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Showing 41 to 60 of 114 Records
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1971 (9) TMI 113
Issues:
Jurisdiction of the court to pass orders in the application moved by the company under rule 9 of the Companies (Court) Rules and section 151 of the Code of Civil Procedure, 1908.
Maintainability of the application under any provision of the Companies Act, specifically section 402 in relation to the relief granted under sections 397, 398, and 402 of the Companies Act, 1956.
Jurisdiction Issue:
The judgment pertains to a winding-up petition where the court granted relief under sections 397, 398, and 402 of the Companies Act, 1956. The application in question sought permission for the company to avail of a sub-limit with its bankers, leading to a debate on the court's jurisdiction. The court analyzed rule 9 of the Companies (Court) Rules and section 151 of the Code of Civil Procedure, concluding that these provisions did not confer substantive rights on parties to move the court. The court referenced a previous decision by the Punjab High Court to assert that the application was not maintainable under rule 9 or section 151, Civil Procedure Code.
Maintainability Issue:
Regarding the application's maintainability under the Companies Act, the court delved into section 402, which provides for the regulation of a company's affairs post-relief under sections 397 and 398. The court highlighted that the interim board functions under court supervision until a specified time. Given that relief was granted under relevant sections and the interim management operates under court oversight, the court held it had the authority to provide directions and instructions to resolve the board's problems. The court cited a decision by the Allahabad High Court to support its stance. Ultimately, the court approved the resolution of the board of directors based on the circumstances presented in the application.
Conclusion:
In conclusion, the judgment addressed the jurisdictional aspect of the court's authority to pass orders in a company application and the application's maintainability under the Companies Act, specifically section 402. The court clarified the scope of its supervisory powers in guiding the interim management appointed by the court, emphasizing the protection of shareholders' interests. By approving the resolution of the board of directors, the court resolved the issues raised in the application, highlighting the importance of court supervision in such matters.
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1971 (9) TMI 103
Companies Law Board – Power of, Reference to Tribunal of cases against managerial personnel, Reference to Tribunal of Resignation before making of application by Central Government, makes no difference where charges are of collusion and conspiracy, Reference to Tribunal of Where materials were held to be sufficient for investigation, Powers of Central Government to remove managerial personnel on the basis of Tribunal’s decision
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1971 (9) TMI 102
Issues:
1. Whether the mandal is liable to be registered under the Bombay Public Trusts Act, 1950 as a public trust.
2. Whether a corporation, like the mandal, can act as a trustee for public religious or charitable purposes.
3. Whether the mandal's incorporation under the Companies Act exempts it from registration under the Public Trusts Act.
4. Whether the mandal's removal as a trustee would lead to the end of the trust.
Issue 1: Liability to be registered under the Bombay Public Trusts Act, 1950:
The High Court analyzed whether the mandal, a company limited by guarantee, was liable to be registered as a public trust under the Bombay Public Trusts Act, 1950. The court examined the objects clause in the mandal's memorandum of association, which included provisions for public religious and charitable purposes. It was established that the mandal acted as a trustee for the property it held to fulfill these objectives, thus meeting the criteria of a public trust under the Act. The court concluded that the mandal was indeed a trustee for public religious and charitable purposes and therefore liable to be registered under the Public Trusts Act.
Issue 2: Corporation acting as a trustee:
The judgment addressed the legality of a corporation, such as the mandal, acting as a trustee for public religious or charitable purposes. The court referred to the definition of a trust under the Indian Trusts Act, emphasizing that if a corporation can accept property ownership with obligations for the benefit of others, it can act as a trustee. The court found that the mandal's objects clauses in its memorandum of association expressly authorized it to hold property in trust for public religious and charitable purposes, supporting its role as a trustee.
Issue 3: Exemption from registration under the Public Trusts Act:
The court dismissed the argument that the mandal's incorporation under the Companies Act exempted it from registration under the Public Trusts Act. Despite being a corporation, the mandal's specific objects clauses allowed it to hold property in trust for public religious and charitable purposes, making it subject to the provisions of the Public Trusts Act. The court emphasized that the mandal's status as a trustee required compliance with the Public Trusts Act in addition to the Companies Act, without resulting in any conflict.
