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Case Laws
Showing 421 to 440 of 446 Records
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1999 (3) TMI 27
Issues:
- Application under section 27(3) of the Wealth-tax Act, 1957 seeking directions from the High Court to refer a question of law to the Income-tax Appellate Tribunal.
- Interpretation of rule 2B(2) of the Wealth-tax Rules, 1957 for valuing the closing stock based on gross profit rate declared by the assessee.
- Burden of proof on the Revenue to show the market value of closing stock exceeds the valuation disclosed by more than 20%.
- Application of rule 2B(2) of the Rules to the valuation of closing stock.
- Consistency of decisions in similar cases by the High Court.
Analysis:
The Commissioner of Wealth-tax sought directions to refer a question of law regarding the applicability of rule 2B(2) of the Wealth-tax Rules for valuing the closing stock based on the gross profit rate declared by the assessee. The Assessing Officer applied the rule to increase the returned wealth of the assessee, but the Appellate Assistant Commissioner and the Tribunal held that the rule cannot be invoked solely on the basis of gross profit shown by the assessee. The Tribunal declined to refer the question to the High Court. The burden of proof was on the Revenue to demonstrate that the market value of the closing stock exceeded the disclosed valuation by more than 20%. The Tribunal found that the Revenue failed to discharge this burden by providing evidence or material justifying the application of rule 2B(2) to the case. Therefore, the condition precedent for applying the rule was not satisfied, leading to the deletion of the addition made to the net wealth of the assessee.
In previous cases, the High Court had consistently held that the burden lies on the Revenue to prove that the valuation of closing stock in the balance-sheet was not the true value and that the market value exceeded the disclosed valuation by more than 20%. The court emphasized that unless the Revenue demonstrates this, the conditions for invoking rule 2B(2) are not met. The High Court referred to earlier decisions where it was established that the burden of proof rests on the Revenue in such cases. The court declined to direct the Tribunal to refer the question to the High Court, citing the consistent view and decisions in favor of the assessee and against the Revenue. Consequently, the application was dismissed by the High Court.
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1999 (3) TMI 26
Issues:
1. Interpretation of section 143(1)(a) of the Income-tax Act, 1961 regarding disallowance/adjustment of conveyance allowance.
2. Validity of the assessing authority's action in disallowing part of the conveyance allowance without providing an opportunity to the assessee.
3. Consideration of the certificate issued by the Life Insurance Corporation for allowance deduction.
Analysis:
1. The Commissioner of Income-tax sought a reference to the High Court on whether the Income-tax Appellate Tribunal was correct in deleting the disallowance/adjustment of Rs. 48,834 from additional conveyance allowance under section 143(1)(a) of the Income-tax Act, 1961. The Tribunal's decision in favor of the assessee was based on the lack of opportunity given to the assessee before disallowing the amount. The High Court upheld this view, emphasizing the necessity of affording the assessee a chance to substantiate the claim before making any deductions.
2. The assessing authority processed the return under section 143(1)(a) and disallowed Rs. 48,834 out of the additional conveyance allowance without notifying the assessee or allowing an opportunity to explain the usage of the allowance. The High Court held that such disallowance without providing the assessee with a chance to justify the deduction was unjustifiable. The Court stressed that the Income-tax Officer should have granted the assessee an opportunity to demonstrate the actual utilization of the conveyance allowance before making any adjustments.
3. The Revenue relied on a certificate from the Life Insurance Corporation to support the deduction of conveyance allowance. However, the High Court noted that the reliance on the certificate was unilateral, as the assessee was not given a chance to challenge its accuracy or validity. The Court pointed out that the certificate was issued on an ad hoc basis without considering the provisions of section 10(14) of the Income-tax Act. The High Court emphasized the importance of providing the assessee with an opportunity to contest such certificates or claims before making any deductions based on them.
In conclusion, the High Court rejected the Revenue's application for reference, emphasizing the necessity of providing the assessee with a fair opportunity to present their case before disallowing any part of the conveyance allowance. The Court highlighted the importance of procedural fairness and the requirement for assessing authorities to afford taxpayers a chance to substantiate their claims before making any adjustments to their income.
