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1985 (9) TMI 30 - GUJARAT HIGH COURT
Business Expenditure, Disallowance ... ... ... ... ..... Supreme Court in CIT v. Indian Molasses Company Private Ltd. 1970 78 ITR 474 at page 482, the Division Bench felt that it would be just and fair if the assessee as well as the Revenue were given an opportunity to lead evidence on the point of applicability of rule 6DD(j) as explained by the relevant circular. It accordingly refrained from answering the questions on which the court opinion was sought and directed that the matter should go back for a decision as to the applicability of the rule 6DD(j) as explained by the circular after both the sides have been given an opportunity to lead further evidence, if so advised. We adopt the same formula. It will be open to the Tribunal to dispose of the appeal in the light of the observations made by us after determining the question on the basis of fresh evidence, if any, in the light of the Board s circular No. 220 dated May 31, 1977 1977 108 ITR (Statutes) 8. There will be no order as to costs. Reference is disposed of accordingly.
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1985 (9) TMI 29 - RAJASTHAN HIGH COURT
... ... ... ... ..... g the previous year and that since the legal position is well-settled, no useful purpose would be served by referring the proposed question to this court. Thereupon, the Revenue has filed this application. We have heard Shri R. N. Surolia, the learned counsel for the Revenue, and Shri Kasliwal, the learned counsel for the assessee. During the course of his submission, Shri Surolia did not dispute that the assessee was following the cash system for maintaining the accounts. In view of the fact that the assessee was following the cash system for maintaining the accounts, which fact has not been disputed by the Revenue, the Tribunal was justified in holding that the assessee was required to disclose only the income which it had received during the relevant year. In the circumstances, we agree with the Tribunal that no question of law arises out of the order of the Tribunal which may call for reference to this court. The application is, therefore, dismissed. No order as to costs.
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1985 (9) TMI 28 - BOMBAY HIGH COURT
Burden Of Proof, Penalty ... ... ... ... ..... ise from any fraud or any gross or wilful neglect on his part. The Tribunal failed to consider whether the assessee, by the explanation that he furnished in answer to the show cause notice issued to him by the Inspecting Assistant Commissioner, had proved that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part. In this view of the matter, we shall answer the question posed to us in the negative. The Tribunal shall consider whether the assessee has proved that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part and shall, unless it is satisfied that there has been such proof, proceed upon the basis that section 271(1)(c) of the Income-tax Act, 1961, is attracted The question is answered in the negative, and in favour of the Revenue. The Tribunal shall now proceed in the manner stated above. The assessee shall pay to the Revenue the costs of the reference.
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1985 (9) TMI 27 - BOMBAY HIGH COURT
Change Of Law, Penalty ... ... ... ... ..... law as it stood amended with effect from 1st April, 1968. Mr. Mehta, learned counsel for the assessee, stated that although he could not dispute that the question must be answered as aforesaid, in this case the amount of penalty should be reduced, as the case was one which deserves sympathetic consideration. He pointed out that the total income which was found to be concealed was only Rs. 17,091 and that the entire tax payable on this amount came to Rs. 1,489, as pointed out by the Tribunal. It was submitted by him that this case is that of a small assessee and the penalty imposed is very heavy. We are afraid that in our advisory jurisdiction, it is not open to us to take into account considerations of sympathy such as the one urged by Mr. Mehta. Such question may be borne in mind by the income-tax authorities concerned when the matter goes back to the Tribunal. Considering all the facts and circumstances of the case, there will be no order as to the costs of this reference.
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1985 (9) TMI 26 - PUNJAB AND HARYANA HIGH COURT
Question Of Law ... ... ... ... ..... of the Tribunal. As regards question (d), the learned counsel for the assessee contended that the same has been decided by the Tribunal in view of the decision of the conference of the Commissioners noticed by the Delhi High Court in CIT v. Jay Engineering Works 1984 145 ITR 297 (sic). It was also urged that the accounting system employed by the assessee being mercantile, the claim for leave with wages was rightly allowed. Both the contentions raised are on the merits of the controversy and do not show that the question framed is not question of law. As a matter of fact, from the contention of the learned counsel for the assessee also, it is apparent that the question framed is certainly a question of law and the Tribunal wrongly declined to refer it because of its view on the merits of the controversy. Accordingly a mandamus is issued to the Tribunal to refer the question entered at (b), (c) and (d) in ITA No. 168/CHANDI/80 together with the statement of the case, No costs.
