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1983 (11) TMI 26 - MADRAS HIGH COURT
... ... ... ... ..... above observations are apposite. In this case also, the IAC had referred to the original sale of import licences by the assessee, the bogus entries in the books as if the goods had been imported and used in manufacture, the admission of the assessee that it had cooked up its books to camouflage its transactions, and the omission on the part of the assessee to state the persons to whom the licences had been sold as well as those from whom foreign exchange was purchased, to conclude that the assessee had deliberately furnished inaccurate particulars of income in the return and, therefore, it was a fit case for the levy of penalty. The Tribunal, on the contrary, proceeded to apply the decision in CIT v. Ramdas Pharmacy 1970 77 ITR 276 which, as pointed out earlier, is inapplicable. We, therefore, answer the question referred in the negative and against the assessee. The, Department will be entitled to recover the costs of this reference from the assessee. Counsel s fee Rs. 500.
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1983 (11) TMI 25 - MADRAS HIGH COURT
New Industrial Undertaking ... ... ... ... ..... 7(3) from the ITO and from giving a certificate under s. 203 to the shareholder and the error committed by the ITO cannot prejudice the case of the assessee-company. Thus, we hold that the assessee company is entitled to get a certificate from the ITO under s. 197(3) quantifying the exempted portion of the dividend in accordance with rule 20 of the I. T. Rules. Though the assessee-company has asked for a certificate quantifying the exempted portion of the dividend at 100 , it is for the ITO to quantify the exempted portion taking into account all the relevant material. Having regard to the fact that we have expressed our view on merits, it is not necessary to go into the question whether the power of rectification under s. 154 could be invoked by the shareholders. The result is, the writ petition is allowed and the ITO is directed to quantify the exempted portion of the dividend in accordance with rule 20 of the I. T. Rules, 1962. However, there will be no order as to costs.
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1983 (11) TMI 24 - ALLAHABAD HIGH COURT
Failure To Disclose Fully And Truly, Income From Undisclosed Sources, Reassessment, Reference
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1983 (11) TMI 23 - MADRAS HIGH COURT
Reassessment, Reference, Wealth Tax ... ... ... ... ..... ident, is a question of law, the audit party cannot instruct the WTO as to how the assessee should be treated, and that relates to a question of law. We do not see any substance in the contention urged by the learned counsel. The audit party merely brings to the notice of the WTO, the note given by the assessee along with his wealth-tax return wherein he had claimed to be a resident, but not ordinarily resident, and that in the face of that note, the assessee cannot be treated as a non-resident. We do not see how the said question involves a question of law. In respect of other matters also, the audit party merely brings to the notice of the WTO certain omissions and commissions made by him, and the audit party cannot be said to have instructed the WTO on matters of law. In this view, we are in entire agreement with the Income-tax Tribunal when it says that the audit report would constitute information, so as to attract s. 17(1)(b) of the W.T. Act. The petition is dismissed.
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1983 (11) TMI 22 - CALCUTTA HIGH COURT
Cash Credits ... ... ... ... ..... ntention that since the payment of tax has been made on the basis of an order of assessment, no order of refund can be passed contrary to the provisions of the Act and unless the order of assessment is set aside by the appropriate authority, payment of income-tax cannot be held per se illegal in a different proceeding. In the circumstances, the impugned order of the learned District Judge is set aside. The income-tax authorities will be entitled to ask for statement of income received by the receiver from the properties under attachment and on the basis of such statement, the income-tax authorities may proceed for assessment of income-tax in accordance with law but so long as the attachment under the said Ordinance will continue, they are restrained from recovering the tax from the receiver and/or attaching or selling the aforesaid properties during the continuance of the attachment under the Ordinance. The rule is accordingly disposed of. There will be no order as to costs.
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1983 (11) TMI 21 - GUJARAT HIGH COURT
Firm, Reference ... ... ... ... ..... iz., Aswathanarayana on October 15, 1963, and admission of his widow, Mangamani, to the partnership and the execution of the new partnership deed as a result thereof. That is precisely the question which has to be found here and unless that finding is recorded, we do not think that the basic and ultimate question can be answered. The result is that we are required to adopt the course suggested by the Supreme Court in CIT v. Indian Molasses Co. P. Ltd. 1970 78 ITR 474, by declining to answer the question on the ground that the Tribunal has failed to consider and decide on correct principles the aspect of the s matter whether the firm has been dissolved or not and/or whether there was a change in the constitution of the firm. It will be open to the Tribunal to dispose of the appeal in the light of the observations made by this court after determining this aspect of the question which ought to have been decided. The reference is disposed of accordingly with no order as to costs.
