. That is not so. The assessee raised only a single loan on the security of the house and the life policy. Owing to part payment of the debt from time to time, the actual figure of the outstanding (amount) had become less and less at each of the three valuation dates relevant to the three assessment years in question. As to the material part of the question itself, having regard to the considerations we have earlier mentioned, the answer we render is in the affirmative and in favour of the assessee. There will, however, be no order as to costs.
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1981 (9) TMI 103 - MADRAS HIGH COURT
Business Expenditure ... ... ... ... ..... conversion materials for Ring Frames ... 6,679.72 (3) For giving guarantee to the Commercial Taxes Department for getting stay of disputed sales tax 1,245.00 --------------------- Total ... 14,003.46 --------------------- It may be seen that the first two amounts represent the commission paid for importing machinery and the third item is for the purpose of complying with a condition in the order granting stay of collection of tax pending disposal of the appeal or other proceedings on sales tax. As far as the first two amounts are concerned, the matter has already been decided in Sivakami Mills Ltd. v. CIT 1979 120 ITR 211. As far as the third amount is concerned, it would stand on an a fortiori footing, because sales tax is a revenue liability and the guarantee commission paid for discharging a revenue liability would clearly be revenue. The result is that the question referred is answered in the affirmative and in favour of the assessee. There will be no order as to costs.
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1981 (9) TMI 102 - MADRAS HIGH COURT
Business Expenditure ... ... ... ... ..... rs. The Supreme Court in Cambay Electric Supply Industrial Co. v. CIT 1978 113 ITR 84 (SC), held that in computing profits of the assessee for the purpose of the deduction provided under s. 80E, items of unabsorbed depreciation and unabsorbed development rebate carried forward from earlier years would have to be deducted before arriving at the figure on which the percentage contemplated by s. 80E was to be computed. This decision was followed in CIT v. Rane Brake Linings Ltd. 1979 120 ITR 82 (Mad) and in CIT v. English Electric Co. Ltd. 1981 131 ITR 277 (Mad). It is not in dispute that there is no fresh point to be considered in this case and the earlier decisions would apply here. Applying these decisions, the questions referred have to be and are, accordingly, answered in the negative and in favour of the revenue. As the assessees have been successful in all the cases on the first question, we think it proper to award costs to the assessees. Counsel s fee Rs. 500, one set.
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1981 (9) TMI 101 - MADHYA PRADESH HIGH COURT
Export Market Development Allowance ... ... ... ... ..... el and Wire Products 1982 133 ITR 365 (MP). Further this section has been amended by the Finance (No. 2) Act of 1980, with effect from 1st April, 1972, and the amendment makes it specific that borrowed money and debts owed by the assessee are to be excluded in computing the capital employed. As we are dealing with the assessment year 1973-74, the amendment introduced by the Finance Act is applicable in the instant case. For the reasons given above, we answer the questions in favour of the department and against the assessee as follows (1) The assessee was not eligible for the export markets development allowance in respect of expenditure on the carriage of goods to their destination out side India or on the insurance of such goods while in transit. (2) The assessee was not entitled to relief under section 80J on the basis of the gross capital without deducting the value of the borrowed capital employed in the undertaking. There will be no order as to costs of this reference.
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1981 (9) TMI 100 - PUNJAB AND HARYANA HIGH COURT
Penalty, Wealth Tax ... ... ... ... ..... f harassment. As this tax has clearly failed to achieve its original objective, I propose to discontinue the levy of wealth-tax on agricultural property except in the case of owners of tea, coffee, rubber and cardamom plantations. I am sure that this measure will be widely welcomed by our farmers. The Wealth-tax Commissioner refused to waive the penalties regarding the assessment years from 1972-73 to 1975-76, on the ground that the declaration of wealth was not voluntary by the assessee as the returns were filed at the instance of the WTO. In my view, he has not correctly interpreted s. 18B. Therefore, the impugned order is liable to be quashed. For the aforesaid reason, I accept the writ petition with costs and quash the impugned order so far as it relates to the assessment years 1972-73 to 1975-76, and direct the Commissioner to decide the applications relating to the said assessment years afresh after taking into consideration the above observations. Counsel fee Rs. 300.
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1981 (9) TMI 99 - DELHI HIGH COURT
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... ... ..... agree with the AAC and the Tribunal that the grant of relief to the assessee was correct and that the order of rectification proceeds on an erroneous basis. We would only like to add that even if another opinion could be entertained and the section said to be capable of two interpretations-one as suggested by the learned counsel for the applicant and one as discussed above, still the impugned action under s. 154 would have to be set aside. It is well settled that the provisions of s. 154 cannot be resorted to in order to make a revision in a matter on which there could be two plausible interpretations. In this view of the matter also, the Appellate Tribunal s action upholding the order of the AAC has to be held justified. We are, therefore, of opinion that the question referred to us has to be answered in the affirmative and in favour of the assessee. We so answer it. The reference is disposed of accordingly. The assessee will be entitled to its costs. Counsel s fee Rs. 350.
