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Case Laws
Showing 41 to 60 of 67 Records
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1972 (12) TMI 27
This is a petition for the issue of a writ of prohibition prohibiting the respondent from recovering the amount of the annuity deposit under the Income-tax Act, 1961, in pursuance of his notice of demand - Whether omission of annuity deposit payable before 1st April, 1967 could be assessed and recovered even after that date - We have to reject the petitioner's contention that there is no accrued liability before April 1, 1967, so as to invoke section 6 of the General Clauses Act. In this case, there being a liability to pay the annuity deposit, the Income-tax Officer was justified in issuing the demand based on the order of assessment which can also be constructed as an order under section 280K. The petition, therefore, fails and is dismissed
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1972 (12) TMI 26
Estate Duty Act, 1953 - In the writ petition the petitioner has prayed for the issue of a writ of certiorari to quash the order of the Assistant Controller of Estate Duty, dated May 21, 1966 - authorised representative who had authorisation granted during assessment proceedings appeared during rectification proceedings - Whether the authorisation holds good for subsequent rectification proceedings also
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1972 (12) TMI 25
Levy of interest under section 139(8) – treating registered firm as an unregistered one - whether advance tax paid by the registered firm is deductible - The result is that the writ petitions are allowed in part and the petitioners will be entitled to have the advance tax paid by them deducted from the total tax as determined by the respondent for purpose of calculation of interest under section 139(1), proviso. The respondent in each of these cases is directed to modify the assessment accordingly.
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1972 (12) TMI 24
Gift Tax Act, 1958 - One Appavoo Pillai made a gift of three buses to his son, Vimalan, the assessee, under a registered settlement deed - Under that deed the value, shown for the three buses was Rs. 20,000. The Gift-tax Officer found that the written down value of the buses on the date of the transfer was Rs. 31,688. He, therefore, estimated the value of the buses at Rs. 31,688. In addition he also estimated the value of the route permits on which the buses were plying at the time of the transfer at Rs. 75,000 and computed the gift-tax payable on that basis - Gift-tax Officer was justified in estimating the value of the route permits and adding them to the value of the buses
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1972 (12) TMI 23
" Whether Tribunal was right in holding that the sum of Rs. 10,225 transferred to the contingencies reserve account, the sum of Rs. 30,475 transferred to the development reserve account and the sum of Rs. 23,417 transferred to the special reserve account are not to be deducted in arriving at the taxable income of the assessee-company ?" - this amount is really laid out for the purpose of the business because it is to meet certain contingencies which a public utility concern has normally to anticipate to happen in the business and provide for. But I do not rest my final conclusion on this point applying section 37. I agree with the reasoning of my learned brother that this amount of contingency reserve must be deducted in arriving at the total income for assessment
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1972 (12) TMI 22
" 1. Whether, on the facts and in the circumstances of the case, the provisions of sections 4(1)(a)(i) and 4(1)(a)(ii) of the Wealth-tax Act, 1957, were rightly applied ; and 2. Whether the dividends of Rs. 53,809 and Rs. 12,500, respectively, declared by the company but not actually paid to the assessee prior to the valuation dates could be assessed to wealth-tax for the assessment years 1962-63 and 1963-64 ? " - we answer the first question in the negative, against the department and the second question in the affirmative, in favour of the department.
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1972 (12) TMI 21
Foreign Technician - Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the skipper of the fishing trawler is a ' technician ' as laid down in the Explanation to section 10(6)(vii) of the Income-tax Act, 1961 ?
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1972 (12) TMI 20
This reference raises a short but interesting question of law relating to the construction of section 68 of the Finance Act, 1965. - Whether liability to pay tax on concealed income under s. 68 of the Finance Act, 1965 is deductible in the computation of the net wealth
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1972 (12) TMI 19
Payment of salary to a partner of managing agency firm who was appointed as manager – Legal Expenditures - deductibility - Whether income declared by the assessee can be enhanced on the basis of the excess stock disclosed the bank for obtaining overdraft facilities - Tribunal is justified in accepting the books as correct because the entries therein tallied with the returns submitted by the assessee to the Textile Commissioner and ignoring the stock declarations made by the assessee to the banks - result is that the questions are answered in the affirmative and in favour of the assessee
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1972 (12) TMI 18
Set Off - " Whether, on the facts, and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to set off his share of loss in a business carried on by an unregistered firm against the profits of his personal business? " - question iis answered n the affirmative, in favour of the assessee and against the department - If a profit from an unregistered firm has to be added to the income of an individual partner and he has to pay tax on that amount subject to the provisions of section 14(2)(a) of the Act, there does not seem to be any reason why the same should not be held true of a loss.
