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Showing 41 to 60 of 85 Records
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1972 (10) TMI 94
Whether the Commercial Tax Officer could have refused the refund on the ground that no application was presented by the petitioners before us within the time allowed by rule 39-A(3)?
Held that:- Appeal dismissed. This is not a fit case where we should interfere in exercise of our powers under article 136 of the Constitution.
Under rule 18 framed under the Mysore Sales Tax Act, 1957, we are informed that a dealer will have to submit his annual return within 30 days of the end of the financial year. That means even if a sale in the course of inter- State trade has been made on the 31st March of a year, the refund application will have to be made within 30 days from that date. The position will be worse still if the dealer is required to submit quarterly returns. The learned counsel for the State was not in a position to tell us whether in the Mysore State the dealers have to file quarterly returns. Thus the impugned rule is merely an attempt to deny the dealers the refund to which they are entitled under the law or at any rate to make the enforcement of that right unduly difficult.
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1972 (10) TMI 90
Whether the assessing officer under these circumstances could be said to have had an honest belief that the turnover had partially escaped taxation so as to start proceedings under section 21?
Whether the aforesaid two preliminary notices asking for the production of accounts can be taken to be notices under section 21 for the starting of the proceedings so as to warrant passing of the assessment within one year of the service thereof?
Held that:- Appeal allowed and discharge the answer given by the High Court to question No. (i). In our opinion, the assessing authority had an honest belief that the turnover of the respondent had partially escaped taxation so as to justify initiation of proceedings under section 21 of the Act. We accordingly answer the said question in the affirmative and in favour of the department. The appellant shall be entitled to the costs of this court as well as in the High Court.
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1972 (10) TMI 84
Whether the Government is competent to levy sales tax on the purchases made by the appellants of split or processed foodgrains and dal under the provisions of the United Provinces Sales Tax Act, 1948, as amended by the Uttar Pradesh Sales Tax (Amendment and Validation) Act, 1970?
Held that:- Appeal dismissed.
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1972 (10) TMI 76
Whether on the facts and in the circumstances of the case the assessee acting as commission agent was liable to pay sales tax in the years 1960-61 and 1961-62 on the turnover of khandsari sugar manufactured by his principals?
Held that:- Appeal dismissed. Khandsari sugar with which we are concerned in this case was manufactured in U.P. That being so we are in agreement with the High Court that only the sales by the manufacturers are liable to be brought to tax under the notification.
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1972 (10) TMI 55
Issues:
1. Suit for recovery of money under a promissory note.
2. Liability of company for promissory note.
3. Resolution requirement under Companies Act for borrowing money.
4. Transfer of liability under promissory note to a new shareholder.
5. Limitation period for filing suit.
Analysis:
1. The suit was filed for the recovery of a sum of Rs. 4,000 due under a promissory note executed by the 1st defendant. The plaintiff claimed that the money was borrowed for the company's benefit. The defendants resisted, arguing that the promissory note was not executed on behalf of the company. Both lower courts rejected the defense and decreed the suit in favor of the plaintiff.
2. The appellants contended that since the promissory note was not executed in the name of the company, the company should not be held liable. However, the court held that the vernacular description on the promissory note indicated it was executed on behalf of the company, relying on Section 47 of the Companies Act, 1956, and a previous Full Bench decision.
3. The appellants argued that there was no resolution by the board of directors authorizing the managing director to borrow money on promissory notes as required by the Companies Act. The court found that the memorandum and articles of association permitted borrowing by directors, and the managing director had the authority to enter into such transactions on behalf of the company.
4. It was contended that the new shareholder did not take over the liability under the promissory note, and the suit was time-barred. However, the court noted that the new shareholder had made a payment towards the promissory note and endorsed it as the managing director of the company, indicating the transfer of liability. The suit was filed within the limitation period.
5. The court dismissed the appeal, upholding the lower courts' decisions and finding no merit in the appellants' contentions. The second appeal was rejected, and no costs were awarded.
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1972 (10) TMI 54
Issues Involved:
1. Whether the plaintiffs can question the allotment of shares made by the board of directors of the company on March 10, 1967.
