Home Case Index All Cases Income Tax Section Wise 1987 1987 (1) This

Law	-- All -- GST Income Tax Benami Property Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy FEMA Law of Competition PMLA Service Tax Central Excise CST, VAT & Sales Tax Wealth tax Indian Laws
Court	-- Any -- Supreme Court SC Orders / Highlights High Court Appellate Tribunal Tribunal Appellate authority for Advance Ruling Advance Ruling Authority National Financial Reporting Authority Competition Commission of India ANTI-PROFITEERING AUTHORITY Commission Central Government Board DISTRICT/ SESSIONS Court Commissioner / Appellate Authority Other
Citation	--Year-- 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970 1969 1968 1967 1966 1965 1964 1963 1962 1961 1960 1959 1958 1957 1956 1955 1954 1953 1952 1951 1950 Upto 1949 - -Volume- 1 2 3 4 5 6 7 8 9 10 11 12 -
Landmark	Nil - N/A Referred in >= 2 Cases Referred in >= 4 Cases Referred in >= 5 Cases Referred in >= 10 Cases Referred in >= 15 Cases Referred in >= 25 Cases Referred in >= 50 Cases Referred in >= 100 Cases
Order by	TMI Citation Date of Decision

Advanced Search Options

Case Laws

Showing 281 to 300 of 315 Records

• 1987 (1) TMI 35
  
  The High Court of Delhi dismissed Wealth-tax Case No. 70 of 1983. For Wealth-tax Cases Nos. 71 to 73 of 1983, the Tribunal was directed to consolidate the case for the assessment years 1976-77 to 1978-79 and refer a specific question to the court. Wealth-tax Cases 70 to 73 of 1983 were disposed of with no order as to costs.

  ---

• 1987 (1) TMI 34
  
  The High Court of Delhi directed the Tribunal to refer a question on Wealth-tax Act exemption to the court based on previous decisions. The applications by the Commissioner of Wealth-tax were disposed of with no costs. (Case Citation: 1987 (1) TMI 34 - DELHI High Court)

  ---

• 1987 (1) TMI 33
  
  Issues:
  1. Assessment order time bar under section 153 of the Income-tax Act, 1961.
  2. Accrual of interest income for the assessment year 1967-68.
  3. Ownership of cinema and related assets for depreciation.
  4. Capital or revenue expenditure on construction and assets.
  5. Interpretation of rule 6C(3) of the Income-tax Rules, 1962, and section 37(3) of the Income-tax Act, 1961.
  6. Disallowance of guest house expenses post-August 10, 1966.
  7. Appeal against penal interest levy under sections 139 and 215 of the Income-tax Act.
  
  Analysis:
  1. The court addressed the issue of the assessment order's time bar under section 153 of the Income-tax Act, 1961. The Tribunal justified that the order did not become time-barred due to Explanation (1) to the said sub-section. The court relied on past decisions and ruled against the assessee, favoring the Revenue.
  
  2. The question of interest income accrual for the assessment year 1967-68 was examined. The court considered past judgments and concluded in favor of the Revenue, stating that the interest income had indeed accrued and arisen in favor of the assessee in the relevant previous year.
  
  3. The issue of ownership of a cinema and related assets for depreciation was deliberated. The court referred to previous decisions and ruled against the assessee, supporting the Revenue's stance on the interpretation of the terms of the agreement and consent decree.
  
  4. Regarding the nature of expenditure on construction and assets, the court discussed whether it constituted capital or revenue expenditure. The Tribunal rejected the assessee's alternative contention, and the court, based on past rulings, sided with the Revenue.
  
  5. The court analyzed the interconnection between rule 6C(3) of the Income-tax Rules, 1962, and section 37(3) of the Income-tax Act, 1961. It emphasized the conditions prescribed under the rule for allowable deductions, supporting the Tribunal's view on the requirements for claiming deductions.
  
  6. The court evaluated the total disallowance of guest house expenses incurred post-August 10, 1966. It upheld the Tribunal's decision, stating that the assessee could claim deductions only if the requirements of rule 6C(3) were met.
  
  7. The issue of appealing against the levy of penal interest under sections 139 and 215 of the Income-tax Act was discussed. The court referred to relevant decisions and ruled in favor of the assessee, contrary to the Tribunal's decision, allowing an appeal against the penal interest levy.
  
  In conclusion, the court ruled in favor of the Revenue on issues 1, 2, 3, 4, 5, and 6, while favoring the assessee on issue 7, with no order as to costs.

  ---

• 1987 (1) TMI 32
  
  Issues Involved:
  1. Deduction of surtax payable under the Companies (Profits) Surtax Act, 1964, as business expenditure u/s 37 of the Income-tax Act, 1961.
  
  Judgment Details:
  - The judgment was delivered by M. N. Rao J. based on a reference made by the Income-tax Appellate Tribunal, Hyderabad, u/s 256(1) of the Income-tax Act, 1961.
  - The question referred was whether the assessee is entitled to deduction of surtax payable under the Companies (Profits) Surtax Act, 1964, as business expenditure u/s 37 of the Income-tax Act, 1961, or as expenditure incidental to the carrying on of the business deductible u/s 28 of the Income-tax Act.
  
