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Showing 181 to 195 of 195 Records
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1988 (5) TMI 15
The petitioner's jewellery was seized in October 1987. An objection under section 132(11) of the Income-tax Act was filed on May 5, 1988, but not yet decided. The court expects the objection to be decided by September 15, 1988. The writ petition is disposed of finally.
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1988 (5) TMI 14
The petitioner raised grievance over excessive bank guarantee for released pawned articles. Application for reconsideration pending. Court disposed of writ petition, directing application to be decided within three weeks. No further direction given. Certified copy of order to be provided to parties within forty-eight hours.
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1988 (5) TMI 13
The High Court of Rajasthan allowed the application under section 27(3) of the Wealth-tax Act, directing the Tribunal to refer questions of law regarding the applicability of rule 2B(2) of the Wealth-tax Rules and the exemption claimed under section 5(1)(xxxii) of the Wealth-tax Act for the assessment year 1978-79. The court held that questions of law arise concerning the onus of proving market value of closing stock and the exemption claimed by the assessee. The Tribunal was directed to refer these questions to the court for decision.
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1988 (5) TMI 12
Issues:
1. Interpretation of business expenditure under section 37(2B) of the Income-tax Act, 1961.
2. Eligibility for deduction under section 80G of the Income-tax Act, 1961.
Analysis:
The judgment delivered by the High Court of Rajasthan pertained to a reference under section 256(1) of the Income-tax Act, 1961, initiated by the Revenue. The primary questions of law to be addressed were related to the nature of certain expenses claimed by the assessee and the eligibility for deduction under section 80G of the Act for a specific assessment year. The assessee had claimed deductions as business expenditure under section 37(2B) for expenses incurred on providing snacks and beverages to constituents, along with a deduction of Rs. 22,557 as charity and donations to a charitable trust under section 80G. Notably, the assessee had reported a loss for the relevant year with no taxable income. The Income-tax Officer rejected both claims, which were subsequently upheld by the Appellate Assistant Commissioner but overturned by the Tribunal, leading to the reference before the High Court.
Regarding the first question on the nature of business expenditure under section 37(2B), the High Court relied on previous decisions to support the assessee's claim. Citing precedents, the court concluded that the expenses in question were indeed deductible as business expenditure, aligning with the Tribunal's view and contrary to the Revenue's position. However, the second question concerning the deduction under section 80G required a distinct analysis.
In addressing the eligibility for deduction under section 80G, the High Court drew parallels with section 80M of the Act, emphasizing the requirement for income inclusion to avail of the deduction. Referring to a Supreme Court ruling, the court highlighted that the applicability of section 80G hinges on the computation of total income, necessitating the presence of income for the deduction to apply. Given that the assessee had declared a loss without any taxable income, the court reasoned that the conditions for invoking section 80G were not met. Consequently, the Tribunal's decision in favor of the assessee on this aspect was deemed unjustified, leading to a split decision on the two questions raised in the reference.
In conclusion, the High Court partially favored the assessee by upholding the Tribunal's decision on the first question related to business expenditure under section 37(2B. However, the court ruled against the assessee on the second question concerning the eligibility for deduction under section 80G due to the absence of taxable income, aligning with the Revenue's stance. No costs were awarded in this matter.
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1988 (5) TMI 11
Issues:
Clubbing of share income of a minor in the hands of a Hindu undivided family for income tax assessment purposes.
Analysis:
The judgment pertains to a reference under section 256(1) of the Income-tax Act, 1961, regarding the clubbing of the share income of a minor, Nitesh Kumar, in the hands of an assessee-Hindu undivided family. The question was whether the share income of the minor could be clubbed with the income of the Hindu undivided family represented by its karta, Abhay Kumar, for computing the total income. The contention was based on section 64(1)(iii) of the Act, which deals with including income of a minor child from the benefits of partnership in a firm in the parent's income. The Income-tax Officer rejected the contention, but the Appellate Assistant Commissioner and the Tribunal accepted it, leading to the reference.
The court analyzed section 64(1)(iii) and emphasized that the word "individual" in the provision refers to the parent of the minor child. It clarified that the provision applies only when the parent is the assessee in an individual capacity, not as a representative of a Hindu undivided family. The court highlighted that the word "individual" excludes a Hindu undivided family, as per the definition of "person" in the Act. It further explained that the provision aims to club the minor's income only when the parent is assessed as an individual, not as a karta of a Hindu undivided family.
The judgment referenced Supreme Court decisions and decisions from various High Courts, all supporting the interpretation that section 64(1)(iii) applies when the parent is assessed as an individual, not in a representative capacity. The court noted that the Karnataka High Court decision extensively discussed the issue and highlighted that the income of the minor child can only be clubbed when the parent is assessed as an individual. The court aligned with the conclusions of these decisions and upheld the Tribunal's view that the clubbing of the minor's share income in the Hindu undivided family's hands was not sustainable.