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1985 (9) TMI 25 - GUJARAT HIGH COURT
Earned Income ... ... ... ... ..... 82 ITR 50 (SC) wherein it was observed (at page 53) that it was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in proceedings under section 154 of the Income-tax Act. The legal proposition propounded by the Supreme Court cannot be disputed. In the present case, there is no question of interpreting section 154 of Act or any provision of Finance (No. 2) Act, 1967, for finding out its true scope. Hence, both the aforesaid rulings do not help the assessee in view of the facts and circumstances of the case. It is purely reading the section and applying the same to the facts of the present case. Even on reading the definitions of earned income and unearned income , it is clear that there was a mistake apparent on the face of the record. In that view of the matter, the question is answered in the negative, that is, in favour of the Revenue and against the assessee. The reference is accordingly disposed of with no order as to costs.
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1985 (9) TMI 24 - GUJARAT HIGH COURT
Income, Interest On Bank Deposits, Receipt ... ... ... ... ..... uld not materially alter the nature of the transaction between him and the bank. That was the special arrangement arrived at between him and the bank to meet with the special situation, but that arrangement cannot change the character of the initial payment in the account of the assessee. In this view that we take, we are of the opinion that the Tribunal was in error in holding that the entire amount was received in the assessment year 1973-74 only and could be brought to tax in that year. Since we are of the view that the case is covered by clause (a) of subsection (2) of section 5 of the Act, we need not examine the alternative argument based on clause (b) of that sub-section which was advanced before us by Mr. Shah, the learned advocate for the assessee. For the reasons stated above, we answer the question referred for our opinion in the negative, that is, in favour of the assessee and against the Revenue. The reference is disposed of accordingly with no order as to costs.
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1985 (9) TMI 23 - GUJARAT HIGH COURT
Burden Of Proof, Income ... ... ... ... ..... Revenue to prove otherwise. Under section 28, the burden lies on the Revenue to show that the receipt is liable to tax. The real nature of the transaction has to be gathered from the facts and circumstances without clutching at the nomenclature of the receipt. In the instant case, we have come to the conclusion that the capital asset was transferred by the assessee-firm to Bata Shoe Company for Rs. 1,51,000. The quality of payment was nothing but premium or pagri received for transferring the leasehold rights in the premises to Bata Shoe Company with the consent of the landlord. Since the payment was for a capital asset, it can only be said to be a capital receipt and not a revenue receipt. The view that we take finds support from the decision in Bawa Shiv Charan Singh s case 1984 149 ITR 29 (Delhi). We, therefore, answer the question raised for our determination in the negative (in favour of the assessee) on the facts of the present case. There will be no order as to costs.
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1985 (9) TMI 22 - MADHYA PRADESH HIGH COURT
... ... ... ... ..... along with his wife and son and the property of the deceased father of the assessee/respondent (which was admittedly ancestral property in the hands of the assessee) who died after the Hindu Succession Act, 1956, came into force, the said property of the deceased father would go to his son, his wife and the grandson as joint family property. For the reasons stated above, our answers to the questions referred for our decision are in favour of the assessee and against the Revenue. Accordingly, both the questions are answered in the following manner (i) That the Tribunal was justified in law in holding that the property left by the assessee s father was the property of the Hindu undivided family consisting of the assessee himself, his son and wife and not the individual property of the assessee. (ii) That the Tribunal was justified in law in directing the Wealth-tax Officer to take the status of the assessee as a Hindu undivided family. There shall be no order as to the costs.
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1985 (9) TMI 21 - RAJASTHAN HIGH COURT
Benami Transaction ... ... ... ... ..... ribunal was not perverse in the sense that no reasonable person would come to it on the materials on record. Though, on the same materials, it was also possible to come to different conclusion in the reference jurisdiction, the High Court was not competent to find facts for itself. After considering the arguments of learned counsel for the Revenue, we are of the opinion that the question as to whether Smt. Ratan Devi was a benamidar of the assessee-firm or not, is a question of fact, and this question of fact has been discussed by the Income-tax Appellate Tribunal, in detail, in its order, and this court is not competent to go into that finding of fact. The points for reference made by the assessee are all questions of fact. No question of law arises out of the order of the Appellate Tribunal which needs reference to this court by the assessee-firm. As this court has no jurisdiction to go into the findings of fact, the reference applications are, therefore, hereby dismissed.