  Contentions Raised:
  1. The profits received by the assessee could not be treated as income due to the doctrine of overriding title.
  2. The surtax paid constitutes expenditure incidental to business and should be deductible u/s 37(1) of the Income-tax Act.
  
  Arguments Presented:
  - The Revenue contended that the surtax paid cannot be deducted as it falls within the ambit of section 40(a)(ii) of the Income-tax Act.
  - The doctrine of overriding title in favor of the State was deemed untenable as the liability to pay surtax arises only after the computation of total income under the Income-tax Act.
  
  Legal Analysis:
  - The Companies (Profits) Surtax Act, 1964, imposes a special tax on the profits of certain companies, with chargeable profits being determined based on the total income of the assessee under the Income-tax Act.
  - Section 40(a)(ii) of the Income-tax Act excludes any sum paid on account of any rate or tax levied on the profits or gains of any business or profession, which includes surtax paid.
  - The doctrine of overriding title does not apply as the liability to pay surtax arises after the computation of total income under the Income-tax Act.
  
  Precedent and Decision:
  - The Calcutta High Court and Karnataka High Court held that surtax is not diverted to the State by an overriding title and cannot be deducted as business expenditure.
  - Following the decisions, the High Court ruled in favor of the Revenue, stating that the surtax paid cannot be deducted as business expenditure.

  ---

• 1987 (1) TMI 31
  
  Issues Involved:
  The issue involved in this case is whether the assessee's letter dated July 16, 1971, amounted to an admission of concealment of income of Rs. 60,000.
  
  Judgment Details:
  
  The High Court of Bombay, in a reference under section 256 of the Income-tax Act, 1961, considered the case where the assessee's letter offered credits in respect of hundi loans for taxation, stating the amount of Rs. 60,000 for taxation and mentioning that the penalty may be decided on merits. The Income-tax Officer initiated penalty proceedings under section 271(1)(c) based on this letter. The Inspecting Assistant Commissioner imposed a penalty of Rs. 10,000, which was challenged before the Income-tax Appellate Tribunal.
  
  The Tribunal accepted the assessee's contention that the letter did not amount to an admission of concealment of income. It was argued that the wording in the letter did not imply acceptance of Rs. 60,000 as concealed income. The Tribunal, relying on precedents, quashed the penalty order, citing the decision in CIT v. Anwar Ali [1970] 76 ITR 696 (SC) and Gumani Ram Siri Ram v. CIT [1972] 85 ITR 67 (Punjab and Haryana High Court).
  
  The Revenue contended that the letter implied an admission of concealment of income, as evidenced by the statement regarding the penalty in the letter. However, the Court found the Tribunal's view reasonable and declined to interfere with the order. The Court held that the submission by the Revenue was too technical and upheld the Tribunal's decision to quash the penalty order. The question was answered in the negative, against the Revenue, with no order as to costs.

  ---

• 1987 (1) TMI 30
  
  Issues:
  Jurisdiction of Inspecting Assistant Commissioner to impose penalty under section 271(1)(c) read with section 274(2) - Amendment of section 274(2) - Relevant date for determining the authority to impose penalty.
  
  Analysis:
  The High Court of Bombay was tasked with determining whether the Inspecting Assistant Commissioner had the jurisdiction to impose a penalty under section 271(1)(c) read with section 274(2) in a specific case concerning the assessment year 1966-67. The Income-tax Officer initiated penalty proceedings and referred the case to the Inspecting Assistant Commissioner to determine the quantum of penalty. However, a crucial aspect was the timing of this reference, as the minimum penalty imposable had significantly changed between the assessment order and the reference date due to a quantum appeal filed by the assessee.
  
  The Tribunal allowed the appeal against the penalty imposition by noting that an amendment to section 274(2) had raised the threshold for Inspecting Assistant Commissioner's jurisdiction to cases where the minimum penalty exceeded Rs. 25,000. The Tribunal considered this amendment as procedural and applicable to pending cases, leading to the quashing of the penalty. The High Court referred to previous judgments, including CIT v. Gangadas, which emphasized that the Income-tax Officer's reference to the Inspecting Assistant Commissioner was a conscious determination of jurisdiction. If the reference was made after the Inspecting Assistant Commissioner lost jurisdiction due to an amendment, the penalty imposition would be invalid.
  
  The High Court, considering past decisions, held that the relevant date for determining the authority to impose a penalty was when the Income-tax Officer decided that the penalty must be levied. In cases where the reference to the Inspecting Assistant Commissioner was made after the jurisdictional threshold had changed, the penalty imposed by the Inspecting Assistant Commissioner was deemed unlawful. Citing precedents like CIT v. Bhutani Enterprises, the Court ruled in favor of the assessee, answering the question posed in the negative and concluding that the penalty imposition was not valid in this case.
  