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1983 (11) TMI 20 - BOMBAY HIGH COURT
Revision, Wealth Tax, Writ ... ... ... ... ..... ent case, declined to apply his own mind to the contentions urged before him but has merely followed the order passed by the Tribunal in the case of Tolaram Jalan, and, therefore, the order of the Commissioner suffers from serious infirmity. In my judgment, the submissions urged in this petition are entirely devoid of any merit. In exercise of jurisdiction under article 226 of the Constitution of India, it must be remembered that this court is not sitting as an appellate authority, and it is not open for this court to disturb the impugned order and record its own conclusion. In my judgment, the Commissioner did not blindly follow the order of the Tribunal but accepted the reasoning and the conclusions recorded by the Tribunal as correct. The order passed by the Commissioner under s. 25(1) of the W.T. Act is not appealable, and, in my judgment, it is not permissible to disturb the same in these proceedings. Accordingly, the petition fails and the rule is discharged with costs.
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1983 (11) TMI 19 - BOMBAY HIGH COURT
Capital Gains, Failure To Disclose Fully And Truly, Reassessment ... ... ... ... ..... hould be non-suited on the ground of delay and laches. I am not inclined to accede to the submission of the learned counsel for more than one reason. In the first instance, the petitioner resisted the proceedings before respondent No. 1 by challenging the jurisdiction to issue the notice and filed a fresh return. The petitioner had never submitted to the jurisdiction of respondent No. 1. Secondly, the petition is pending in this court for over five years and no purpose would be served by compelling the petitioner to approach respondent No. 2. Thirdly, the Supreme Court has concluded the controversy by the judgment referred to hereinabove, and in these circumstances it would be futile to drive the petitioner back to respondent No. 2. In my judgment, the preliminary objection raised by Shri Joshi deserves to be repelled. Accordingly, the petition succeeds and the rule is made absolute in terms of prayer (a). In the circumstances of the case, there will be no order as to costs.
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1983 (11) TMI 18 - KARNATAKA HIGH COURT
Business Expenditure, Disallowance ... ... ... ... ..... nantly by such employees does not make the flats any the less guest-houses. Nor could we accept the submission that a guest-house is a place where only total strangers are required to be accommodated and not the employees of the assessee. Guest , in its ordinary connotation refers, to a person entertained at another s premises. He may be an utter stranger to, or close friend of, the host. He may be invited or uninvited. The Indian culture makes no difference between the invited and uninvited guests. The facts that are found by the authorities below are to the effect that the flats were mainly used by the employees of the assessee-company for their stay while on tour on company s business and occasionally the flats were also used by some Government officials on payment of a uniform rate of Rs. 10 per day. The flats, therefore, have been maintained in the nature of guest-houses. In the result, we answer the question in the affirmative and against the assessee in all the cases.
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1983 (11) TMI 17 - DELHI HIGH COURT
Deduction, Other Sources ... ... ... ... ..... and later had perfected or improved it by further payment. It is on those facts that it was held attributable to capital. In the case before us, the item of expenditure is laid out for the purpose of business in the terms of the written contract between the assessee and the vendors. On a proper construction of the terms of the two, deeds, this payment of Rs. 35,000 is revenue disbursement. The payment is calculated to effect from a practical and business point of view a small expenditure as against the retention of the balance of the sale consideration after being put into possession of the entire cinema property. The Tribunal, therefore, rightly held that this payment of Rs. 35,000 was relatable to the use of the money of Rs. 15,90,000 kept by the assessee. It is in the nature of an interest or compensation on the money not paid by the assessee for the intervening period. For the above reasons, the reference is answered against the Department but with no order as to costs.
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1983 (11) TMI 16 - MADHYA PRADESH HIGH COURT
... ... ... ... ..... nding in the assessment proceedings cannot be regarded as conclusive for the purpose of penalty proceedings. In the instant case, the Tribunal appreciated the material on record afresh in the penalty proceedings and found that it was proved that there was unexplained excess of wheat stock, as found by the Food Department. The Tribunal further found that in the absence of any plausible explanation by the assessee, it must be held, in view of its aforesaid finding in the penalty proceedings, that there was conscious concealment of income by the assessee. The Tribunal thus arrived at its findings in the penalty proceedings independently of its findings in the assessment proceedings. In these circumstances, the Tribunal was justified in upholding the levy of penalty. For all these reasons, our answers to the two questions referred to this court are in the affirmative and against the assessee. In the circumstances of the case, parties shall bear their own costs of this reference.