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1999 (3) TMI 25
Issues:
1. Interpretation of provisions of the Income-tax Act, 1961 regarding penalty for inaccurate particulars of income.
2. Disallowance of depreciation and investment allowance by the Assessing Officer.
3. Cancellation of penalty by the Commissioner of Income-tax (Appeals).
4. Tribunal's decision on penalty imposition in a case of loss shown by the assessee.
Analysis:
1. The case involved a petition under section 256(2) of the Income-tax Act, 1961, where the Commissioner of Income-tax sought a direction for the Income-tax Appellate Tribunal to refer questions of law regarding penalty imposition. The issues revolved around the interpretation of the Explanation to section 271(1)(c) and whether penalty could be levied when an assessee shows a loss instead of positive income.
2. The assessee, a private limited company, filed a return for the assessment year 1987-88 with nil profit and claimed depreciation and investment allowance. The Assessing Officer disallowed these claims based on an audit report stating the company had not commenced commercial production. Subsequently, a penalty was imposed on the assessee under section 271(1)(c) for furnishing inaccurate particulars of income.
3. The Commissioner of Income-tax (Appeals) canceled the penalty, noting that the disallowance of depreciation did not constitute furnishing inaccurate particulars of income as the company had not misrepresented its status of commercial production. The Commissioner's decision was based on the fact that the audit report led to the disallowance, not inaccurate information provided by the assessee.
4. The Tribunal upheld the Commissioner's decision, rejecting the Department's appeal. The Tribunal agreed that in a case where the assessee shows a loss, penalty cannot be levied for inaccurate particulars of income. The Tribunal referenced a previous court decision and found no grounds for penalty imposition. The court concurred with the Tribunal's decision and directed the Tribunal to refer the question of law regarding penalty imposition in cases of loss shown by the assessee.
This detailed analysis of the judgment provides a comprehensive overview of the legal issues, arguments presented, and the final decision rendered by the court.
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1999 (3) TMI 24
Issues: The judgment involves two main issues: (a) Whether donations made by the assessee to other institutions qualify as application of income for charitable purposes under section 11 of the Income-tax Act, 1961; and (b) Whether the capital gains arising from the sale of a property should be exempted under section 11(1A) of the Act.
Issue (a): During the assessment year 1984-85, the assessee-trust donated funds totaling Rs. 7,25,000 to various trusts and claimed deduction under section 11 of the Act. The Income-tax Officer initially rejected the claim, but the Commissioner of Income-tax (Appeals) allowed it, stating the donations were for charitable purposes. The Tribunal upheld this decision based on the precedent set by the court in CIT v. Thanthi Trust [1982] 137 ITR 735, which allowed exemption under section 11 for trusts applying money for charitable purposes. Consequently, the first question was answered in favor of the assessee.
Issue (b): In the same assessment year, the assessee-trust sold a garden and received Rs. 28,000, seeking exemption under section 11(1A) of the Act. The Income-tax Officer and the Commissioner of Income-tax (Appeals) initially denied the claim, but the Tribunal ruled in favor of the assessee, citing the decision in CIT v. Ambalal Sarabhai Trust No. 3 [1988] 173 ITR 683 by the Gujarat High Court. This decision held that a charitable trust was entitled to exemption on capital gains from the sale of assets if section 11(1A) requirements were met. Consequently, the second question was answered in favor of the assessee.
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1999 (3) TMI 23
Issues:
1. Interpretation of provisions under the Voluntary Disclosure of Income and Wealth Act, 1976 regarding voluntary disclosures.
2. Whether interest is payable by the declarant in terms of section 6 of the Act when disclosing income under section 14.
3. Applicability of circular issued by the Central Board of Direct Taxes on the grant of immunity in cases of non-compliance with statutory provisions.
4. Comparison with a Division Bench judgment of the Madras High Court regarding liability to pay interest for voluntary disclosure of wealth under section 15.
Analysis:
1. The judgment deals with the interpretation of provisions under the Voluntary Disclosure of Income and Wealth Act, 1976 concerning different types of voluntary disclosures. It distinguishes between disclosures under sections 3, 14, and 15 of the Act, highlighting the specific requirements and implications of each type of disclosure.