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1972 (12) TMI 17
Whetherthe inclusion of the movable assets belonging to Lakshmikanthammal, the wife of the assessee, in the taxable wealth of the assessee is lawful - Whetherthe movable assets of Lakshmikanthammal, are liable to be included in the taxable wealth of the assessee in view of or having regard to section 4(4) - assessee also contends that the Tribunal has not considered the applicability of section 4(4) of the Wealth-tax Act to movable properties standing in the name of the assessee's wife, though that section was applied and relief granted in respect of immovable properties. But on the finding given by the Tribunal that the movable properties consisting of advances and investments are benami and that the assessee continued to be the beneficial owner of the same, there is no question of applying section 4(4) as there was in fact no transfer before the coming into force of the Act in relation to movable properties and the Tribunal is justified in not applying section 4(4) so far as the movable properties are concerned - Reference answered in the affirmative
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1972 (12) TMI 16
Delay in filing the return under the old act - discretion to reduce the penalty fixed by the new act - " Whether, on the facts and in the circumstances of the case, the Tribunal was in law competent to reduce the penalty levied under section 271(1)(a) to a figure lower than the sum equal to 2% of the tax for every month during which the deault continued but not exceeding in the aggregate 50% of the tax ? " - question referred to us should be answered in the negative, in favour of the revenue and against the assessee.
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1972 (12) TMI 15
Assessee, a private limited company incurred loss - whether dividends must be declared from the dividends equalisation fund - " Whether, on the facts and in the circumstances of the case, the provisions of section 23A(1) were not attracted for the assessment year 1959-60 ? " - Having regard to the facts and circumstances of this case, we are of the view that the provisions of section 23A(1) of the Indian Income-tax Act, 1922, were not attracted. The reference is accordingly answered in the affirmative and against the revenue
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1972 (12) TMI 14
Issues Involved:
1. Taxability of the grant-in-aid received by the company.
2. Nature of the receipt (capital vs. revenue).
3. Timing of the receipt in relation to the commencement of business activities.
4. Applicability of Section 4(3)(vii) of the Indian Income-tax Act, 1922.
Issue-wise Detailed Analysis:
1. Taxability of the grant-in-aid received by the company:
The primary issue was whether the grant-in-aid of Rs. 2 lakhs received by the State Trading Corporation of India Ltd. from the Government of India was chargeable to income-tax. The Income-tax Officer initially treated the amount as taxable income, arguing that the grant reduced the company's revenue expenditure, thereby increasing its profits. However, the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal both held that the grant was not taxable. The Tribunal's decision was based on two grounds: (i) the grant was received before the commencement of business, and (ii) it was a casual and non-recurring receipt exempt under Section 4(3)(vii) of the Indian Income-tax Act, 1922.
2. Nature of the receipt (capital vs. revenue):
The nature of the receipt was debated extensively. The Income-tax Officer contended that the purpose for which the grant was given (to meet administrative expenses) made it a revenue receipt. Conversely, the company argued that since the grant was received before the start of any trading activities, it should be treated as a capital receipt. The court referred to various precedents, including Ratna Sugar Mills Co. Ltd. v. Commissioner of Income-tax and Seaham Harbour Dock Co. v. Crook, to analyze whether the grant was intended to compensate for business losses or to assist in starting the business.
3. Timing of the receipt in relation to the commencement of business activities:
A critical factor was the timing of the receipt. The grant was sanctioned on 21st June 1956, before the company began its trading activities on 1st July 1956. The court emphasized that under Section 10(1) of the Indian Income-tax Act, 1922, tax is payable on profits and gains from business activities. Since the business had not commenced when the grant was received, it could not be considered a business receipt. The court stated, "if any receipt is received before the business is carried on, it is not a business receipt."
4. Applicability of Section 4(3)(vii) of the Indian Income-tax Act, 1922:
The Tribunal also held that the receipt was exempt under Section 4(3)(vii), which exempts receipts of a casual and non-recurring nature from taxation. The court agreed, noting that the grant was non-recurring and received before the business commenced. The court concluded that the grant was not taxable under this provision, stating, "The grant-in-aid received by the assessee-company was received prior to the commencement of the business and, therefore, cannot be said to arise from business; moreover, it was casual and non-recurring in nature."
Conclusion:
The court answered the referred question in the negative, ruling in favor of the assessee and against the department. The grant-in-aid was not chargeable to income-tax as it was received before the commencement of business activities and was of a casual and non-recurring nature. The court left the parties to bear their own costs, noting the novelty of the issue.
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1972 (12) TMI 13
" 1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in disallowing a sum of Rs. 7,850 paid as commission to the three parties ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in confirming the addition of Rs. 50,000 to the business in imported electric motors ? " - both the questions are answered in the affirmative and against the assessee.