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1981 (9) TMI 98 - BOMBAY HIGH COURT
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... ... ..... ding that the amount actually paid over to the beneficiary by the trustees in any particular year can be included in the income of the beneficiary. The fact that an identical amount has been paid during all the five assessment years would not alter the legal position or affect the same in any manner. In this view of the matter, in our opinion the Tribunal was entirely right in holding that the entire income of the trust was to be assessed in the hands of the trust under the first proviso to s. 41(1) and that the beneficiary could not be assessed in respect of the same or even in respect of the actual amount received by him from the trustees. The two questions are accordingly answered as follows. Questions Nos.1 and 2-The entire income was assessable in the hands of the trust, and no part thereof was assessable in the hands of the beneficiary. The answer will apply to all the assessment years under consideration. The Commissioner to pay costs of the reference to the assessee.
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1981 (9) TMI 97 - BOMBAY HIGH COURT
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... ... ..... s under certain circumstances itself negatived the said clause being a contract of sale between the parties. Apart from that, the material produced by the assessee does show that the modus operandi for the purchase of the said material by. KOEL from Glacier was that KOEL placed orders with Glacier in a manner as any other customer would do and paid market price and Glacier accepted the said offer (to purchase) in England and received money for the said material also in England. The said documents also showed that the contract of sale of the said material was between principal and principal. The said mode of operation would firstly show that cl. 5(ii) of the agreement of collaboration could not by itself be construed as being a contract of sale and purchase between KOEL and the assessee and that the situs for such a contract of sale of material to the assessee was outside India. In the result, we answer the question in the negative on both parts and in favour of the assessee.
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1981 (9) TMI 96 - CALCUTTA HIGH COURT
Company, Gratuity Reserve, Surtax ... ... ... ... ..... on, we may refer to the observations of this court in the case of CIT v. Jugantar P. Ltd. 1981 128 ITR 619 at p. 624. We may, however, point out that in that case the facts were slightly different, that is to say, there was a scheme for the payment of gratuity. But here there used to be payments of gratuity in the past and this was, as the Tribunal held, clearly earmarked for the payment of gratuity distinguishing it from other reserves. In that view of the matter and in the context of the facts the observations of the Bombay High Court in the case of CIT v. Forbes Forbes Campbell and Co. Ltd. 1977 107 ITR 38 perhaps would not be strictly applicable. In the premises we are of the opinion that this was not a reserve which was freely available to the company for future use and, therefore, we would answer the question in the negative and in favour of the revenue. In the facts and circumstances of the case, the parties will pay and bear their own costs. C. K. BANERJI J.-I agree.
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1981 (9) TMI 95 - MADRAS HIGH COURT
Co-operative Society ... ... ... ... ..... subject of consideration for adjustment of carried forward losses or other items which would require to be considered. We, therefore, answer the question referred to us in the affirmative and in favour of the assessee. The assessee will be entitled to its costs. Counsel s fee Rs. 500. One set. When this judgment was pronounced, the learned standing counsel applied orally for grant of leave to appeal to the Supreme Court stating that there is some difficulty in the application of the particular decision of the Supreme Court to the relevant facts of this case and also brought to our notice the grant of leave by the Gujarat High Court in the case referred to above. Taking into consideration all the facts, we consider that this is a case in which leave should be granted and leave is granted on the question as to whether the relief under s. 80P requires to be calculated before or after the adjustment of unabsorbed depreciation or unabsorbed development rebate, as the case may be.
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1981 (9) TMI 94 - MADRAS HIGH COURT
Business Expenditure, Depreciation, Entertainment Expenditure ... ... ... ... ..... e on an identical question, took the same view as given above. In fact that decision follows an earlier one in Ganesh Sugar Mills Ltd. v. CIT 1969 73 ITR 395 of the same court. There are two decisions of the Allahabad High Court in Raza Sugar Co. v. CIT 1970 76 ITR 541 and Kundan Sugar Mills v. CIT 1977 106 ITR 704, taking the same view. The result is, the 4th question is, answered in the negative and in favour of the revenue. As neither party has wholly succeeded, there will be no order as to costs. The learned counsel for the assessee made an oral application for grant of leave to appeal to the Supreme Court with reference to question No. 4 dealing with the claim for extra shift allowance. We do not consider, that this is a fit matter for the grant of leave for two reasons. One is that the same view has commended itself to three courts on more than one occasion and the other is the interpretation of the rule appears to be quite plain on its face. We decline to grant leave.
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1981 (9) TMI 93 - MADRAS HIGH COURT
Business Expenditure ... ... ... ... ..... y agreed, was that the surrender of the guarantee amounts by the assessee was for the purpose of avoiding possibly higher losses in the assessee s business which would have entailed in the event of import and utilization of foreign cotton. In this sense, therefore, the losses were regarded as incidental to the assessee s business and allowable as such. There is no controversy in this case as to whether the losses are to be treated on the revenue side, or whether they are to be dealt with as capital losses. The only question is whether the write-off of the losses is incidental to the assessee s business. On that question, our answer must be in the affirmative, both on the findings of the AAC as confirmed by the Tribunal and on the basis of the reasonings rendered by this court in Surya Prabha Mills case 1980 123 ITR 654 (Mad). We, accordingly, answer the reference in the assessee s favour. In the peculiar circumstances of this case, however, there will be no order as to costs.