In conclusion, the court answered the reference in favor of the assessee, affirming that section 64(1)(iii) applies only when the parent is assessed as an individual, not in a representative capacity. The judgment clarified the distinction between the capacities of a karta of a Hindu undivided family and an individual for the purpose of income tax assessment, ensuring that the clubbing of the minor's income is done correctly in accordance with the law.
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1988 (5) TMI 10
The High Court of Rajasthan ruled that the share income of a minor son in a Hindu undivided family from a partnership firm cannot be included in the family's income under section 64 of the Income-tax Act, 1961. The court upheld the Tribunal's decision in favor of the assessee. (Case citation: 1988 (5) TMI 10 - RAJASTHAN High Court)
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1988 (5) TMI 9
Issues Involved:
1. Method of valuation adopted by the Valuation Officer under section 16A(5) of the Wealth-tax Act, 1957.
2. Inclusion of reversionary value in the valuation.
3. Inclusion of the right to receive a flat in the valuation.
4. Rate of capitalisation for determining the fair market value.
5. Validity of the Commissioner of Wealth-tax's order under section 25(2) of the Wealth-tax Act, 1957.
Issue-wise Detailed Analysis:
1. Method of Valuation Adopted by the Valuation Officer:
The petitioners challenged the valuation of their property by the Valuation Officer, who determined the fair market value of the property for the assessment years 1977-78 to 1984-85. The Valuation Officer's method included three factors: capitalised value of rent, reversionary value, and the right to receive a flat in the future. The final valuation ranged from Rs. 9,46,400 on March 31, 1977, to Rs. 17,04,400 on March 31, 1984.
2. Inclusion of Reversionary Value in the Valuation:
The Valuation Officer included the reversionary value, which is the value of the property reverting to the lessor after the lease term. The petitioners argued that this inclusion was contrary to established legal principles. The court referred to previous judgments, notably CIT v. Ashima Sinha [1979] 116 ITR 26 (Cal) and CED v. Radha Devi Jalan [1968] 67 ITR 761 (Cal), which held that the reversionary value should not be included in the valuation of tenanted properties. The court concluded that the Valuation Officer misdirected himself by including the reversionary value, which is not sustainable in law.
3. Inclusion of the Right to Receive a Flat in the Valuation:
The Valuation Officer included the value of the right to receive a flat in the future, as stipulated in the lease agreement. The petitioners contended that this right was speculative and not an asset capable of being quantified. The court agreed, noting that several contingencies could prevent the realization of this right, making its valuation speculative and uncertain. The court held that such a right could not be included in the valuation unless the flat was actually obtained by the lessor.
4. Rate of Capitalisation for Determining the Fair Market Value:
The Valuation Officer used a capitalisation rate of 7%, which the petitioners argued was too low. They suggested a rate of at least 12%, referencing a Supreme Court judgment in Special Land Acquisition Officer v. P. Veerabhadarappa [1985] 154 ITR 190, which emphasized that the rate of capitalisation should reflect the prevailing rate of return on investments at the relevant time. The court accepted the petitioners' contention, stating that the rate of capitalisation should be at least 12%, with a multiplying factor not exceeding 8 1/2.
5. Validity of the Commissioner of Wealth-tax's Order:
The Commissioner of Wealth-tax had directed the Wealth-tax Officer to reconsider the valuation, including the right to receive a flat as an asset. The court found this order erroneous, as the value of such a right could not be quantified unless the flat was actually obtained. Consequently, the court set aside the Commissioner's order to the extent it directed reconsideration of the right to receive a flat.
Conclusion:
The court quashed the Valuation Officer's report dated September 3, 1987, and set aside the Commissioner's order dated February 17, 1987, under section 25(2) of the Wealth-tax Act, 1957. The respondents were directed to proceed in accordance with the law, considering the court's observations in determining the property's value. All parties were instructed to act on a signed copy of the operative part of the judgment and order.
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1988 (5) TMI 8
The High Court of Rajasthan upheld the Tribunal's decision regarding messing expenses not being entertainment expenses under section 37(2B) of the Income-tax Act, 1961 for the assessment year 1975-76. The decision was based on previous case law and ruled in favor of the assessee, with no costs awarded. (Case citation: 1988 (5) TMI 8 - RAJASTHAN High Court)
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1988 (5) TMI 7
The High Court of Rajasthan ruled that on the death of a partner, there was a dissolution of the firm, leading to two separate assessments for different periods. The Tribunal's decision was upheld, and the case was governed by the proviso in section 187(2) of the Income-tax Act, 1961. The reference was answered in favor of the assessee. (Case citation: 1988 (5) TMI 7 - RAJASTHAN High Court)
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1988 (5) TMI 6
Issues Involved:
1. Constitutional validity of sections 3 and 5 of the Bengal Agricultural Income-tax (Amendment) Act, 1980.
2. Legislative competence of the State Legislatures of West Bengal and Kerala to impose agricultural income-tax on income derived from the sale of tea grown and manufactured by an assessee.