Issue 4: Effect of removal as a trustee on the trust:
The judgment addressed the concern raised regarding the potential end of the trust if the mandal was removed as a trustee for any breach of trust or malversation. The court clarified that the trust could continue even if the mandal was removed as a trustee, with substitute trustees appointed by the Charity Commissioner or the court. The court highlighted that the trust's continuation was independent of the mandal's status as a trustee and that the trust could persist with alternative trustees if necessary.
In conclusion, the High Court dismissed the appeal, confirming the City Civil Court's decision that the mandal was liable to be registered as a public trust under the Bombay Public Trusts Act, 1950. The judgment emphasized the mandal's role as a trustee for public religious and charitable purposes, irrespective of its incorporation under the Companies Act. The court underscored the importance of preventing potential evasion of the Public Trusts Act by corporations and reiterated that the trust could continue even if the mandal was removed as a trustee, with substitute trustees appointed to ensure the trust's continuity.
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1971 (9) TMI 89
Issues:
Winding up petition based on company's inability to pay debts and just and equitable grounds.
Analysis:
The petitioner filed a winding-up petition against the company, citing the company's inability to pay its debts and seeking a just and equitable winding up. A decree was passed in favor of the petitioner in a previous suit, requiring the company to pay a specified amount in monthly installments. The company failed to make any payments, leading to the entire amount becoming due under the default clause of the decree. The petitioner then served a notice under section 434 of the Companies Act, demanding payment, which the company failed to comply with, establishing its inability to pay debts as per section 433 of the Act.
Furthermore, the company failed to file balance sheets post-1967, ceased business activities since 1968, and had multiple court decrees against it. The petitioner claimed the company's liabilities exceeded its assets by approximately Rs. 7 lakhs, rendering it commercially insolvent. Commercial insolvency occurs when a company cannot meet its liabilities in the ordinary course of business. Given these circumstances, the court found that the company was unable to pay its debts and warranted a winding-up order on just and equitable grounds.
The respondent argued that the winding-up petition aimed to impede ongoing arbitration proceedings between the company and another entity. However, the court held that the existence of arbitration proceedings did not negate the grounds for winding up the company. The official liquidator was appointed to take charge of the company's assets and conduct the winding-up process. The costs of the petition were to be covered by the company's assets, and the winding-up order was to be publicized in the same newspapers as the initial petition advertisement.
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1971 (9) TMI 88
Issues:
1. Appointment of liquidator in contravention of Companies Act.
2. Determination of whether the appointed firm is a body corporate.
3. Interpretation of the term "body corporate" under the Act.
Analysis:
The judgment delivered by Justice Patra of the High Court of Orissa pertains to an application filed by the Registrar of Companies challenging the appointment of a firm as the liquidator of a company. The company in question had undergone members' voluntary winding-up, and a Chartered Accountant firm, Rowe and Pal, was appointed as the liquidator. The Registrar contended that this appointment was illegal and violated the provisions of the Companies Act, specifically sections 502 and 513. The key issue for determination was whether Rowe and Pal qualified as a body corporate as per the Act.
The definition of "body corporate" under section 2(7) of the Companies Act was crucial in this case. The Act excludes certain entities from the definition of body corporate, such as a corporation sole or a cooperative society. Justice Patra highlighted that corporations are categorized into corporations aggregate and corporations sole. While corporations sole were not relevant to this case, the focus was on corporations aggregate. These entities are described as a collection of individuals forming a single body with legal capacity akin to an individual, including the ability to hold property, contract, sue, and enjoy privileges.
Contrasting corporations aggregate, a partnership firm operates based on a contractual agreement among individuals, with rights and liabilities governed by the partnership terms and relevant statutory provisions. Partnerships are considered a collective of individuals rather than a distinct legal entity. Justice Patra emphasized that a firm is essentially a convenient label for individuals conducting business together, with joint and several liability for partners. In this case, it was noted that one of the partners of Rowe and Pal explicitly stated that he was overseeing the liquidation proceedings, reinforcing the view that the firm was not a body corporate.