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1985 (9) TMI 20 - RAJASTHAN HIGH COURT
... ... ... ... ..... ered or otherwise, is required for transferring the property to the partnership. On the second question, it was held in the earlier Amber Corporation s case 1974 95 ITR 178 (Raj), that when property was brought in by partner as his contribution towards the capital of the partnership firm, the building was partnership property and the assessee-firm was entitled to claim depreciation in respect of the building. The same view was affirmed in the later Amber Corporation s case 1984 127 ITR 29 (Raj). It may be observed that the special leave petition filed on behalf of the Revenue before the Supreme Court against the second Amber Corporation s case 1984 127 ITR 29 (Raj) was dismissed by order dated April 18, 1983. In this view of the matter, the questions in respect of which reference is sought by the Revenue stand concluded by the decisions of this court and the Supreme Court. As no referable question of law arises, there is no force in this application and the same is dismissed.
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1985 (9) TMI 19 - RAJASTHAN HIGH COURT
Reassessment ... ... ... ... ..... ndivided family had invested capital in the partnership firm. The Tribunal also found as a fact that in the subsequent years, the credit balances in the accounts of the major as well as minor coparceners constituted their separate and self-acquired capital. The decision of the Tribunal that the share of profit of the major as well as the minor coparceners could not be included in the assessment of the assessee-Hindu undivided family was thus based on a consideration of the facts of the case and emerged out of the finding of fact recorded by the Tribunal. In this view of the matter, the Tribunal appears to be right in holding that no question of law arose out of the orders passed by the Tribunal dismissing the appeals filed by the Revenue before it. All these applications under section 256(2) of the Income-tax Act, 1961, seeking reference are, therefore, dismissed as no question of law arises out of the orders passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur.
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1985 (9) TMI 18 - RAJASTHAN HIGH COURT
Rectification ... ... ... ... ..... May 21, 1981. We are unable to agree with the Appellate Tribunal that they are questions of fact or that it was a finding of fact, and as we have observed above, the Tribunal has not recorded any finding at all. We, therefore, allow the application and direct the Income-tax Appellate Tribunal to state the case and refer the following two questions of law arising out of its order dated May 21, 1981, to this court for its opinion 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that it was not competent for the Inspecting Assistant Commissioner to make an order under section 154 of the Income-tax Act, 1961, for withdrawing the extra shift depreciation allowance allowed on the items of machinery and plant in regular assessment ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the orders of the Inspecting Assistant Commissioner and the Commissioner of Income-tax (Appeals)?
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1985 (9) TMI 17 - RAJASTHAN HIGH COURT
... ... ... ... ..... ified in observing that it was a highly debatable matter and if the Income-tax Officer took one view at the time of passing of the order of assessment and held that the amounts set apart by the company were reserves for redemption of debentures and for bad and doubtful debts, it could not be said that an apparent mistake has been committed by him. If that was so, the Income-tax Officer has no jurisdiction to take proceedings under section 13 of the Act of 1964, but he could have initiated proceedings only for the purpose of rectification of a mistake committed by him. Whether there was a mistake or not committed by the Income-tax Officer on the earlier occasion was a question which could not be said to be one of law, but it appears that it was merely a change of opinion by the Income-tax Officer while he proceeded to pass an order under section 13 of the Act of 1964, which was not permissible under the law. In this view of the matter, this reference application is dismissed.
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1985 (9) TMI 16 - RAJASTHAN HIGH COURT
Addition To Income, Non-maintenance Of Books Of Account ... ... ... ... ..... al in arriving at the conclusion. In this application under section 256(2) of the Act, it was urged before us by learned counsel for the Department that the question relating to the applicability of the provisions of section 145 of the Act without arriving at a finding that the assessee did not maintain proper account books, was a question of law and the Income-tax Appellate Tribunal was in error in refusing to make a reference to this court. We have considered the order passed by the Income-tax Appellate Tribunal and we find that the Tribunal has come to its conclusion after consideration of the material on record that the rate of 8.8 regarding consumption of zinc as claimed by the assessee could not be held to be excessive, but was reasonable. This was essentially a finding of fact and the Income-tax Appellate Tribunal was right in refusing to make reference to this court. The application under section 256(2) of the Income-tax Act has no force and is, therefore, dismissed.