  In conclusion, the High Court's judgment clarified the importance of the timing of references to the Inspecting Assistant Commissioner in penalty imposition cases and highlighted the significance of jurisdictional thresholds set by relevant amendments. The decision underscored that penalties imposed beyond the jurisdictional limits are invalid, emphasizing the need for procedural compliance in tax penalty assessments.

  ---

• 1987 (1) TMI 29
  
  Issues:
  1. Applicability of amendments to sections 271(1)(c)(iii) and 274(2) of the Income-tax Act, 1961.
  2. Jurisdiction of the Income-tax Officer to impose penalty based on the provisions in effect at the time of assessment.
  
  Detailed Analysis:
  The judgment by the High Court of BOMBAY pertains to a reference under section 256(1) of the Income-tax Act, 1961, initiated by the Revenue. The case involves questions regarding the applicability of amendments to sections 271(1)(c)(iii) and 274(2) of the Act. The assessment year in question is 1959-60, where a reassessment was conducted due to undisclosed income discovered during a search in December 1964. The Income-tax Officer imposed a penalty on the assessee under sections 271(1)(a) and 271(1)(c) for late filing of return and concealing income, respectively. The penalty was challenged by the assessee before the Income-tax Appellate Tribunal, which ruled in favor of the assessee, leading to the reference before the High Court.
  
  Regarding the first question on the applicability of the amendment to section 271(1)(c)(iii) from April 1, 1968, the court heard arguments from both parties. The counsel for the respondent conceded in favor of the Revenue, and the court answered the first question in the affirmative and in favor of the Revenue.
  
  On the second issue concerning the jurisdiction of the Income-tax Officer to levy a penalty based on the provisions in effect at the time of assessment, the court relied on a Division Bench judgment of the same court. The court observed that the relevant date for determining the authority to impose a penalty is when the Income-tax Officer decided on the penalty, which in this case was February 24, 1970. As per the amended section 274(2) effective from April 1, 1971, the jurisdiction to impose a penalty was with the Inspecting Assistant Commissioner if the concealed income exceeded Rs. 25,000. The court, bound by the Division Bench judgment, answered the second question in the negative and in favor of the Revenue.
  
  In conclusion, the High Court answered the first question affirmatively and in favor of the Revenue, while the second question was answered negatively and in favor of the Revenue. The assessee was directed to pay the costs of the reference to the Revenue.

  ---

• 1987 (1) TMI 28
  
  The High Court of Bombay ruled that the amount of Rs. 15,000 received by the assessee for relinquishing his share in a partnership was exempt under section 47(ii) of the Income-tax Act, 1961. The court found that since there were only two partners and the partnership was dissolved upon the assessee's relinquishment, the exemption applied. The judgment distinguished a previous case involving more than two partners. The rule was discharged with no costs.

  ---

• 1987 (1) TMI 27
  
  Issues:
  The judgment involves issues regarding the imposition of a penalty under section 28(1)(c) of the Indian Income-tax Act, 1922, for non-disclosure of income, specifically focusing on the sustainability of the penalty order u/s 28(1)(c) for the assessment year 1950-51.
  
  Details of the Judgment:
  The case pertains to an assessee, a Hindu undivided family deriving income from various businesses, including the "Goenka Cotton Company." The controversy arose from cash credit entries in the personal account of the family's karta, Babulal, totaling Rs. 24,600 in November 1948. The Income-tax Officer added this amount to the total income, not granting relief for earned income, citing it as income from undisclosed sources.
  
  The Tribunal initially set aside the penalty order due to lack of proper hearing but later upheld a penalty of Rs. 5,000 for non-disclosure of the Rs. 24,600 amount. The Appellate Assistant Commissioner confirmed this penalty, leading to an appeal by the assessee to the Tribunal.
  
  The Tribunal considered the previous year for the undisclosed income and upheld the penalty. However, the Tribunal's decision was challenged based on the argument that the said amount of Rs. 24,600 fell outside the relevant previous year for assessment.
  
  The assessee relied on legal precedents, including the case law of CIT v. Gokuldas Harivallabhdas and CIT v. Anwar Ali, emphasizing that penalty proceedings are penal in nature and distinct from assessment proceedings. The burden of proof in penalty proceedings is on the prosecution, and the entirety of circumstances must reasonably point to deliberate concealment or furnishing of inaccurate particulars by the assessee.
  
  The High Court analyzed the facts, noting that the Rs. 24,600 amount was erroneously assessed as income from undisclosed sources for the assessment year 1950-51. Referring to the Supreme Court's decision in Baladin Ram v. CIT, it highlighted the necessity for proper assessment based on the financial year for income from undisclosed sources.
  
  In conclusion, the High Court ruled in favor of the assessee, stating that no penalty could be imposed for non-disclosure of the Rs. 24,600 income for the assessment year 1950-51 under the provisions of the Indian Income-tax Act, 1922.
  