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1972 (12) TMI 12
Petitioners made a voluntary disclosure of income under section 68 of the Finance Act, 1965. The tax payable on The income so voluntarily disclosed amounted to Rs. 15,55,500. The said tax was due to be paid on or before November 30, 1965, under the said section. However the tax was not paid before the said date. Subsequently, the petitioners offered to pay the said tax but the Commissioner of Income-tax declined to receive the same on the ground that the time for payment was long over - When assessee does not pay taxes with in the due date but if the sale after coming into force of Finance (No. 2) Act, 1967 whether interest can be levied for the period prior to 1/4/1967
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1972 (12) TMI 11
Petitioner has filed the petitions on the ground that section 18(1)(a) of the Act is ultra vires, illegal and invalid - The learned counsel for the petitioner submitted that section 18(1)(a), in so far as it levies penalty at the uniform rate of one-half per cent. on the net wealth assessed, is violative of article 14 ; secondly, the penalty imposed under that section is confiscatory in nature and, therefore, infringes article 19(1)(f) of the Constitution ; thirdly, any penalty for non-submission of a return should have relation to the tax payable and not to the wealth and the penalty under section 18 being not related to the tax evaded is beyond the legislative competence of Parliament
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1972 (12) TMI 10
In this writ petition the CIT, has prayed for a writ of mandamus or other appropriate writ or order directing the ITAT to take up the department appeal and rehear the appeal under section 66(5) of the Indian Income-tax Act, 1922 and decide the appeal in conformity with the judgment of this court - since the Tribunal had jurisdiction to decide the question whether the remittance could be assessed at all in the hands of the individual and it give a finding that it could be assessed the dismissal of the appeal by the Tribunal was valid, also the department did not file a reference against the dismissal it did not even file a reference against the order u/s 66(5) it therefore cannot seek belatedly relief under article 226 of the Constitution
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1972 (12) TMI 9
Whether reasons for reopening the assessment should be disclosed to the assessee - - assessee cannot compel the income-tax officer to disclose all the materials which formed the basis of notice u/s 148 before he files his return in pursuance of this notice
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1972 (12) TMI 8
Issues Involved:
1. Legality of the refusal of registration or continuance of registration of the partnership firm under section 184/185 of the Income-tax Act, 1961.
2. Validity of the partnership agreement in light of the U.P. Excise Act and Rules.
3. Interpretation of the provisions of the U.P. Excise Manual and their binding nature.
4. Implications of the breach of excise licence conditions on the legality of the partnership agreement.
5. Applicability of section 23 of the Indian Contract Act in determining the legality of the partnership agreement.
Issue-wise Detailed Analysis:
1. Legality of the Refusal of Registration or Continuance of Registration:
The court examined whether the refusal of registration or its continuance for the assessment years 1962-63 and 1963-64 was legally valid under sections 184/185 of the Income-tax Act, 1961. The Income-tax Officer refused the registration on the grounds that the partnership was illegal due to the non-compliance with the Excise Act. However, the court found that the partnership was not illegal and thus, the refusal of registration was not justified.
2. Validity of the Partnership Agreement under U.P. Excise Act and Rules:
The court analyzed whether the partnership agreement was valid under the U.P. Excise Act and Rules. The Income-tax Officer argued that the partnership was illegal as the excise licence was not transferred to the firm with the Collector's permission. The court disagreed, citing that the partnership agreement did not result in the transfer of the licence. The court held that the licence remained with the individuals, and the partnership did not violate the Excise Act or Rules.
3. Interpretation of the U.P. Excise Manual Provisions:
The court examined the nature of the provisions in the U.P. Excise Manual, specifically paragraphs 334 and 337. It concluded that these provisions were merely executive instructions and not statutory rules, as they were not published in the Official Gazette. Therefore, the provisions did not have the force of law and could not render the partnership agreement illegal.
4. Breach of Excise Licence Conditions:
The court considered whether the breach of condition No. 4 of the excise licence, which required prior approval for entering into a partnership, made the partnership agreement illegal. The court held that while the breach of this condition was punishable under section 64 of the U.P. Excise Act, it did not imply a prohibition of the partnership agreement. The imposition of a penalty did not make the contract void unless the legislature explicitly intended to prohibit such agreements.
5. Applicability of Section 23 of the Indian Contract Act:
The court analyzed whether the partnership agreement was void under section 23 of the Indian Contract Act, which states that an agreement is unlawful if it is forbidden by law. The court concluded that the partnership agreement was not forbidden by law, as the provisions of the U.P. Excise Manual were not statutory. The agreement was not against public policy, nor was it obtained by fraud. Therefore, the partnership was not illegal under section 23 of the Contract Act.
Conclusion:
The court found that the partnership in question was legal and the income-tax authorities were not justified in refusing the registration of the firm under section 184 of the Income-tax Act, 1961. The question referred to the court was answered in the negative and in favor of the assessee. The court assessed the costs of the reference at Rs. 300.
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