3. Interpretation of "agricultural income" under Article 366(1) of the Constitution and its relation to the Indian Income-tax Acts.
4. Retrospective effect of the Bengal Agricultural Income-tax (Amendment) Act, 1980.
Issue-wise Detailed Analysis:
1. Constitutional Validity of Sections 3 and 5 of the Bengal Agricultural Income-tax (Amendment) Act, 1980:
The petitions challenged the constitutional validity of sections 3 and 5 of the Bengal Agricultural Income-tax (Amendment) Act, 1980, which omitted sub-sections (2) and (2A) of section 8 of the Bengal Agricultural Income-tax Act, 1944, with retrospective effect. The petitioners argued that this amendment sought to impose agricultural income-tax on the entire income derived from the sale of tea grown and manufactured by an assessee, thereby transgressing the constitutional limitations contained in Article 246(3) of the Constitution read with Entry 46 of List II of the Seventh Schedule.
2. Legislative Competence of the State Legislatures of West Bengal and Kerala:
The core issue was whether the respective State Legislatures had the competence to legislate regarding taxes on the income from the sale of tea grown and manufactured by an assessee beyond 60% of such income, as computed under the Indian Income-tax Act. The petitioners contended that the amendments by the State Legislatures of West Bengal and Kerala were void and of no legal effect as they exceeded the legislative competence of the states under Article 246 of the Constitution.
3. Interpretation of "Agricultural Income" under Article 366(1) of the Constitution:
Article 366(1) defines "agricultural income" as having the same meaning as in the enactments relating to Indian income-tax. The court examined whether the definitions under the Indian Income-tax Act, 1922, and the Income-tax Act, 1961, along with the relevant rules (Rule 24 of the Income-tax Rules, 1922, and Rule 8 of the Income-tax Rules, 1962) formed part of the definition of "agricultural income." The court held that the income derived from the sale of tea grown and manufactured by an assessee must be computed as business income, and only 60% of such income is deemed agricultural income, which the State Legislatures can tax.
4. Retrospective Effect of the Bengal Agricultural Income-tax (Amendment) Act, 1980:
Although the petitioners challenged the retrospective operation of the Bengal Agricultural Income-tax (Amendment) Act, 1980, the court did not find it necessary to delve into this issue in detail, given its conclusions on the other issues.
Judgment:
The court declared that the State Legislatures of West Bengal and Kerala could impose agricultural income-tax only on 60% of the income derived from the sale of tea grown and manufactured by an assessee, as computed under the Indian Income-tax Act and the relevant rules. The amendments made by the Bengal Agricultural Income-tax (Amendment) Act, 1980, and the deletion of the Explanation in the Kerala Agricultural Income-tax Act did not confer any wider power on the State Legislatures to impose taxes on agricultural income. The petitions were substantially successful, and the parties were directed to bear their own costs.
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1988 (5) TMI 5
Whether the loan, "Qua-Raza-E-Hasana" is includible in assessee's net wealth - Whether Tribunal was justified in accepting that the amount of Rs. 4 lakhs was in the nature of 'Quaraza-e-Hasana' - Whether, Tribunal was justified in holding that the amount of Rs. 4 lakhs cannot be included in the total assets of the assessee
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1988 (5) TMI 4
Effect of Retrospective Amendment of Bye-laws - Whether the sum credited during the year of account to the loss equalisation and capital redemption reserve fund by deposits received from producer members of the society under clause 50 of its bye-laws is of revenue nature assessable to tax - Whether, Tribunal was right in holding that the amount was not a revenue receipt liable to tax
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1988 (5) TMI 3
Whether the land sold by the assessee constituted a capital asset within the meaning of section 12B of the Indian Income-tax Act or was agricultural land as defined in section 2(4A) of the Act - Whether the transaction of lease effected by the assessee amounted to a transfer within the meaning of section 12B so as to attract liability for capital gains tax - Whether an issue not considered by the Tribunal can be raised before Supreme Court
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1988 (5) TMI 2
Expenditure incurred by the assessee on providing water pipelines and electricity facility to municipality - capital expenditure - Whether, the expenditure of Rs. 2,09,459, or any portion thereof, incurred by the company in the accounting period relevant to the assessment year 1959-60 was allowable as deduction in determining the profits of the company for the assessment year 1959-60
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1988 (5) TMI 1
Income-Tax authorities cannot be prevented from relying on the Evidence Act - if assessee was found to be in possession of some goods, he can be presumed to be its owner - no explanation by assessee to rebut the above presumption - application of section69A is valid - assessee was found to be in possession of some goods, can he presumed to be its owner
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