The judgment concluded that the firm Rowe and Pal, being a partnership of chartered accountants, did not possess the characteristics of a body corporate as outlined in the Companies Act. As a result, the application filed by the Registrar of Companies was dismissed, and Rowe and Pal's appointment as the liquidator was deemed valid. The decision was made based on the absence of evidence demonstrating the firm's status as a body corporate, leading to the rejection of the application without costs.
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1971 (9) TMI 87
Issues Involved
1. Sanction of the court to a scheme of arrangement under section 391 of the Companies Act.
2. Necessary directions under section 394 of the Companies Act.
3. Opposition by the Central Government based on the Monopolies and Restrictive Trade Practices Act, 1969.
4. Requirement for the transferee company to apply under sections 391 and 394 of the Companies Act.
Detailed Analysis
1. Sanction of the Court to a Scheme of Arrangement under Section 391 of the Companies Act
The Bank of India Ltd. filed a petition for the court's sanction of a scheme of arrangement under section 391 of the Companies Act, following the nationalization of its business under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The scheme involved the transfer of the bank's undertaking to the Ahmedabad Manufacturing & Calico Printing Company Ltd. (the transferee company). The scheme was approved by an overwhelming majority of the shareholders of the transferor company, with 3,70,194 votes in favor and only 36 votes against.
2. Necessary Directions under Section 394 of the Companies Act
The court was also requested to provide necessary directions under section 394 of the Companies Act. Under the proposed scheme, for every four shares in the transferor company, the transferee company would issue and allot to the members of the transferor company: (i) one "A" ordinary share of Rs. 25 credited as fully paid and an entitlement to two fractions of 1/10 each of such "A" ordinary share; (ii) one eight percent convertible bond of Rs. 100 credited as fully paid; and (iii) four eight percent redeemable bonds of Rs. 116 each credited as fully paid. The transferee company would also increase its authorized capital by about Rs. 12 lakhs.
3. Opposition by the Central Government Based on the Monopolies and Restrictive Trade Practices Act, 1969
The Central Government opposed the petition on two grounds: (1) the scheme required the sanction of the Central Government under the Monopolies and Restrictive Trade Practices Act, 1969; and (2) an application under sections 391 and 394 of the Companies Act by the transferee company to the Gujarat High Court was also necessary. The court referred to a previous judgment (Union of India v. Tata Engineering and Locomotive Co. Ltd.) which held that temporary utilization of funds did not constitute carrying on investment business under the Monopolies and Restrictive Trade Practices Act, 1969. The court found this decision binding and rejected the Central Government's first ground of opposition.
4. Requirement for the Transferee Company to Apply Under Sections 391 and 394 of the Companies Act
The court considered whether the transferee company also needed to apply under sections 391 and 394. The court noted that sections 391 and 394 did not explicitly state that they applied only to the transferor company. The court held that if a scheme affects the rights of the members or creditors of the transferee company, an application by the transferee company under these sections would be necessary. The court found that the scheme in the present case would affect the rights of the transferee company's members and creditors, as it involved the issuance of new types of equity shares and bonds. Therefore, the transferee company was required to apply under sections 391 and 394.
The court also addressed three arguments presented by Mr. Sorabjee against the necessity of an application by the transferee company:
1. No Arrangement Between Transferee Company and Its Members: The court rejected this argument, stating that if the scheme affects the rights of the members or creditors, an application is necessary.
2. English Practice: The court found no support in English law or practice for the argument that an application by the transferee company is unnecessary.
3. Definition of "Company" in Section 390(a): The court rejected the argument that sections 391 and 394 do not apply to a transferee company in sound financial condition, stating that the definition in section 390(a) means a company "liable" to be wound up, not necessarily "capable" of being wound up.
Conclusion
The court concluded that the scheme required the sanction of both the transferor and transferee companies under sections 391 and 394 of the Companies Act. The petition was made absolute in terms of prayer (a), with the addition that the sanction by the appropriate High Court under section 391 and the necessary orders under section 394 must be obtained by both the transferor and transferee companies.
