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Showing 261 to 280 of 301 Records
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2002 (6) TMI 41
Issues:
1. Whether the Tribunal was correct in upholding the order allowing contingent liability as an expenditure?
2. Whether the Tribunal was correct in deleting the addition of contingent liability for computation of book profit?
3. Whether additional tax is imposable when total taxable income is a loss?
Issue 1: Contingent Liability as an Expenditure
The case involved an appeal by the Revenue against the order of the Income-tax Appellate Tribunal regarding the treatment of a contingent liability as an expenditure. The assessee claimed an amount paid to the Assam State Electricity Board (ASEB) as advance for a contingent liability, which was later confirmed as a liability. The Assessing Officer disallowed the deduction, but the first appellate authority allowed it based on the Supreme Court's ruling that discounted contingent liabilities can be considered as trading expenses if ascertainable. The High Court agreed with this interpretation, emphasizing that the liability was quantified and paid, making it deductible.
Issue 2: Deletion of Contingent Liability for Book Profit Computation
The Tribunal upheld the deletion of the contingent liability from the book profit computation under section 115JA of the Income-tax Act. The Revenue argued that the liability should be added back for computation, but the Tribunal found that the liability arose during the relevant year and was paid, thus allowing its deduction. The High Court concurred with the Tribunal's decision, stating that the liability was sufficiently certain and could be deducted from the gross receipts.
Issue 3: Imposition of Additional Tax on Loss
The Revenue also challenged the deletion of additional tax imposed under section 143(1A) of the Act. The appellate authority held that charging additional tax was unjustified as the income was at a loss after adjustments. The High Court referred to previous rulings by the Supreme Court and various High Courts, supporting the allowance of liabilities accrued during the accounting period, even if disputed or challenged. The High Court dismissed the appeal, stating that the law was settled in favor of the assessee based on the principles laid down by the apex court and other High Courts.
In conclusion, the High Court dismissed the Revenue's appeal, upholding the Tribunal's decision to allow the contingent liability as an expenditure and delete it from the book profit computation. The court also ruled against imposing additional tax on the assessee, citing established legal principles regarding accrued liabilities and deductions for expenses incurred during the relevant accounting period.
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2002 (6) TMI 40
Issues involved: Appeal against the order of the Income-tax Appellate Tribunal dismissing the appeal by the assessee.
Adjournment Issue: The Appellate Tribunal refused adjournment after multiple previous adjournments requested by the assessee's counsel. The Tribunal found the repeated adjournments were at the request of the assessee's counsel and proceeded to hear the appeal on the merits due to the absence of the counsel on the scheduled date. The court held that the Tribunal was justified in not granting adjournment as the case had been adjourned more than 11 times, and the conduct of the assessee's counsel was not satisfactory. The Tribunal's decision to proceed with the case on its merits was upheld, stating that filing a letter seeking adjournment does not guarantee an adjournment as a matter of right.
Merits of the Case - Debt Write-Off: The assessee failed to establish that the debt written off had become bad. The Commissioner of Income-tax (Appeals) found the write-off not bona fide as steps for debt recovery were not taken by the assessee, and payments were received towards the debt during the accounting year, indicating the debt had not genuinely turned bad. The court agreed with the Tribunal's view that the assessee did not prove the debt had become bad.
Merits of the Case - Addition of Rs.1,25,000: The assessee could not explain the unexplained cash balances, specifically the source of Rs.1,25,000. Despite several opportunities, the assessee failed to establish the origin of this sum. The court found that the findings on both issues were factual, and no substantial question of law arose for interference. Consequently, the appeal was dismissed with no costs incurred.
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2002 (6) TMI 39
"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs.9,82,068 being the amount received under the arbitration award for the work done in connection with the feeder canals for the Farakka Barrage Project during the period January 1, 1966 to September 30, 1969, was not a revenue receipt but only a capital receipt in the hands of the assessee? - 2. Whether, on the facts and in the circumstances of the case the Appellate Tribunal was right in holding that the source being the work executed by the firm and that as it passed on to the assessee, Shri J.H. Tarapore in terms of the settlement deed, it can only be an application of income?" - we would answer the questions referred against the assessee and in favour of the Revenue.
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2002 (6) TMI 38
Kar Vivad Samadhan Scheme, Search And Seizure, Assessment Based Search - The petitioners in these petitions are assessees under the provisions of the Income-tax Act, 1961 - In these petitions they have called in question the correctness of the communication dated March 24, 1999, a copy of which has been produced as annexure D along with the writ petitions wherein the claim of the petitioners that they are liable to pay tax at 30 per cent. and not at 40 per cent. as determined under the Kar Vivad Samadhan Scheme, 1998 (hereinafter refer red to as "the Scheme"), came to be rejected. They also prayed for a direction to the respondent to modify the tax demanded in the certificate issued under section 90(1) of the Scheme and to restrict the tax liability of the petitioners only at 30 per cent. - these petitions are liable to be rejected. Accordingly, they are rejected.