  This judgment clarifies the legal principles governing penalty proceedings and the assessment of undisclosed income, emphasizing the importance of proper assessment based on the relevant financial year.

  ---

• 1987 (1) TMI 26
  
  Issues Involved:
  
  1. Disallowance of expenditure on hosting dinners to foreign delegation members under section 37(2B) of the Income-tax Act.
  2. Disallowance of expenditure on lunch and dinners to customers by Delhi branch under section 37(2B).
  3. Disallowance of business promotion expenses and guest house maintenance expenditure under sections 37(2B) and 37(4).
  4. Disallowance of expenditure paid to clubs for entertaining foreign guests under section 37(2B).
  5. Disallowance of expenditure on providing coffee, tea, and snacks to customers under section 37(2B).
  6. Eligibility for weighted deduction for various expenditures under section 35B(1)(b).
  
  Issue-wise Detailed Analysis:
  
  1. Disallowance of expenditure on hosting dinners to foreign delegation members under section 37(2B):
  
  The Income-tax Officer disallowed Rs. 17,056 spent on hosting dinners for foreign delegations from the USSR and GDR, considering it entertainment expenditure under section 37(2B). The Appellate Assistant Commissioner upheld this disallowance, stating it did not qualify as business expenditure. However, the Appellate Tribunal allowed the expenditure, finding it was incurred to promote business interests in an "appropriate and befitting manner." The High Court noted that the Tribunal's finding was vague and remanded the matter to the Tribunal to determine if the expenditure was extravagant or lavish and to allow a reasonable amount accordingly.
  
  2. Disallowance of expenditure on lunch and dinners to customers by Delhi branch under section 37(2B):
  
  The Income-tax Officer disallowed Rs. 2,668 spent by the Delhi branch on lunch and dinners for trade customers, considering it entertainment expenditure. The Appellate Assistant Commissioner confirmed the disallowance, but the Appellate Tribunal allowed the expenditure, noting it was not extravagant or lavish. The High Court directed the Tribunal to re-examine the evidence and determine if the expenditure was reasonable and allowable under section 37(1).
  
  3. Disallowance of business promotion expenses and guest house maintenance expenditure under sections 37(2B) and 37(4):
  
  The company claimed Rs. 1,79,155 under "business promotion expenses," including guest house maintenance for foreign guests. The Income-tax Officer disallowed Rs. 2,16,215, considering it entertainment expenditure. The Appellate Assistant Commissioner allowed Rs. 1,79,155, stating it was incurred for foreign customers' food, lodging, and other expenses. The Appellate Tribunal upheld this decision. The High Court noted that the Tribunal did not independently verify the evidence and remanded the matter for re-examination to determine if the expenditure was reasonable and allowable under section 37(1).
  
  4. Disallowance of expenditure paid to clubs for entertaining foreign guests under section 37(2B):
  
  The Income-tax Officer disallowed Rs. 893 spent on club subscriptions for entertaining foreign guests. The Appellate Assistant Commissioner confirmed the disallowance, but the Appellate Tribunal allowed the expenditure, stating it was necessary for entertaining foreign guests. The High Court upheld the Tribunal's decision, noting that the expenditure was allowable under section 37(1).
  
  5. Disallowance of expenditure on providing coffee, tea, and snacks to customers under section 37(2B):
  
  The Income-tax Officer disallowed Rs. 22,722 spent on providing coffee, tea, and snacks to customers, considering it entertainment expenditure. The Appellate Assistant Commissioner allowed the entire claim, and the Appellate Tribunal upheld this decision. The High Court agreed with the Tribunal, stating that providing coffee, tea, and snacks was a business courtesy and allowable under section 37(1).
  
  6. Eligibility for weighted deduction for various expenditures under section 35B(1)(b):
  
  The company claimed weighted deduction for several expenditures under section 35B(1)(b), including agmark charges, export licence fees, export credit guarantee insurance, subscription to export promotion councils, and translation charges. The Appellate Assistant Commissioner allowed these deductions, and the Appellate Tribunal confirmed the decision. The High Court noted that there was no evidence to support the claims for agmark charges, export licence fees, and subscription to export promotion councils. The High Court disallowed these claims but allowed the weighted deduction for export credit guarantee insurance.
  
  Conclusion:
  
  The High Court remanded the matters related to the disallowance of expenditures on hosting dinners, lunch and dinners for customers, and business promotion expenses to the Tribunal for re-examination. It upheld the decisions related to club subscriptions and providing coffee, tea, and snacks. The High Court disallowed the weighted deduction claims for agmark charges, export licence fees, and subscription to export promotion councils but allowed the deduction for export credit guarantee insurance.

  ---

• 1987 (1) TMI 25
  
  Issues Involved:
  1. Statutory exemption under the Tamil Nadu Agricultural Income-tax Act.
  2. Deduction for "pannai cultivation" expenses.
  3. Inclusion of non-agricultural income in the assessment.
  4. Application of Central Government exemption to state agricultural income-tax.
  