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1985 (9) TMI 15 - RAJASTHAN HIGH COURT
Reassessment, Wealth Tax ... ... ... ... ..... tment in respect of wealth-tax. These facts were not challenged by the Revenue even before the Appellate Tribunal that the assessments under the voluntary disclosure scheme were made much before the reassessment notices were issued by the Wealth-tax Officer on March 15, 1978. In this view of the matter, there was no justification for the Wealthtax Officer to initiate proceedings for reassessment on the ground of nondisclosure of the amount of compensation received by the assessee in respect of the land acquired by the State Government. We, therefore, agree with the Income-tax Appellate Tribunal that no question of law arises out of the order passed by the Tribunal on July 24, 1980, approving the order passed by the Appellate Assistant Commissioner setting aside the reassessment proceedings in respect of the assessment years 1971-72 to 1975-76. As a result of the aforesaid discussion, all the five applications have no force and are dismissed but without any order as to costs.
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1985 (9) TMI 14 - RAJASTHAN HIGH COURT
... ... ... ... ..... Tribunal was right in law in holding that there is positive evidence on record to show that the assessee had furnished inaccurate particulars of its income and that the expenses claimed by it are bogus and such finding is contrary to record and has been arrived at without considering the entire material ? 5. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in sustaining the penalty on the ground of furnishing inaccurate particulars of its income though the Inspecting Assistant Commissioner had imposed penalty on the ground that the assessee had concealed particulars of its income ? The three applications filed under section 256(2) of the Act in respect of the assessment years 1973-74, 1972-23 and 1971-72 are allowed and the Tribunal is directed to state the case and refer the questions of law mentioned by us in the preceding para for the opinion of this court. We leave the parties to bear their own costs of these applications.
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1985 (9) TMI 13 - CALCUTTA HIGH COURT
Business Expenditure ... ... ... ... ..... the said amount was lent to the assessee on interest or that there is no evidence that the assessee in fact used the said amount in his business, on the facts as found, the conclusion is inescapable that the assessee held the money for the benefit of his widowed mother and unmarried sisters in a fiduciary capacity and a constructive trust arises in favour of the latter under the relevant provisions of the Indian Trusts Act, 1882. The assessee undoubtedly had the benefit of the said amount and the right of user thereof in his business where the amount was retained and the assessee became liable to the beneficiaries to account for the advantages received by reason of the user of the said amount. For the reasons aforesaid, we do not give any answer to the questions referred and remand the matter to the Tribunal for being considered afresh in the light of the above observations. If necessary, the Tribunal will permit the parties to adduce further evidence. G. N. RAY J.-I agree.
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1985 (9) TMI 12 - CALCUTTA HIGH COURT
... ... ... ... ..... is by itself, in our view, cannot vitiate the entire penalty proceeding inasmuch as the initial reference by the Income-tax Officer, F , Ward, District IV(3), Calcutta, was valid and lawful. No other ground was pressed by the assessee in this appeal. For the above reasons, we see no reason to interfere with the judgment and order under appeal. The appeal is dismissed without any order as to costs. The learned advocate for the assessee drew our attention to an interim order passed in this appeal in compliance whereof the entire amount of penalty had been paid by the assessee in instalments. A direction on the Income-tax Officer for remission of interest for the delay in payment was sought as section 220(2A) of the Income-tax Act, 1961, empowers the Central Board of Direct Taxes to reduce or waive the interest leviable. We make it clear that this judgment will not prevent the assessee from applying for reduction or waiver of interest as it may be advised. G. N. RAY J.-I agree.
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1985 (9) TMI 11 - RAJASTHAN HIGH COURT
Accrual, Compensation, Income ... ... ... ... ..... questions of law arise from the order of the Tribunal dated January 17, 1979 (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the additional amount of compensation received by the assessee during the period relevant to the assessment year 1972-73 was assessable in the assessment year 1964-65 ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the interest found payable to the assessee should be spread over and only that part of interest which related to the assessment year 1972-73 should be brought to tax in the assessment year 1972-73 and not the entire amount of interest which accrued to the assessee on account of the award of the civil court ? We, therefore, direct the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, to state the case and refer the above mentioned two questions for opinion. The parties are left to bear their own costs.
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