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1971 (9) TMI 68
Issues:
1. Confiscation of U.S.A. currency and penalties imposed under the Customs Act, 1962.
2. Confiscation of vessel S.T. Speedway and imposition of import duty.
3. Application of fundamental principles of criminal jurisprudence and natural justice in customs proceedings.
4. Circumstantial evidence linking the petitioner to the alleged offenses.
5. Interpretation of Section 115(2) of the Customs Act, 1962 regarding confiscation of goods.
Detailed Analysis:
1. The judgment concerns the confiscation of U.S.A. currency, penalties imposed under the Customs Act, 1962, and the imposition of import duty. The respondent, the Collector of Customs and Central Excise, confiscated U.S.A. currency, imposed penalties on the vessel's officers, and ordered import duty payment on whisky cases. The petitioner, the vessel's captain, challenged the penalties and confiscation.
2. The vessel, S.T. Speedway, owned by Gothic Shipping Co., arrived at Cochin Port with whisky stock. Customs officers discovered a shortage of whisky cases, leading to penalties and confiscation. The petitioner denied knowledge of the offenses but admitted responsibility for stock distribution. The judgment questioned the penalties and vessel confiscation.
3. The judgment highlighted the application of criminal jurisprudence and natural justice in customs proceedings. It referenced a Supreme Court decision stating that customs inquiries must adhere to fundamental principles of justice. The burden of proof lies with customs authorities to establish guilt through satisfactory evidence.
4. The judgment analyzed circumstantial evidence linking the petitioner to the offenses. It dismissed the recovery of U.S.A. currency from the petitioner's cabin as insufficient proof. The petitioner's role in stock distribution did not conclusively connect him to the offenses. Lack of explanation for additional whisky purchase was deemed a misinterpretation.
5. The judgment interpreted Section 115(2) of the Customs Act, 1962 regarding vessel confiscation. It clarified that goods in the vessel's bonded store were not liable for duty until taken out. The manner in which the whisky cases were removed did not implicate the vessel or the petitioner. The respondent failed to levy duty on the officer responsible for the sale.
In conclusion, the judgment quashed the order to the extent challenged, citing lack of evidence linking the petitioner to the offenses and unjust vessel confiscation. It emphasized the need for valid grounds and adherence to the law in customs proceedings.
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1971 (9) TMI 67
Issues:
Challenge to levy and collection of excise duty on packing charges of glass and glassware.
Analysis:
The judgment involves two writ petitions challenging the excise duty on packing charges of glass and glassware. The company manufactures glass containers and bottles, selling them with or without packing as per customer requirements. The excise authorities demanded duty on packing charges, arguing it is part of the assessable value under the Central Excises and Salt Act, 1944. The company objected, stating that packing charges are not part of the price of excisable articles. The court examined whether excise duty on packing charges is authorized under the Act.
The first ground for the levy was that packing is incidental to the completion of manufactured glass containers. However, the court found this argument unsubstantiated, as packing is not integral to the manufacturing process. The authorities failed to provide a valid reason for considering packing as part of the manufacturing process. The court concluded that packing is not ancillary to the manufacture of bottles.
Regarding the second ground, the court analyzed Section 4 of the Act, which determines the value of excisable articles for duty computation. The court noted that the assessable value should only include the wholesale cash price of the articles, excluding packing charges. The company sold bottles without packing, and the price list did not include packing charges until authorities insisted. The court ruled that including packing charges in the valuation of excisable articles is illegal and beyond the authorities' jurisdiction.
In conclusion, the court allowed both petitions, quashing the demands for differential duty on packing charges. It directed the authorities not to enforce the demands and ordered reassessment of duty without considering packing charges, with a refund if excess amount was collected. The company was awarded costs for the legal proceedings.
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1971 (9) TMI 66
Whether the powers exercised by the Agricultural Income-tax Officer were exercised within three years from the date of the assessment order, in respect of each one of those assessments?