  Detailed Analysis:
  
  1. Statutory Exemption under the Tamil Nadu Agricultural Income-tax Act
  The Tribunal held that the petitioner had not obtained any statutory exemption under the Tamil Nadu Agricultural Income-tax Act from the Government of Tamil Nadu. The petitioner argued that since the Mutt was exempted by the Central Government from income-tax under section 10(23C)(v) of the Income-tax Act from the assessment year 1972-73, it should also be deemed exempt under the Tamil Nadu Agricultural Income-tax Act. The Tribunal rejected this contention, stating there was no provision in the Tamil Nadu Agricultural Income-tax Act enabling the Agricultural Income-tax Officer to grant such an exemption.
  
  2. Deduction for "Pannai Cultivation" Expenses
  The petitioner claimed that the entire amount of expenses incurred for "pannai cultivation" should have been allowed. The Agricultural Income-tax Officer allowed expenses only for 22,04-2/3 acres and failed to account for 165.13 standard acres of dry lands in "Sirumalai" village. The Tribunal found that the petitioner had not produced proper accounts or vouchers to substantiate the expenses. The Tribunal remanded the matter to the Agricultural Income-tax Officer for fresh verification of the claim.
  
  3. Inclusion of Non-Agricultural Income in the Assessment
  The petitioner contended that the lower authorities were unjustified in taking into account receipts from hundial agra sambhavanai and pada puja under non-agricultural income. The Tribunal observed that non-agricultural income is not taxed, but it is necessary to fix the non-agricultural income to determine the proportion of trust expenditure met from agricultural and non-agricultural income. Therefore, the Tribunal upheld the inclusion of amounts under the head "Non-agricultural income."
  
  4. Application of Central Government Exemption to State Agricultural Income-tax
  The petitioner argued that the Mutt's exemption under the Central Government's notification should apply to the Tamil Nadu Agricultural Income-tax Act. The Tribunal's observation that the petitioner had not obtained any statutory exemption from the Tamil Nadu Government was challenged. The petitioner cited the case S. K. Muthukumaraswami Thambiran v. Agrl. ITO [1978] 113 ITR 889 (Mad), where it was held that if a trust is exempt under the Central Act, no assessment is possible under the State Act for that year.
  
  The court held that the Central Government's notification exempting the petitioner from tax under section 10(23C)(v) of the Income-tax Act also applied to the Tamil Nadu Agricultural Income-tax Act. Consequently, the agricultural income derived by the trust cannot be taxed. The court concluded that if a religious or charitable trust is exempt under the Central Act, it is also exempt under the State Act for the same year.
  
  Conclusion
  The tax case revision was allowed, granting exemption on the entire income. The order of the Tribunal was set aside, and relief was granted to the petitioner for the entire income. No order as to costs was made.

  ---

• 1987 (1) TMI 24
  
  Issues Involved:
  1. Statutory exemption under the Tamil Nadu Agricultural Income-tax Act.
  2. Deduction for cultivation expenses.
  3. Inclusion of non-agricultural income in the assessment.
  4. Exemption under Central Government notification for religious or charitable trusts.
  
  Detailed Analysis:
  
  1. Statutory Exemption under the Tamil Nadu Agricultural Income-tax Act:
  The Tribunal held that the petitioner had not obtained any statutory exemption under the Tamil Nadu Agricultural Income-tax Act. The Tribunal rejected the contention that the Mutt, exempted by the Central Government from income tax under section 10(23C)(v) of the Income-tax Act, should also be exempt under the Tamil Nadu Agricultural Income-tax Act. The court observed that the Tribunal's decision was incorrect as the exemption under section 4(b) of the Tamil Nadu Agricultural Income-tax Act is tagged to the provisions of the Indian Income-tax Act. The court held that if a religious or charitable trust is exempt under the Central Act, it should be exempt under the State Act for the same year.
  
  2. Deduction for Cultivation Expenses:
  The petitioner argued that the entire amount of expenses incurred for "pannai cultivation" should have been allowed, and that dry lands in "Sirumalai" under "pannai cultivation" were not considered for fixing cultivation expenses. The Tribunal found that the petitioner had not produced proper accounts or vouchers to substantiate the expenses. The Tribunal remanded the matter to the Agricultural Income-tax Officer for verification of the claim afresh, noting that vouchers were available to prove the expenses relating to Sirumalai lands.
  
  3. Inclusion of Non-Agricultural Income in the Assessment:
  The petitioner contended that the receipts from hundial agra sambhavanai and pada puja should not be included under non-agricultural income. The Tribunal, referencing the decision in Thakur Das Shyam Sunder v. Addl. CIT [1974] 93 ITR 27 (All) [FB], observed that non-agricultural income is not taxed but is considered to determine the proportion of income received from agricultural and non-agricultural sources. The Tribunal upheld the inclusion of these amounts under non-agricultural income.
  