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1983 (11) TMI 15 - DELHI HIGH COURT
... ... ... ... ..... ding to hold it, enjoys its income for some time and then sells it at a profit, it would be a clear case of capital accretion and not profit derived from an adventure in the nature of trade. The Department or the authorities under the Act did not find in this case that if was the intention of the assessee to undertake a trading adventure. The purchase and sale of land is not the assessee s line of business. The assessee did not effect any improvement on the land. The assessee had to suffer compulsory acquisition by the Delhi Administration. The mere fact that the area of land purchased was 8 bighas, 5 biswas is not sufficient to hold that the original intention of the assessee was to sell the property by parcelling out the same. From the total impression gathered from all the relevant facts and circumstances of the case, we answer the question against the Department and in favour of the assessee. On the facts and circumstances of the case, there will be no order as to costs.
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1983 (11) TMI 14 - BOMBAY HIGH COURT
Capital Asset, Capital Gains ... ... ... ... ..... operate to levy a capital gains tax on profits and gains arising from transfer of lands which are used for agricultural purposes. The court has read down sub-cl. (iii) in order to exclude from its operation lands which are used for agricultural purposes, even though such lands may be notified under sub-cl. (iii)(b). In view of this decision of the Division Bench of this court, no tax can be levied on capital gains arising from the sale or transfer of agricultural lands, although they may be notified under s. 2(14)(iii)(b) of the I.T. Act, 1961. Hence, in the present case, no tax can be levied on the sale of the lands, though covered by sub-cl. (iii)(b) of cl. (14) of s. 2 of the I.T. Act, 1961. If no tax is payable, there can be no question of payment of any interest under s. 220, sub-s. (2), of the said Act. In the premises, both the petitions are allowed. Rule is made absolute in terms of prayer (b) as amended. Respondents will pay to the petitioners costs of the petition.
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1983 (11) TMI 13 - MADRAS HIGH COURT
Estate Duty, Gift ... ... ... ... ..... laid down earlier in CED v. Viswanathan 1976 105 ITR 653 (SC) and has also in its earlier decision in CED v. Ramachandra Gounder 1973 88 ITR 448 and observed that where the donor makes a gift to his sons and using the amount gifted as capital, brings his children as partners and continues to have the benefit of the amount gifted as a partner of the firm, such benefit to the donor is referable to his membership of the partnership and it is not a benefit referable in any way to the gift but it is unconnected therewith. These decisions in CED v. Ramachandra Gounder 1973 88 ITR 448 (SC), CED v. Viswanathan 1976 105 ITR 653 (SC) and. CED v. Kamlavati 1979 120 ITR 456 (SC) have uniformly laid down the principle that unless the benefit the donor has on the amounts gifted is referable to the gift, s. 10 cannot be attracted . Following the Supreme Court decisions referred to above, we answer the question in the affirmative and against the Revenue. There will be no order as to costs.
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1983 (11) TMI 12 - DELHI HIGH COURT
... ... ... ... ..... trading asset or as part of circulating capital embarked in the business. But, if on the other hand, the foreign currency is held as a capital asset or as fixed capital, such profit or loss would be of capital nature. On the facts before us from the statement of the case and on record, it is clear that the assessee obtained loan of pounds 50,000 from M/s. Bookers Brothers McConnell and Co. convertible into equity shares. This amount of pounds 50,000 was not part of circulating capital embarked in the business of the assessee. It was a fixed capital earmarked for a particular purpose of being converted into equity shares of the borrowers M/s. Bookers Brothers McConnell and Co. The Tribunal was, therefore, justified in coming to the conclusion that it was borrowed capital. We answer the question posed for the opinion at the instance of the Department, against the Department and in favour of the assessee. On the facts and circumstances of the case, we make no order as to costs.