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2002 (6) TMI 37
Appeal To High Court, Appeal To Appellate Tribunal, Powers Of Tribunal - issue of cost of construction of the Nataraj Cinema hall - From the second successful Departmental appeal of the assessee, the Income-tax Appellate Tribunal was approached by the Department; it has ultimately opined that, considering both sides of the case, the estimate of the valuation of the cinema hall should be Rs.25,00,000. - The question is basically a question of fact only. Under section 260A, for admission, we need not only a question of law, but a substantial one; that is essential for entertainment of appeal and further protracting the proceedings.
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2002 (6) TMI 36
Refund, Interest On Refund - whether the amount kept in simpliciter deposit with the Revenue authorities without being appropriated towards the tax due of an assessee would be liable to attract interest for the period it was lying in deposit? - we are of the view that the learned single judge was right in his conclusion that no interest was payable on the excess amount held in the hands of the Revenue as deposit for the period from July 6, 1987 to February 17, 1989. We see no error in the judgment. There is no substance in the appeal. The appeal is dismissed.
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2002 (6) TMI 35
Capital Or Revenue Receipt, Accrual - "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding the sum of Rs. 97,94,949 being the amount received under the arbitration award for the work done in connection with the feeder canals for the Farakka Barrage Project during the period from January 1, 1967 to September 30, 1969, was not a revenue receipt but only a capital receipt in the hands of the assessee, Shri J. H. Tarapore, and, therefore, exempt from tax? - 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the source being the work executed by the firm, the income accrued to the firm and that as it passed on to the assessee Shri J.H. Tarapore, in terms of settlement deed it can be only in application of income?" - "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that a sum of Rs. 28,99,484 represents the income of the assessee? - 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the above receipts are revenue in nature and cannot be characterised as a windfall or casual receipt falling under section 10(3) of the Income-tax Act, 1961?"
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2002 (6) TMI 34
Business Expenditure, Company - "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the expenditure incurred on the foreign tour of a wife of the director of a company is not an allowable deduction under the Income-tax Act, 1961?" - we do not think that any interference is called for, with the concurrent findings of fact arrived at by the assessing authority, the appellate authority and the Tribunal that no materials are available to establish that the expenditure incurred on the foreign tour of the wife of the director of the assessee-company was for its business purposes. We answer the question referred, against the assessee and in favour of the Department.
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2002 (6) TMI 33
Business Expenditure, Ex-gratia Payment, Revenue Expenditure - "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the expenditure of Rs.3,70,755 incurred by the assessee as retirement compensation was for maintaining good relations with the employees and for the welfare of the employees and hence allowable as revenue expenditure?" - we are of the view that the deduction claimed by the company would not fall under section 36(1)(v) of the Act, but would be in the nature of revenue expenditure wholly and exclusively for the purposes of the business. In that view of the matter, in our view the decision arrived at by the Commissioner of Income-tax (Appeals) as well as by the Income-tax Appellate Tribunal cannot be faulted and the Tribunal was justified in coming to the conclusion in the facts and circumstances of the case that the expenditure of Rs.3,70,755 incurred by the assessee as retirement compensation was allow able as revenue expenditure.
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2002 (6) TMI 32
Deduction Of Tax At Source, Commission Or Brokerage, Stamp Vendors - The petitioner is a registered association of the stamp vendors of Ahmedabad. As the officers of the Income-tax Department called upon the State Government to deduct tax at source under section 194H on commission or brokerage to the persons carrying on the business as "stamp vendors", the petitioner-association has approached this court with a prayer to quash and set aside the communication at annexure D collectively, and for a declaration that section 194H of the Act is not applicable to an assessee carrying on business as a stamp vendor. - we uphold the contention urged on behalf of the petitioner's association that the discount made available to the licensed stamp vendors under the provisions of the Gujarat Stamps Supply and Sales Rules, 1987, does not fall within the expression "commission" or "brokerage" under section 194H of the Income-tax Act, 1961
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2002 (6) TMI 31
Depreciation, Extra Shift Allowance, Hotel - "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in rejecting the claim for extra shift allowance in respect of the plant and machinery used in the lodging section?" - We answer the question referred in favour of the assessee and against the Revenue
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2002 (6) TMI 30
Firm - "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that firm, Suleman Khan and Mahaboob Khan and Co., Tobacco Exporters, Guntur, was entitled to claim registration for the relevant assessment years 1975-76, 1976-77 and 1977-78?" - The provisions of section 11(2) of the Companies Act must be read in the context of and in harmony with sections 4 and 30 of the Partnership Act. The assumption of the department that the word "person" occurring in section 11(2) of the Companies Act takes in a minor also as a partner in a partnership was based on erroneous view of the law. As pointed out supra, the provisions of section 184(3) of the Act which provide that the application for registration should be signed by all the persons (not being minors), clearly suggests that under the Income-tax law, no minor can be a partner in a partnership firm as such. - we answer the question referred to us in the affirmative in favour of the assessee and against the Revenue.