2. Whether the said allotment of shares is in contravention of section 81 of the Companies Act.
Detailed Analysis:
Issue 1: Questioning the Allotment of Shares
The plaintiffs, former directors of the defendant company, sought recovery of sitting fees amounting to Rs. 2,000 each. The company had allotted seven preference shares worth Rs. 700 to each plaintiff as part payment for the sitting fees, which the plaintiffs refused to accept. The company contended that the plaintiffs were estopped from questioning the allotment as they had participated in meetings where the allotment was unanimously resolved and had subsequently approved balance sheets reflecting the allotment.
The trial court found that the plaintiffs were consenting parties to the unanimous resolution passed on March 10, 1967, which allotted the shares. The court noted that the plaintiffs had not objected during subsequent meetings and had approved balance sheets showing the shares. Thus, the trial court held that the plaintiffs were bound by the allotment and could not recover the Rs. 700 adjusted for the shares.
The lower appellate court, however, reversed this decision, holding that the allotment was without the plaintiffs' application or consent and that their participation in meetings did not bind them to the allotment. The court also found the allotment in contravention of section 81 of the Companies Act.
Upon further appeal, it was argued that the plaintiffs, as creditors, had orally agreed to the allotment, which was confirmed by their conduct in subsequent meetings. The court held that the plaintiffs' continuous and consistent conduct indicated their consent to the allotment. The court referenced section 194 of the Companies Act, which states that minutes of a meeting are evidence of the proceedings, supporting the validity of the unanimous resolution. The court concluded that the plaintiffs were willing parties to the allotment and could not later question it on the ground of not having made a written application.
Issue 2: Contravention of Section 81 of the Companies Act
The lower appellate court held that the allotment of shares contravened section 81 of the Companies Act, which governs the issuance of further capital to the public. However, the appellate court found that clause 6 of the company's articles of association allowed directors to allot shares in lieu of payment for services rendered, thus not falling under section 81.
The court further noted that section 81 applies to public allotments intended to increase subscribed capital, which was not the case here. The allotment was a measure to address the company's financial difficulties by compensating creditors, who were also directors, with shares. Therefore, section 81 was deemed inapplicable.
Moreover, even if the allotment were to violate section 81, it would be voidable only at the instance of shareholders aggrieved by the non-allotment, not by those who received shares.
Conclusion:
The second appeals were allowed, setting aside the decrees and judgments of the lower appellate court and restoring those of the trial court. The plaintiffs were found bound by the unanimous resolution and the allotment of shares, and the allotment did not contravene section 81 of the Companies Act. No order as to costs was made.
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1972 (10) TMI 39
Issues:
Possession of offending goods by the petitioner, Interpretation of Rule 52A and Rule 71, Application of quasi penal provisions, Comparison with a previous judgment.
Analysis:
The judgment involves a Writ Petition where the petitioner, a purchaser of safety matches, was alleged to be in possession of offending goods due to a mixture of labels from different factories. The Central Excise Department seized the goods without inspecting the entire consignment, attributing blame to the petitioner for not segregating the goods. The respondent concluded that the goods should be deemed offending, despite the petitioner being a bona fide purchaser. The Assistant Collector passed an order confiscating the goods. The key issue was whether the petitioner had committed an offence by possessing the goods.
The judgment delves into the relevant rules governing the situation, particularly Rule 52A and Rule 71. Rule 52A mandates proper delivery of excisable goods under a gate pass, with provisions relaxed under the 'Self Removal Procedure.' The gate pass was filled by the manufacturer, and the goods had suffered excise duty. Rule 52A(5)(c) imposes penalties for false particulars in gate passes, attributing responsibility to the manufacturer, not the purchaser. Rule 71 pertains to packing methods, with Rule 71(3) obligating the manufacturer to label goods correctly. Violations of these rules are penalized under Rule 210, applicable to the manufacturer, not the purchaser.