Held that:- The Agricultural Income-tax Officer was empowered to make the rectification under section 36 of the Act. But, from the material before us, it is not possible for us to decide which of all assessments would fall within the period prescribed in section 36 of the Act. For that reason these cases have got to go back to the High Court for deciding that question in accordance with this decision. Appeals allowed. Case remanded
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1971 (9) TMI 65
Issues:
1. Excess profits tax assessment and appeal process.
2. Refund of tax paid and claim for refund.
3. Writ petition under article 226 of the Constitution.
4. Appeal against the writ petition judgment.
5. Maintainability of the writ petition due to the absence of a party.
6. Legal discharge of funds to the Income-tax Officer, Bombay.
7. Liability of the Excess Profits Tax Officer, Rajahmundry for refund.
8. Decision to remit the case back to the High Court for further consideration.
Analysis:
The case involved the assessment of excess profits tax on a firm by the Excess Profits Tax Officer, which was later appealed against and reversed by the appellate authority and the Income-tax Appellate Tribunal. During the appeal process, two partners of the firm passed away. One of the deceased partner's son deposited the tax assessed, seeking a refund after the order was reversed. However, the Income-tax Officer of Bombay claimed a portion of the refund towards the deceased partner's tax arrears, leading to a dispute over the refund.
The appellants filed a writ petition under article 226 of the Constitution seeking a direction for the refund. The single judge allowed the writ petition, directing the respondents to refund the amount. The respondents appealed the decision, arguing that the writ petition was not maintainable as the Income-tax Officer of Bombay was not made a party. The Division Bench allowed the appeal solely on the ground of non-maintainability due to the absent party, without considering other grounds raised by the department.
The Supreme Court held that the writ petition was maintainable even without the Income-tax Officer of Bombay being a party, as the funds transferred were part of the dissolved firm's assets, and the deceased partner's share had not been determined. The Court emphasized that the payment to the Income-tax Officer, Bombay, was unauthorized and did not discharge the liability to refund. Therefore, the appeal was allowed, and the case was remitted back to the High Court for further consideration of the remaining issues.
The Court directed the parties to bear their own costs in the Supreme Court, maintaining the decision to remit the case for the High Court's review of the unresolved matters. The judgment clarified the legal standing regarding the refund claim and the necessity of involving relevant parties in such proceedings for a comprehensive resolution.
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1971 (9) TMI 64
Whether the fact that the applicant apportioned the sum of ₹ 79,680 out of the general revenue expenses of its estate towards the immature area and capitalised the same for purposes of its accounts precluded the appellant from claiming the same as revenue expenses for the purpose of agricultural income-tax assessment ?
Whether the Tribunal ought not to have considered the nature of the expenses amounting to ₹ 79,680 for the purpose of determining whether it is allowable expenditure or not irrespective of the way it was dealt with by the applicant for the purpose of its accounts ?
Held that:- The questions set out in the application of the assessee do arise for consideration and, therefore, the High Court should have directed the Tribunal to refer those questions to the High Court for its opinion.
In the result, we allow the appeal and direct the Tribunal to refer the two questions set out in the application of the assessee to the High Court for its opinion. Appeal allowed.
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1971 (9) TMI 63
Whether, on the facts and in the circumstances, any gift-tax was payable on the goodwill of the assessee's business. If the answer be in the affirmative how much share in the goodwill was liable to such tax ?
Held that:- In the present case it has not been established that the requirements of section 5(1)(xiv) of the Act were satisfied. The assessee was certainly carrying on his business at the point of time when he admitted his two daughters into the firm. But from that fact alone it did not follow that the gift had been made in the course of the assessee's business nor could it be held that the gift was made for the purpose of carrying on the assessee's business. The Tribunal came to the conclusion that the partnership did provide for the continuance of the partnership business in spite of the death of the partner and that the main intention of the assessee was to ensure the continuity of the business and to prevent its extinction on his death. A true and correct reading of the deed of partnership indicates that the partners could go out from the partnership in terms of clause 2 of the schedule in the deed of partnership. Moreover, the partnership was expressly stated to be at will. The real intention of the assessee apparently was to take his daughters into the firm with the object of conferring benefit on them for the natural reason that the father wanted to look to the advancement of his daughters. It was further provided in the deed that even the minor children would, in due course, be admitted to partnership. Clause 18 of the schedule already referred to laid down that the assessee could nominate either one or all of his minor children to be partner or partners on their attaining majority and such nomination or appointment could be made even by a will or codicil. The assessee retained complete control over the running of the partnership business and it can hardly be said that he needed any help from his daughters particularly when there is no evidence that he was in a weak state of health, his age being below 50 years. Moreover, there is nothing to show that the daughters had any specialised knowledge or business experience so as to be able to assist in the development or management of the business. Thus there was no cogent material to come to the conclusion that the gift of ₹ 25,000 to each of the daughters by the assessee was " in the course of carrying on the business " of the assessee and was " for the purpose of the business ".