  4. Exemption under Central Government Notification for Religious or Charitable Trusts:
  The petitioner argued that the Mutt, being exempted by the Central Government from income tax under section 10(23C)(v) of the Income-tax Act, should also be exempt under the Tamil Nadu Agricultural Income-tax Act. The court referred to Notification No. S.O. 1921, dated April 1, 1976, which notified the Mutt for exemption from the assessment year 1972-73. The court also cited the decision in S. K. Muthukumaraswami Thambiran v. Agrl. ITO [1978] 113 ITR 889 (Mad), which clarified that if a trust is exempt under the Central Act, it should be exempt under the State Act for the same year. The court concluded that the petitioner is exempt from tax for the entire income for the assessment year, setting aside the Tribunal's order.
  
  Conclusion:
  The tax case revision was allowed, granting exemption on the entire income to the petitioner. The order of the Tribunal was set aside, and relief was granted for the entire income. There was no order as to costs.

  ---

• 1987 (1) TMI 23
  
  Issues Involved:
  1. Whether the Tribunal was justified in holding that the wealth-tax assessments for the earlier years were made on a protective basis.
  2. Whether the Tribunal was right in holding that the wealth-tax assessments for the earlier assessment years did not constitute independent evidence.
  3. Whether the Tribunal was right in law in sustaining the addition to the extent of Rs. 1,60,974 for the assessment year 1974-75.
  
  Detailed Analysis:
  
  Issue 1: Protective Basis of Wealth-Tax Assessments
  The Tribunal held that the wealth-tax assessments for the years 1966-67 to 1973-74 were made on a protective basis. The assessee argued that these assessments were made on a regular basis and fully explained the investments for the year 1974-75. The court found that the wealth-tax returns were filed simultaneously with the income-tax returns in October 1974. The wealth-tax assessments accepted the returns with an express rider stating they were without prejudice to the findings for the years 1974-75 and 1975-76. The court concluded that such acceptance does not implicitly validate the source of the disputed income, thus supporting the Tribunal's decision.
  
  Issue 2: Independent Evidence from Wealth-Tax Assessments
  The Tribunal ruled that the wealth-tax assessments did not constitute independent evidence to support the assessee's claim of possessing large funds in earlier years. The court agreed, noting that the wealth-tax assessments were accepted with a rider that they were without prejudice to the findings in the income-tax assessments for the years 1974-75 and 1975-76. This explicit qualification negates the argument that these assessments validate the source of the income in question.
  
  Issue 3: Sustaining the Addition of Rs. 1,60,974
  The Tribunal sustained the addition of Rs. 1,60,974 for the assessment year 1974-75. The court found no reason to interfere with this factual determination, noting that it was consequential to the answers to the first two questions. Since the court upheld the Tribunal's decisions on the first two issues, it also affirmed the addition for the year 1974-75.
  
  Conclusion:
  1. The court found it unnecessary to determine whether the wealth-tax assessments were made on a protective basis. The assessments were accepted with a rider that did not invalidate the income-tax assessments for 1974-75.
  2. The wealth-tax assessments do not constitute independent evidence relevant to the assessee's claim of possessing large funds in earlier years.
  3. The court upheld the Tribunal's decision to sustain the addition of Rs. 1,60,974 for the assessment year 1974-75.
  
  Separate Judgment:
  Rama Rao J. concurred with the conclusions but elaborated on the concept of protective assessment, noting its judicial evolution and its applicability. He emphasized that the wealth-tax assessments were accepted without realizing the implications and suggested that necessary steps should be taken to set aside these assessments to avoid inconsistency.

  ---

• 1987 (1) TMI 22
  
  Issues:
  1. Invocation of inherent jurisdiction to amend the complaint by adding the name of the second respondent.
  2. Filing of complaint against accused-respondents and another individual for various offenses.
  3. Dismissal of petitions to amend the complaints by the Judicial First Class Magistrate.
  4. Opposition by the accused on the ground of no provision in the Criminal Procedure Code to amend the complaint.
  
  Analysis:
  1. The petitioner invoked the inherent jurisdiction of the High Court to amend the complaint by adding the name of the second respondent, who represented the firm of the first accused. The petitioner sought to rectify the omission of properly describing the first accused as being represented by the managing partner, as it could impact the proceedings against the first accused.
  
  2. The petitioner had filed a complaint against the accused-respondents and another individual for offenses under various sections of the Indian Penal Code and the Income-tax Act. The issue arose during the arguments on petitions to quash the proceedings whether the first accused was properly represented, leading to the filing of petitions to amend the complaints.
  
  3. The Judicial First Class Magistrate had dismissed the petitions to amend the complaints, stating that such amendments cannot be made when the case is pending. However, the High Court clarified that the inherent powers under section 482 of the Criminal Procedure Code could be utilized when there is no specific provision in the Code to address a particular situation, as in this case.
  
  4. The accused opposed the petitions to amend the complaints, arguing that there is no provision in the Criminal Procedure Code for such amendments. The High Court emphasized that the omission to properly describe the first accused as being represented by the managing partner could impact the outcome of the proceedings and ordered the requested amendment to be allowed.
  