The judgment emphasizes that penal provisions should be strictly applied, with offences fully proven before penalizing individuals. It compares the present case with a previous judgment involving deliberate evasion of excise duty through collusion between manufacturer and purchaser. In contrast, the petitioner in this case was unaware of any misdeclaration in the gate pass or labels. The court concludes that the petitioner, a bona fide owner, should not be penalized for an offence not fully established, especially when the manufacturer had already been penalized. The judgment quashes the order against the petitioner, citing an error in the application of quasi penal provisions.
In conclusion, the judgment provides a detailed analysis of the legal issues surrounding the possession of goods, interpretation of relevant rules, and the application of penal provisions. It distinguishes the present case from a previous judgment, ultimately ruling in favor of the petitioner and quashing the order against them.
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1972 (10) TMI 38
Issues Involved:
1. Assessability of interest income under the Income-tax Act, 1961.
2. Determination of the year of accrual of interest income.
3. Interpretation of relevant provisions of the Land Acquisition Act, 1894, and the Income-tax Act, 1961.
Detailed Analysis:
1. Assessability of Interest Income under the Income-tax Act, 1961:
The primary issue was whether the entire interest amounting to Rs. 31,659 received on March 1, 1964, or only a sum of Rs. 1,260 attributable to the year ending March 31, 1964, was assessable as income for the assessment year 1964-65. The Income-tax Officer held that the entire amount of Rs. 31,659 was liable to be taxed for the assessment year in question. This decision was confirmed by the Appellate Assistant Commissioner, who observed that the interest awarded under section 28 of the Land Acquisition Act, 1894, accrued only on the date of the judgment. The Tribunal, however, upheld the assessee's claim, ruling that only Rs. 1,260 was taxable for the relevant year. The High Court ultimately concluded that the entire amount of Rs. 31,659 accrued to the assessee on May 9, 1963, and thus was assessable for the assessment year 1964-65.
2. Determination of the Year of Accrual of Interest Income:
The court examined whether the interest for 26 years amounting to Rs. 31,659 or only a proportionate interest amounting to Rs. 1,260 was assessable for income-tax for the assessment year 1964-65. The court noted that the interest accrued to the assessee only when the statutorily designated authorities determined the same. The High Court passed a compromise decree on May 9, 1963, awarding the interest, which was received on March 1, 1964. The court emphasized that the right to receive the interest accrued only when the court rendered it statutorily enforceable, i.e., on May 9, 1963. Therefore, the entire amount of Rs. 31,659 was considered to have accrued in the relevant accounting year and was assessable for the assessment year 1964-65.
3. Interpretation of Relevant Provisions of the Land Acquisition Act, 1894, and the Income-tax Act, 1961:
The court discussed the scheme of the Land Acquisition Act, 1894, which provides for the acquisition of land for public purposes and the determination of compensation, including interest. Under section 28, the court can direct the payment of interest on enhanced compensation. The court also referred to section 34, which mandates the payment of interest if the compensation is not paid or deposited before taking possession of the land. The court interpreted section 5 of the Income-tax Act, 1961, which includes all income accrued during the previous year. It was held that the income is chargeable only when it accrues and not merely when it is claimable. The court cited the case of Khan Bahadur Ahmed Alladin & Sons v. Commissioner of Income-tax, which established that compensation accrues only when it becomes payable or enforceable. The court also discussed the case of Commissioner of Income-tax v. V. Sampangiramaiah, where the Mysore High Court held that interest under section 28 becomes payable when the court directs it.
In conclusion, the court ruled that the entire amount of Rs. 31,659 accrued to the assessee on May 9, 1963, when the High Court passed the decree, making it assessable for the assessment year 1964-65. The court answered the question in the affirmative, against the assessee and in favor of the department, thereby confirming the assessability of the entire interest amount received.