The assessee had himself made a return in the matter of assessment of gift-tax payable under the Act in respect of the amount of ₹ 50,000 which had been gifted by him to his two daughters. The answer to question No. 3, consequently, would be in favour of the revenue and against the assessee so far as that amount is concerned.
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1971 (9) TMI 62
The Supreme Court allowed the appeal in a gift-tax matter related to the valuation of shares for the assessment year 1958-59. The court held that the estimated tax liability should have been deducted in determining the break-up value of the shares. The High Court's decision in favor of the assessee was overturned, and the appeal was allowed in favor of the department.
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1971 (9) TMI 61
Whether there was gift by N. S. Getti Chettiar of ₹ 2,46,377 on which he is liable to pay Gift-tax ?
Held that:- the word "disposition", in the context, means giving away or giving up by a person of something which was his own, "conveyance" means transfer of ownership, "assignment" means the transfer of the claim, right or property to another, "settlement" means settling the property, right or claim--conveyance or disposition of property for the benefit of another "delivery" contemplated therein is the delivery of one's property to another for no consideration and "payment" implies gift of money by someone to another. We do not think that a partition in a Hindu undivided family can be considered either as "disposition" or "conveyance" or "assignment" or "settlement" or "delivery" or "payment" or "alienation" within the meaning of those words in section 2(xxiv).
The "transaction" referred to in clause (d) of section 2(xxiv) takes its colour from the main clause, viz., it must be a transfer of property in some way. This conclusion of ours gets support from sub-clauses (a) to (c) of clause (xxiv) of section 2, each of which deals with one or the other mode of transfer. If Parliament intended to bring within the scope of that provision partitions of the type with which we are concerned, nothing was easier than to say so. In interpreting tax laws, courts merely look at the words of the section. If a case clearly comes within the section, the subject is taxed and not otherwise. We agree with the view taken by the High Court of Madras, the Tribunal and the Appellate Assistant Commissioner that the assessee made no "gift" under the partition deed in question.
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1971 (9) TMI 60
Issues Involved:
1. Applicability of Section 81(i)(a) of the Income-tax Act, 1961.
2. Applicability of Section 81(v) of the Income-tax Act, 1961.
3. Classification of income from interest on securities as business income or otherwise.
4. Determination of whether the investment of funds other than debenture redemption (sinking) fund qualifies for tax exemption.
Detailed Analysis:
1. Applicability of Section 81(i)(a) of the Income-tax Act, 1961:
The primary issue was whether the income earned by the assessee from interest on securities, excluding the debenture redemption (sinking) fund, was exempt from tax under Section 81(i)(a). Section 81(i)(a) exempts the profits and gains of a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members.
The court emphasized that to qualify for this exemption, the co-operative society must prove that the income sought to be exempted was earned in the course of carrying on its business of banking or providing credit facilities to its members. The Tribunal found that the debenture redemption (sinking) fund was part of the business activity, and thus, the interest income from this fund was exempt. However, the investment of other funds in Government securities was not considered a business activity necessary for carrying on the assessee's business. Consequently, the interest income from these other funds was not exempt under Section 81(i)(a).
2. Applicability of Section 81(v) of the Income-tax Act, 1961:
Section 81(v) exempts interest on securities chargeable under Section 18 or income from property chargeable under Section 22, provided the total income of the co-operative society does not exceed Rs. 20,000 and the society is not a housing society, an urban consumers' society, a society carrying on transport business, or a society engaged in manufacturing operations with the aid of power.