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2002 (6) TMI 29
Deduction Of Tax At Source, Deduction From Rent, Interpretation Of Taxing Statutes - even accepting that the obligation to effect TDS creates hardship, financial inconvenience to the first petitioner, even then, that circumstance itself cannot be a valid or legal ground to take out the payments received by the payee from the patrons for use of the hotel rooms in pursuance of agreements between them from the purview of "rent" as defined in the Explanation to section 194-I. If TDS results in hardship, financial burden on the recipient, Parliament itself has made the provision in section 197 for obtaining a certificate for deduction at lower rate or no deduction of income-tax. Section 197 of the Income-tax Act relating to certificate for deduction of income-tax at lower rate or for no deduction of income-tax in appropriate cases has been amended to include income by way of "rent" within the scope of the said section. Therefore, it is open for the first petitioner to make necessary application under section 197 if there is any justification or hardship for it to do so. In conclusion, we hold that the charges paid to the first petitioner-company by its customers like respondents Nos. 4 and 5, for use and occupation of the hotel rooms should be regarded as "rent" within the meaning of section 194-I of the Act.
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2002 (6) TMI 28
Income From Undisclosed Sources, Burden Of Proof - "(a) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the loan of Rs.1,12,500 received from R.S.K. Shanmugavel is the undisclosed income of the appellant? - (b) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in confirming the addition of Rs.14,572.50 which was the appellant's savings as undisclosed income of the appellant? - (c) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in not deleting the addition of Rs.1,12,500 and Rs.14,572.50 representing the alleged undisclosed income of the appellant and in not allowing the appellant's appeal in full?" - We do not find any error of law, much less a substantial error of law in the matter and, therefore, would proceed to dismiss the appeal in limine.
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2002 (6) TMI 27
Reassessment, Condition Precedent - notices under section 148 - petitioner, challenges the said notices on the ground that the requirements under section 147 have not been satisfied and therefore, such notices issued after the expiry of four years from the end of the relevant assessment year in each case, are time barred as in the present case for each of the years there was assessment under sub-section (3) of section 143 of the Income-tax Act. - I am of the opinion that in the absence of satisfaction of one of the statutory requirements as contained in section 147, the notices impugned under section 148 cannot be held to be valid as they were issued after the expiry of four years from the last date of the concerned assessment year and there was an assessment under section 143(3) in respect of the assessee. - Therefore, the notices are barred by time in view of the provision of law as discussed hereinabove. The writ petition is allowed.
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2002 (6) TMI 26
Industrial Company, New Industrial Undertaking, Special Deduction - "(1) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in coming to the conclusion that the assessee-company was engaged in manufacturing and processing activities and was, therefore, an industrial company?" - '(2) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in coming to the conclusion that the assessee-company was entitled to relief under section 80J of the Income-tax Act, 1961?" - our answer to both the first questions is in the affirmative, i.e., in favour of the assessee and against the Revenue.
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2002 (6) TMI 25
"Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in coming to the conclusion that the assessee is entitled to exemption under section 40(3)(vi) of the Finance Act, 1983, for the residential property on the ground that the same was used for guest house and business premise?" - we are of the opinion that the Tribunal has rightly excluded the value of the property from the net wealth of the assessee. We, therefore, answer the above question in the affirmative, i.e., in favour of the assessee and against the Revenue.
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2002 (6) TMI 24
Valuation Of Assets - "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the life interest of the assessee in Suhasbhai Vadilal Family Trust No. 1 and Suhasbhai Vadilal Family Trust No. 2 has to be valued only by applying the provisions of rule 1B of the Wealth- tax Rules and not by actuarial method of valuation representing the market value of the interest in accordance with the provisions of section 7 of the Wealth-tax Act? - 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not accepting the value of life interest in Suhasbhai Vadilal Family Trust No. 1 and Suhasbhai Vadilal Family Trust No. 2 as determined by the actuary?" - we are of the opinion that the Tribunal as right in law in holding that the life interest of the applicant-assessee in the trust in question had to be valued only by applying the provisions of rule 1B of the Wealth-tax Rules and not by the actuarial method of valuation. - In view of the above discussion, our answers to both the questions are in the affirmative, that is, in favour of the Revenue and against the assessee.
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2002 (6) TMI 23
Agricultural Income-Tax (Tamil Nadu), Capital Or Revenue Expenditure, Deduction - It is not clear as to how much is the expenditure in the relevant year for maintaining the immature rubber trees and how much the expenditure for replantation. We would, therefore, choose to remand the matter back. The Tribunal will decide the expenditure which is claimed on the maintenance of immature rubber trees and would hold it as a deductible expenditure. If necessary, the Tribunal may remand the case back for deciding the extent of the allowable expenditure. - The revisions are, therefore, partly allowed
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2002 (6) TMI 22
"Whether, the amount paid as compulsory deposit under the Compulsory Deposit (Income-tax Payers) Scheme, 1974, is to be treated as exempt from wealth-tax?" - Since a specific exemption was granted by virtue of the amendment made in the Wealth-tax Act, the amount standing to the credit of the assessee as compulsory deposits would not be liable to wealth-tax. It appears that the Tribunal's attention has not been drawn to this provision when the Tribunal has decided the matter following the decision of the Delhi Bench in the case of WTO v. S. D. Nargolwala. In any case, the view taken by the Tribunal does not call for any interference by this court for the reasons stated hereinabove. - We, therefore, answer the question referred to us
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