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1972 (10) TMI 37
Issues:
1. Depreciation allowance for double shift operation of plant and machinery.
2. Deduction of extra price payable for sugarcane purchase under the Income-tax Act.
Analysis:
1. Depreciation allowance for double shift operation of plant and machinery:
The High Court was tasked with determining whether the assessee-company was entitled to 50% of the normal depreciation on plant and machinery for double shift operation for the entire year or proportionately for the actual days worked. The court noted that the sugar mills in question operated double shifts only for certain days. The Income-tax Officer allowed extra shift allowance proportionately for the actual days worked. However, the Appellate Assistant Commissioner deemed the mills as seasonal and allowed the claim for the full year. Upon appeal, the Tribunal reversed the decision, relying on the case law of Raza Sugar Co. Ltd. v. Commissioner of Income-tax. The High Court concurred with the Tribunal, holding that the assessee was entitled to 50% of normal depreciation proportionately for the actual days worked, not for the entire year. Therefore, the court ruled in favor of the department and against the assessee on this issue.
2. Deduction of extra price payable for sugarcane purchase:
The second issue involved the deduction of extra price payable for sugarcane purchase by the assessee for the assessment year 1961-62. The Income-tax Officer disallowed the claim, considering it a provision for an anticipated liability not yet ascertained. The Appellate Assistant Commissioner overturned this decision, allowing the deduction. However, the Tribunal restored the Income-tax Officer's order. The High Court analyzed the Sugarcane (Control) Order, specifically clause 3A, which outlined the additional price payable for sugarcane purchased. The court emphasized that the liability was created by the order, with provisions for quantification and payment. The liability was not contingent on any other factor and was capable of ascertainment with reference to the order. Citing relevant case law, the court held that the liability was not uncertain or contingent but a liability in praesenti, though payable in the future. Consequently, the High Court ruled in favor of the assessee and against the department on this issue, allowing the deduction of the extra price payable for sugarcane purchase.
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1972 (10) TMI 36
The High Court of Allahabad ruled in favor of the assessee in a tax penalty case. The Income-tax Appellate Tribunal canceled the penalty order imposed under section 271(1)(c) as it was not considered to be due to fraud or neglect by the assessee. The court found the Tribunal's decision to be based on relevant considerations and upheld it. The question was answered in the affirmative in favor of the assessee, who was awarded costs of Rs. 200.
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1972 (10) TMI 35
Questions raised relate to the true construction and effect of the provisions in sections 184 and 199 of the United Kingdom Income Tax Act, 1952, in connection with the claim of the assessee concerned for relief under section 49D of the Indian Income-tax Act, 1922 - When TDS is made on the dividends received or arising outside taxable territories and no provision for relief from double taxation is available whether the provisions of section 49D are applicable - These dividend incomes had accrued in the nontaxable territories and the assessee had paid in those countries income-tax by deduction or otherwise in respect of that dividend income. There was no reciprocal arrangement for relief or avoidance of double taxation in those countries. The assessee was accordingly entitled to relief under section 49D upon calculations made in accordance with the scheme of that section.
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1972 (10) TMI 34
Assessee had advanced certain loans to a private limited company known as Virmani Refrigeration and Cold Storage Company Ltd. He was being assessed to tax on interest accruing on these loans from year to year. However, for the two assessment years 1953-54 and 1954-55, the assessee did not include any income from this source in its return. The Income-tax Officer estimated the income from interest on these two loans at Rs. 12,000 for the first year and Rs. 6,000 for the second year and taxed the assessee on interest which had accrued to him, even if it was not received, during the assessment years in question - When assessee follows mercantile system of accounting whether interest accrued but not received can be included in the income
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1972 (10) TMI 33
Issues Involved:
1. Whether development rebate can be allowed on reconditioned machinery imported into India and used for the first time.
2. Whether the assessee's industrial undertaking was not formed by the transfer of previously used machinery or plant, within the meaning of section 15C(2)(i) of the Indian Income-tax Act, 1922.
3. Whether the machinery worth Rs. 2,68,515 was new machinery within the meaning of section 10(2)(vib) of the Indian Income-tax Act, 1922.