The court found that the assessee did not meet these criteria, as its total income exceeded Rs. 20,000. Therefore, the assessee was not entitled to the exemption under Section 81(v).
3. Classification of Income from Interest on Securities:
The court examined whether the interest income from securities could be classified as business income. The Tribunal had bifurcated the interest income, granting exemption for the debenture redemption (sinking) fund but not for other funds. The court agreed with this bifurcation, stating that the investment of funds other than the debenture redemption (sinking) fund did not have a direct or proximate connection with the business activity of the assessee.
The court affirmed that the interest income from these other funds was chargeable to tax under Section 18 and did not qualify as business income under Section 81(i)(a).
4. Investment of Funds Other than Debenture Redemption (Sinking) Fund:
The court analyzed whether the investment of funds other than the debenture redemption (sinking) fund in Government securities was necessary for carrying on the assessee's business. It was found that these investments were not directly connected to the business activity of the assessee. The interest income from these investments was considered income from securities, chargeable to tax under Section 18, and not exempt under Section 81(i)(a).
Conclusion:
The court concluded that the assessee was not entitled to claim a refund of the tax deducted at source for the total income earned by way of interest on securities, except for the interest income from the debenture redemption (sinking) fund, which was exempt under Section 81(i)(a). The assessee's claim for exemption under Section 81(v) was also rejected as the total income exceeded Rs. 20,000. The court's answer to the referred question was in the negative, against the assessee, and costs were awarded to the Commissioner of Income-tax.
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1971 (9) TMI 59
Surplus of income over expenditure of a recreation club providing amenities to members on payments - " Whether, on the facts and circumstances of the case, the assessee-club is entitled to exemption from income-tax in respect of its income for the assessment year 1961-62 ? " - Since the club has not been formed for the purpose of making profits by trading, it is not a trade association. The surplus of receipts over expenditure derived by the assessee-club does not go to any person in the capacity other than as contributor or consumer. Therefore, the assessee club is not a trade association nor is the excess a profit taxable as income from other sources - Surplus received by the assessee-club is not income. It is therefore, not taxable either under section 10 as business income or under section 12 as income from other sources.
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1971 (9) TMI 58
" (1) Whether Income-tax Officer should be deemed to have granted extension of time for filing the return when he did not pass any orders on the assessee's application? (2) Whether levy of interest calculated under clause (iii) of the proviso to section 139(1), the Income-tax Officer must be deemed to have condoned the delay in filing the return of income ? (3) Whether Income-tax Officer had the power to levy a penalty under section 271(1)(a) when he had already levied interest under section 139 ? and (4) Whether Income-tax Officer had jurisdiction to levy penalty under section 271(1)(a) of the Act where a return was filed under section 139(4) and penal interest was also levied under the provisions of this latter section ? "
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1971 (9) TMI 57
A question of law relating to the construction of section 58K(2) of the Indian Income-tax Act, 1922, arises for consideration in this reference – Two Banks amalgamated with Bank C the provident fund accounts of the first two banks were closed and the funds were distributed among the employees under orders of court - whether the third bank is entitled to claim the payments as expenditure u/s10(2)(xv) r.w.s. 58K(2) Indian Income-tax Act, 1922
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1971 (9) TMI 56
Scope and ambit of the charging provision in relation to capital gains tax - Whether relinquishment of interest in partnership assets due to retirement of partner from the firm attract capital gains tax also whether goodwill is a capital asset
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1971 (9) TMI 55
Assessee is a private limited company. It manufactures woollen cloth and carpets. These items are also exported out of India. In the year 1966-67, the assessee could not pay the provisional demand of tax in respect of earlier assessment and approached the Income-tax Officer for time which was allowed. In respect of these delayed payments, the assessee was charged interest and he paid a sum of Rs. 6,733. This payment of interest has been claimed by the assessee as permissible deduction under sections 37 and 36(1)(iii) of the Income-tax Act, 1961. The Income-tax Officer disallowed this claim and held that the assessee was not entitled to claim it as a permissible deduction under the Act – held that the interest on belated tax payment is not deductible under section 10(2)(xv)
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9911796707