  In conclusion, the High Court allowed the petitions and ordered the requested amendment to the complaint, emphasizing the importance of properly describing the accused to ensure fair proceedings and outcomes.

  ---

• 1987 (1) TMI 21
  
  Issues involved:
  The judgment involves the following two Issues:
  1. Whether the capital gain arising from the sale of shares before January 1, 1971, is exempt from tax for the assessment year 1971-72.
  2. Whether the income from dividends on shares before January 1, 1971, was exempt from tax for the assessment year 1971-72.
  
  Issue 1: Capital Gain Exemption
  The assessee, a public charitable trust, sold shares of Bajaj Auto Ltd. before January 1, 1971, resulting in a capital gain. The Income-tax Officer included this gain in the total income. The Appellate Assistant Commissioner rejected the claim of exemption under section 11. The Tribunal held that capital gains are outside the purview of income and cannot be considered income arising from investment. However, the High Court disagreed, stating that capital gains are included in income as per section 2(24) and section 45. The Tribunal's interpretation of section 13(4) was deemed incorrect, and the capital gain was held taxable.
  
  Issue 2: Dividend Income Exemption
  The Tribunal did not address the second question regarding the exemption of dividend income based on a Supreme Court decision. The High Court concurred, stating that the Tribunal could not refer the second question as the assessee did not seek reference. The High Court emphasized that in a reference application, the court must limit itself to the questions posed. Therefore, the second question remained unanswered.
  
  In conclusion, the High Court ruled against the assessee, denying the exemption for the capital gain from the sale of shares. The court highlighted the importance of adhering to the questions raised in a reference application. No costs were awarded in this matter.

  ---

• 1987 (1) TMI 20
  
  Issues Involved: The judgment involves issues related to the validity of reopening the assessment u/s 147(a) and u/s 147(b) of the Income-tax Act, 1961, and the tax liability on capital gains received by the assessee.
  
  Reopening of Assessment u/s 147(a): The assessee relinquished his rights in land without disclosing capital gains in his returns. The Appellate Assistant Commissioner held that the assessment was not liable to be reopened under u/s 147(a) as full disclosure was made. However, the Tribunal upheld the reopening as relevant facts were not disclosed, leading to the levy on the sum of Rs. 65,000. The Tribunal also found that Rs. 75,417 received by the assessee was not taxable under section 45.
  
  Disclosure of Relevant Facts: The assessee argued that full disclosure was made before the assessment was completed, citing permission obtained under section 230A for releasing his interest in the property. The Tribunal found that the assessee did not produce documents related to section 230A during the assessment proceedings, indicating non-disclosure of crucial information regarding the relinquishment.
  
  Decision and Rulings: The Court answered question No. (1) in favor of the Revenue, stating that the reopening of the assessment u/s 147(a) was justified due to non-disclosure of crucial facts. Questions (2) and (3) were deemed irrelevant based on this decision. Question No. (4) was answered in favor of the assessee, citing a Supreme Court decision. Question No. (5) was answered in favor of the Revenue, confirming the tax liability on capital gains from the land transaction.
  
  Costs and Directions: The parties were directed to bear their respective costs in the tax referred cases. A copy of the judgment was to be forwarded to the Income-tax Appellate Tribunal, Cochin Bench for further action.

  ---

• 1987 (1) TMI 19
  
  Issues:
  1. Whether the share income of the assessee from the firm was to be shared by three persons, including the assessee and her two minor sons.
  
  Analysis:
  The judgment concerned the assessment year 1974-75 and revolved around the share income of the assessee from a firm where her late husband was a partner. After his demise, the assessee, along with her three sons and daughter, became partners in the reconstituted firm. The partnership deed specified the devolution of the deceased husband's share to his legal heirs. The assessee initially claimed only 1/3rd of the income as her share, asserting an overriding title in favor of her minor sons. However, the Income-tax Officer assessed the entire share income in the assessee's hands.
  
  On appeal, the Appellate Assistant Commissioner recognized a diversion of income by overriding title. The matter reached the Income-tax Appellate Tribunal, which found that the minor sons had a right to claim a portion of the share income received by the assessee from the firm. Citing the Hindu Succession Act, the Tribunal concluded that the income was not solely that of the assessee but also belonged to her minor sons. Consequently, the Tribunal dismissed the appeal against the Appellate Assistant Commissioner's order.
  
  The judgment referred to various legal precedents, including Supreme Court cases, to establish the principle of income diversion by overriding title. It highlighted cases where income was considered to be shared with other parties due to legal obligations or agreements. Drawing parallels with these precedents, the court emphasized that the assessee's minor sons had a legal entitlement to a portion of the share income received by the assessee from the firm. This entitlement created an overriding title, obligating the assessee to share the income with her minor sons.
  