Issue-wise Detailed Analysis:
1. Development Rebate on Reconditioned Machinery
The primary issue was whether development rebate could be allowed on reconditioned machinery imported into India and used for the first time. The Income-tax Officer initially disallowed the development rebate for the entire sum of Rs. 2,68,515, despite acknowledging that the rebate should be granted for reconditioned machinery worth Rs. 2,68,514.63 minus Rs. 20,014.10 for ineligible items. The Appellate Assistant Commissioner noted the inconsistency but did not alter the computation, citing that the assessee did not meet the mandatory conditions under section 10(2)(vib) of the 1922 Act, which required the machinery to be new and a development rebate reserve of 75% to be created. The Tribunal, however, held that the term "new" should be interpreted as machinery on which no development rebate had been allowed previously, thus allowing the rebate for the reconditioned machinery.
2. Formation of Industrial Undertaking and Transfer of Previously Used Machinery
The first question of law was whether the assessee's industrial undertaking was not formed by the transfer of previously used machinery or plant, within the meaning of section 15C(2)(i) of the Indian Income-tax Act, 1922. This question was answered in favor of the assessee in the order dated May 3, 1971, and was not further discussed in the current judgment.
3. New Machinery Definition under Section 10(2)(vib)
The Tribunal had to determine if the machinery worth Rs. 2,68,515 was new within the meaning of section 10(2)(vib) of the Indian Income-tax Act, 1922. The Tribunal, following the Supreme Court's decision in Cochin Company v. Commissioner of Income-tax, concluded that reconditioned machinery could be considered new if it involved substantial reconditioning. The Tribunal identified twelve items of machinery and concluded that six items (a) to (f) were new, while item (h) was not. The High Court, however, found that only items (a) to (c) and (h) met the criteria set in Cochin Company's case, thus qualifying for the development rebate. Items (d), (e), and (f) did not meet the criteria as the reconditioning was not substantial enough.
Conclusion:
The High Court concluded that items (a) to (c) and (h) should be treated as new machinery and thus eligible for development rebate, totaling Rs. 1,19,789.78. The contention that the assessee had not created an adequate reserve as required under section 10(2)(vib) was not accepted, as this issue was not referred for the court's opinion. Consequently, the second question was answered in favor of the assessee and against the department. No order as to costs was made due to the divided success.
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1972 (10) TMI 32
Estate Duty Act, 1953 - When, for the Wealth-tax Act, valuation of unquoted shares as on 31st March, 1967, has to be done in accordance with the Wealth-tax (Amendment) Rules, 1967, taking the last Published balance-sheet as on 31st December, 1966, as the basis, whether the Tribunal is right in placing the same value as on September 11, 1967, the date of the death of the deceased for the purpose of estate duty assessment resulting in non-consideration of other items not covered by the Wealth-tax Rules going into the determination of the value of shares for estate duty purposes ? " - When no matter of valuation of unquoted share was described under Estate Duty Act, whether the valuation can be made as per Wealth-tax Act
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1972 (10) TMI 31
"Whether on a true interpretation of the order dated the 8th October, 1963, passed by departmental authorities with reference to the assessee's application, the penalties levied under section 221(1) of the Income-tax Act, 1961were valid ?" hold that the Income-tax Officer has passed the order dated October 8, 1963, only under section 220(6) of the Act and the same can be operative only till the disposal of the appeals before the Appellate Assistant Commissioner, and the Income-tax Officer, in the present case, is perfectly entitled to impose penalty under section 221(1) of the Act for non-payment of the arrears of tax - our answer to the question must be in the affirmative and in favour of the department. If there are any other grounds raised in the appeal by the assessee before the Appellate Tribunal, it is open to the Tribunal to pass appropriate orders in that regard
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1972 (10) TMI 30
Company conducting kuries or chits - “1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the income derived by the assessee is exempt under section 11(1)(a) of the Income-tax Act. 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that setting apart reserves under article 39 of the assessee's memorandum did not vitiate the charitable purpose of the institution? - writ petitions are allowed and the relevant notices sought to be quashed in the petitions are quashed
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1972 (10) TMI 29
This is a petition under section 561-A of the Code of Criminal Procedure filed for quashing the proceedings in C.C. No. 336 of 1971 on the file of the District Magistrate's Court, Quilon, initiated at the instance of the Income-tax Officer under section 227 - assessee filed his return of income after 1st April, 1962 for the AY 1961-62 - assessment was made under Income-tax Act, 1961 and penalty was levied for concealment - Whether prosecution under section 277 of Income-tax Act, 1961 is possible and whether section 28(4) of Indian Income-tax Act, 1922 would be applicable
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1972 (10) TMI 28
Dispute is confined to the question whether the profits accruing on the sale of two patlas of gold were assessable to tax - Whether Commissioner is bound to give personal hearing to an assessee in disposing of provision petition under section 33A(2)
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1972 (10) TMI 27
" Whether the income from the lease of the Kohinoor Cinema building, which had been equipped as a cinema theatre, is assessable under section 12 of the Indian Income-tax Act, 1922, or under section 9 of that Act? " and " Whether the mortgage interest allocated to the building, K (Rs. 28,052 and Rs. 31,583, as the case may be), is an admissible deduction under section 9(1)(iv) in computing the assessee's income from the two properties (other than ' the building, K ') for the assessment years 1958-59 and 1959-60 ? " Our answer to the first question is that the income from the lease of the Kohinoor Cinema building which has been equipped as a Cinema Theatre is assessable under section 12 of the Indian Income-tax Act, 1922. So far as the second question is concerned, it is answered in the affirmative.