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1981 (9) TMI 92 - MADRAS HIGH COURT
Business Loss ... ... ... ... ..... uction claimed by the assessee in writing off the amounts so forfeited was in the course of and incidental to the assessee s business. On this finding, the question referred to us fairly answers itself. We may observe, in conclusion, that the frame of the question of law sent to us by the Tribunal is wide in its language. The question not only calls for an inquiry as to whether the deduction claimed is strictly a business deduction, but also whether it can be claimed as a proper revenue item of allowance. This latter aspect of the allowance of business loss would be equally important. In this case, however, we do not, have to go into this aspect of the question, because the departmental authorities did not at any stage contend that the amounts which the assessee had written off were non-revenue items. For the reasons earlier stated, this reference is answered in the affirmative and against the department. The assessee is entitled to its costs. Counsel s fee Rs. 500 (one set).
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1981 (9) TMI 91 - BOMBAY HIGH COURT
Acquisition Of Immovable Property ... ... ... ... ..... gs because the competent authority has merely served a notice under section 269D of the Act and it is open to the petitioners to raise this contention in that inquiry. It was also urged that an appeal is provided in case the petitioners are aggrieved. In my judgment, there is no merit in the submissions made on behalf of the Department. The grievance of the petitioners is in respect of the assumption of jurisdiction, and no notice could be issued by the competent authority unless the basic requirements of section 269C of the Act are satisfied. In these circumstances, no valid purpose would be served by directing the petitioners to appear before the competent authority. On the other hand, it would merely lead to multiplicity of proceedings. In these circumstances, the petitioners are entitled to the relief sought in the petition. Accordingly, the rule is made absolute in terms of prayer (b) of the petition. In the circumstances of the case, there will be no order as to costs.
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1981 (9) TMI 90 - PUNJAB AND HARYANA HIGH COURT
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... ... ..... st the individual partner/partners of the firm. It is not disputed that if the partner or the partners are not able to meet the liability, then they can be sent to civil prison in execution of that certificate. In such a case, the citizen is likely to be put into jail pursuant to a tax recovery certificate wherein his name is not mentioned. We, therefore, accept the second contention and hold that an individual partner cannot be proceeded against on the basis of a tax recovery certificate issued in the name of the firm. It shall, however, be open to the department to issue such a certificate against the petitioner or his co-partners for making the impugned recovery. With the aforementioned observations, the petition stands disposed of.
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1981 (9) TMI 89 - BOMBAY HIGH COURT
Entertainment Expenditure ... ... ... ... ..... om a venture wholly carried on by the assessee. We make it clear that we have proceeded to consider the question referred to us on the footing that it is expressly conceded by the ITO that this amount is laid out or expended wholly or exclusively for the purpose of the business of the assessee. It is on that footing which is reflected in the order of the AAC that we have considered the computation of the limit prescribed under s. 37(2) of the I.T. Act, 1961. On that express footing the question referred to us is answered as follows In the case of this assessee and for the two years under consideration the percentage of allowance of entertainment expenditure as laid down in s. 37(2) is to be applied to the entire business income of the assessee inclusive of share income from joint venture partnership. It is made clear that the dividends, interest on securites and capital gains will be required to be excluded. The Commissioner to pay the costs of the reference to the assessee.
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1981 (9) TMI 88 - MADRAS HIGH COURT
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... ... ..... ne be relevant. It cannot be that findings in an assessment order will lose their finality for purposes of levy of regular income-tax on the company s total income in case they are revised in appeal or revision, but they will still retain their finality for purposes of proceedings for levy of additional income-tax under s. 104 on the very assessee s income to the extent it is not distributed as dividend. We are, therefore, satisfied that the Tribunal acted aright in ignoring the assessment orders of the prior years and placing reliance on the appellate decisions in those assessments for arriving at a finding as to the reality and extent of the assessee s losses in the earlier years for adjudging the reasonableness or otherwise of the assessee s decision in not declaring dividends out of the income of the current year. The questions of law are accordingly answered against the department. The Commissioner of Income-tax will pay the costs of the assessee. Counsel s fee Rs. 500.
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1981 (9) TMI 87 - GUJARAT HIGH COURT
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... ... ..... he levy of penalty in the light of the provisions of s. 271(2), and the Tribunal had, therefore, no occasion to deal with such an argument, the question of the applicability of s. 271(2) cannot be said to arise out of the order of the Tribunal and we, cannot be called upon to answer the question posed for our opinion in the light of the said provision. In the aforesaid view of the matter, we decline to consider and answer the question whether if s. 271(2) was invoked, the assessee was liable to be visited with penalty in the light of the provisions of the said sub-section, In view of the foregoing discussion, we decline to answer the question posed for our opinion. Having regard to the fact that the assessee has not appeared at the hearing of the reference, there shall be no order as to the costs of the reference. Before parting with the matter, we wish to place on record our sense of gratitude to Mr. J. P. Shah who readily agreed to render assistance to us as amicus curiae.
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