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1983 (11) TMI 11 - MADRAS HIGH COURT
Capital Gains ... ... ... ... ..... iew taken by the AAC, which has also been accepted by the Tribunal in the case. Admittedly, the assessee himself has been in possession of the acquired lands for a period of one year prior to the acquisition. Prior to that date, the joint family was in possession of the property holding the same for agricultural purposes. It is not in dispute that the assessee was a member of the HUF, which was found to have been in possession of the lands for agricultural purposes. In law, the possession by the HUF should be taken also to be the possession by a coparcener. Therefore, the possession by the HUF, of which the assessee is a coparcener, for a period of one year has rightly been taken as the possession by the assessee, who was then a coparcener. It is not the case of the Revenue before us that the other conditions of the said s. 54B are not satisfied. Since, we are inclined to agree with the Tribunal, no reference is called for in this case. This petition is, therefore, dismissed.
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1983 (11) TMI 10 - ANDHRA PRADESH HIGH COURT
Deduction, Disclaimer, Estate Duty, Insurance Policies, Reassessment ... ... ... ... ..... oper. The answer is against the accountable person Q Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that s. 34(3) of the Act was not applicable ? A The aggregation under s. 34 is proper. The answer is against the accountable person. It is represented in R.C. No. 159 of 1976, where an identical question was the subject of decision in CED v. Estate of Late Omprakash Bajaj 1977 110 ITR 263 (AP), in respect of which this court granted leave to appeal to the Supreme Court. The learned counsel for the assessees made an oral request for leave to appeal to the Supreme Court. While this request is not opposed as respects question No. 3 by the learned counsel for the Revenue, it was requested, leave may be restricted only to that question. It is not desirable on the facts of the case to restrict leave to some or one question. We, therefore, certify, that this is a fit case for appeal to the Supreme Court under the Act, 34 of 1953.
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1983 (11) TMI 9 - MADRAS HIGH COURT
Export Market Development Allowance, Reference, Weighted Deduction ... ... ... ... ..... ed the relief in its entirety. In respect of other items, the Tribunal has held that the assessee is not entitled to weighted deduction as these items clearly fall within the mischief of section 35B(1)(b)(iii) of the Act and these items have been specifically excluded. Here again, we find that the Tribunal is right in its construction of the provision in section 35B. Any item of expenditure by way of freight, cooly, packing, etc., will come within the expression expenditure incurred in India in connection therewith or expenditure (wherever incurred) on the carriage of such goods to their destination outside India or on the insurance of such goods while in transit . In view of the said exclusion contained in section 35B(1)(b)(iii) of the Act, the assessee cannot claim the weighted deduction in respect of the said items. The Tribunal, therefore, appears to have come to the Right conclusion in this case. Therefore, no reference is called for. The petition is dismissed. No costs
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1983 (11) TMI 8 - DELHI HIGH COURT
Special Deduction ... ... ... ... ..... early based on the material on record and cannot be termed as perverse. The Tribunal recorded the finding that the super-enamelling was done to make copper wire only with a view to fit, utilise and transfer other equipments for the generation and transmission of electricity and this process would not be essential for the use of copper wire for any other purpose. Great stress is laid by counsel on the words for no other purpose used in the statutory provisions. There is a clear finding of fact in this regard. If the finding of fact recorded was against the records, other courses were open to the department, for example, it could go in for rectification of the order or even highlight the points in the reference petition. No such course having been adopted by the Department, the finding recorded in the statement of case has to be adopted for answering the reference. We, therefore, answer the references against the Revenue and in favour of the assessee with no order as to costs.
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1983 (11) TMI 7 - KARNATAKA HIGH COURT
Advance Tax, Appeal To AAC, Appeals, Interest ... ... ... ... ..... le laid down by the Supreme Court in CIT v. Ogale Glass Works (P) Ltd. 1954 25 ITR 529. It, therefore, follows that the assessee when he tendered the cheque on March 13, 1974 itself, made a valid payment. Hence, question No. 3 should be answered in the affirmative and against the Revenue and we hold that the Tribunal s order cancelling the interest levied under section 139(8) is justified. It follows, as a consequence, that the assessee would be entitled to interest under section 214 on the excess of the tax paid as determined on the regular assessment. Hence, the first question is also answered in the affirmative and against the Revenue. As regards question No. 2, in view of the decision of this court in National Products case 1977 108 ITR 935, the appeal challenging the levy of interest, was maintainable and the Appellate Assistant Commissioner was right in entertaining the appeal on this point. All the questions are thus answered in the affirmative and against the Revenue.
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