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1972 (10) TMI 26
Issues Involved:
1. Jurisdiction and legality of including foreign property in the estate duty assessment.
2. Discrimination and violation of Article 14 of the Constitution.
3. Excessive delegation of legislative power to the Central Board.
4. Validity of Rules 7(c) and 8(h) of the Estate Duty Rules, 1953.
Analysis of Judgment:
1. Jurisdiction and Legality of Including Foreign Property:
The petitioner argued that the deceased's interest in the foreign firm should be treated as "foreign property" and excluded from charge under the Estate Duty Act, 1953. The court examined Section 5 and the definition of "property" in Section 2(15) of the Act, concluding that Section 5 covers all properties, whether situated in India or abroad. Section 21(1) provides exemptions for foreign immovable property and foreign movable property if the deceased was not domiciled in India at the time of death. The court rejected the petitioner's contention that Section 5 should be limited to properties in India, stating that Parliament has the competence to legislate on properties situated outside India if there is a sufficient nexus, such as the domicile of the deceased.
2. Discrimination and Violation of Article 14:
The petitioner contended that Section 21 discriminates between foreign movable and immovable properties based on the domicile of the deceased, violating Article 14 of the Constitution. The court held that the classification between movable and immovable properties situated outside India is valid and does not contravene Article 14. The court emphasized that Parliament has the latitude to select properties for taxation and exemption. The court also noted that the principles of private international law support the imposition of estate duty on movable property based on the domicile of the deceased.
3. Excessive Delegation of Legislative Power:
The petitioner argued that Sections 21(2) and 85(1), which empower the Central Board to frame rules for determining the nature and location of assets, constitute an excessive delegation of legislative power. The court disagreed, stating that the nature and locality of assets can vary, and it is reasonable for the statute to leave these determinations to be made through rules. The court found that the rules framed by the Central Board are consistent with general law and international principles, and therefore, do not constitute excessive delegation or arbitrariness.
4. Validity of Rules 7(c) and 8(h):
The petitioner challenged Rules 7(c) and 8(h) of the Estate Duty Rules, 1953. Rule 7(c) treats a partner's share in a partnership as movable property, even if the firm owns immovable property. Rule 8(h) deems the share to be situated where the principal place of business is located. The court upheld these rules, citing Supreme Court precedents that a partner's interest in a partnership is considered movable property, regardless of the firm's assets. The court found that these rules align with established legal principles and do not suffer from excessive delegation.
Conclusion:
The court dismissed the writ petition, upholding the inclusion of the deceased's share in the foreign firm in the estate duty assessment. The court found no violation of Article 14, no excessive delegation of legislative power, and validated Rules 7(c) and 8(h) of the Estate Duty Rules, 1953. The petitioner's contentions were rejected, and the assessment order was deemed lawful and within jurisdiction. The petitioner was ordered to pay costs of Rs. 250.
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