  In line with the legal principles established in previous judgments, particularly the Supreme Court's decision in Murlidhar Himatsingka's case and the Bombay High Court's ruling in Kanoria's case, the court answered the reference question affirmatively in favor of the assessee. The judgment underscored the existence of an overriding title in favor of the minor sons, leading to the conclusion that the share income was not solely attributable to the assessee but also to her minor sons.

  ---

• 1987 (1) TMI 18
  
  Issues:
  1. Allowability of penalty under section 36(3) of the Sales Tax Act as a deduction for income tax purposes.
  
  Analysis:
  The judgment pertains to a reference under section 256 of the Income-tax Act, 1961, regarding the allowability of a penalty imposed under section 36(3) of the Sales Tax Act as a deduction. The assessee, a registered firm trading in cotton, failed to pay sales tax for the 3rd and 4th quarters, leading to the imposition of a penalty. The Income-tax Officer, Appellate Assistant Commissioner, and Tribunal all disallowed the deduction of the penalty as claimed by the assessee. The key issue revolved around whether the penalty under section 36(3) of the Sales Tax Act could be considered an allowable deduction for income tax purposes.
  
  The court examined the provisions of section 36(3) of the Sales Tax Act, which deals with the imposition of penalties for non-payment of tax without reasonable cause. The court noted that the section clearly distinguishes between tax and penalty, with provisions for the imposition of penalty being separate and distinct. The court also referred to a Supreme Court decision regarding a similar provision in another statute, emphasizing the distinction between interest and penalty. The court concluded that the penalty imposed under section 36(3) of the Sales Tax Act was indeed a penalty and not interest, thereby rejecting the assessee's argument for deduction.
  
  Furthermore, the court considered the interaction between sections 36 and 38 of the Sales Tax Act. Section 38(2) mandates the payment of tax along with any penalty payable, indicating that the penalty is distinct from the tax itself. The court emphasized that the obligation to pay the penalty upfront does not alter its character as a penalty, which can be remitted based on reasonable cause. The court also referred to a Madras High Court decision on a similar provision, highlighting the penal nature of such provisions.
  
  In determining the nature of the penalty, the court underscored the element of wilfulness in the imposition of penalties. Despite the computation of the penalty on an interest basis, the court clarified that it does not transform the penalty into interest for the purpose of deduction. Ultimately, the court ruled against the assessee, holding that the penalty under section 36(3) of the Sales Tax Act was not an allowable deduction for income tax purposes. The assessee was directed to bear the costs of the Revenue.
  
  In conclusion, the judgment delves into the distinction between tax and penalty under the Sales Tax Act, emphasizing the penal nature of penalties imposed for non-compliance. The court's analysis focused on the specific provisions of the Act, previous judicial interpretations, and the legislative intent behind penalty imposition. The ruling clarifies the treatment of penalties under tax laws and sets a precedent for similar cases involving penalty deductions.

  ---

• 1987 (1) TMI 17
  
  Issues involved: The judgment addresses two main issues: (1) Whether the Appellate Tribunal was correct in upholding the action of the Appellate Assistant Commissioner allowing relief u/s 80J of the Act, and (2) Whether the Appellate Tribunal was correct in holding that the assessee was entitled to deduction u/s 80J despite non-fulfillment of requirements of section 80J(4) and non-compliance with rule 19A.
  
  Issue 1 - Relief under section 80J:
  The Income-tax Officer initially rejected the assessee's claim for deduction u/s 80J because it was not claimed in the return. However, the Appellate Assistant Commissioner allowed the claim as it was made during the assessment proceedings. The Income-tax Appellate Tribunal upheld this decision, stating that the claim was made before the assessment was completed. The court affirmed this view, emphasizing that once a claim is made during assessment proceedings, the Income-tax Officer must consider it on merits. Therefore, the first issue was answered in the affirmative in favor of the assessee.
  
  Issue 2 - Entitlement to deduction under section 80J:
  Regarding the second issue, it was agreed by the counsels that the assessee was not entitled to deduction under section 80J due to non-compliance with section 80J(4) requirements and rule 19A. Citing the judgment in Lohia Machines Ltd. v. Union of India, the court concluded that the assessee was not entitled to the deduction under section 80J. Thus, the second issue was resolved in the negative and in favor of the Revenue.
  
  Conclusion:
  The judgment clarified that the Income-tax Officer must consider claims made during assessment proceedings and cannot reject them solely based on not being in the initial return. Additionally, it emphasized the importance of complying with the specific requirements of tax deduction provisions. No costs were awarded in this matter.

  ---

• 1987 (1) TMI 16
  
  The High Court of Bombay upheld the initiation of income tax reassessment proceedings based on notices issued by the Income-tax Officer under section 148 of the Income-tax Act. The court rejected the argument that there was ambiguity in the notices, stating that the notices were clear and the assessee had filed returns accordingly. The Tribunal's decision to set aside the notices was overturned, and the court ruled in favor of the Revenue. The Tribunal was directed to consider other grounds raised by both parties.

  ---

1 ....111213141516