2. The main issue addressed in the judgment is whether interest is payable by the declarant when disclosing income under section 14 of the Act. The petitioner argued for immunity from interest payment based on the disclosure made under section 14, while the respondent contended that interest was payable as per section 6 of the Act. The court analyzed the relevant sections (5, 6, 14) and concluded that interest is applicable if tax remains unpaid by the specified deadline, rejecting the petitioner's argument for immunity from interest.
3. The judgment also discusses the applicability of a circular issued by the Central Board of Direct Taxes regarding the grant of immunity in cases of non-compliance with statutory provisions. The court clarified that the circular specifically addresses the grant of immunity and does not cover the subject of interest payment, emphasizing that the circular does not have a binding effect on the issue of interest payment.
4. Furthermore, the judgment references a Division Bench judgment of the Madras High Court in a similar case involving voluntary disclosure of wealth under section 15 of the Act. The court highlighted that in the referenced case, the assessee was held liable to pay interest to obtain immunity under the Act, indicating that payment of interest is a requirement for claiming immunity under the Act.
In conclusion, the court held that the respondents were justified in claiming interest in accordance with section 6 of the Act. The petition was dismissed, and costs were imposed. The judgment provides a detailed analysis of the statutory provisions, clarifying the requirements for voluntary disclosures and the implications of non-compliance with payment deadlines and interest obligations.
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1999 (3) TMI 22
The High Court of Kerala upheld the Chief Commissioner of Income-tax's decision to disallow 30% of a chartered accountant's bill for audit work, approving 70% as expenses. The assessment for the year 1992-93 resulted in a tax of Rs. 7,60,433. The court found no arbitrariness in the bill and dismissed the petition challenging the order.
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1999 (3) TMI 21
The petitioners prayed for quashing paragraph 25 of the order of the Settlement Commission dated June 15, 1984, in respect of the assessment years 1974-75 and 1975-76 and also the order dated January 22, 1991, refusing to rectify the order dated June 15, 1984, under which, prayer to delete paragraph 25 was made. - the orders dated June 15, 1984, and January 22, 1991, are quashed. The matter is sent back to the Settlement Commission for determining the liability afresh as to whether the firm is liable for registration or not and the order would be passed only against the firm alone if it is considered proper.
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1999 (3) TMI 20
Production of design and art works which serve as the basic material for publication of advertisements in newspapers, periodicals, technical journals, souvenirs, etc. - Preparation of designs for fabrication and erection of hoardings for outdoor publicity - Production of publicity texts including for the press, direct mail product literature etc." - tribunal is right in holding that the assessee is an industrial company entitled for concessional rate of tax
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1999 (3) TMI 19
Whether a return filed and accepted in pursuance of an order made u/s 146, can be treated as a return filed u/s 139 - held that where a best judgment assessment is set aside u/s 146 on the Income-tax Officer being satisfied that the assessee was prevented by sufficient cause from making a return required u/s 139(2), he naturally has to receive the return filed along with the application u/s 146. Such return would then be a return filed u/s 139 for the purpose of s. 80 as it then stood
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1999 (3) TMI 18
Whether Tribunal was right in law in holding that the assessee had claimed extra-shift allowance on computer only and not on data processing machines and computer is eligible for extra-shift allowance - Whether Tribunal was right in law in holding that the assessee is entitled to investment allowance on data processing machine/computer even though the assessee is not engaged in any of the activities mentioned in section 32A(2) - application of the Revenue u/s 256(2) is allowed
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1999 (3) TMI 17
Question that "Whether the Tribunal is right in law and on facts in directing the AO to allow the claim of the assessee in respect of unpaid sales-tax if the same was covered by the specific scheme of the Gujarat Government whereby the deferred payment scheme was converted into interest-free loan particularly when the provisions of s. 43B are retrospective in operation" is a question of law - question quoted above shall be referred by the Tribunal to the HC
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1999 (3) TMI 16
Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in law in holding that the premium paid by the assessee on behalf of the employee-director formed part of 'salary' and allowable as deduction from computing the assessable income of the company and not 'perquisite', disallowable under section 40A (5) or 40(c) - question of law does arise which should be considered by the High Court.
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1999 (3) TMI 15
Because of suffering of losses, assessee had dismantled its business never to return back to it - the amount earned by an assessee by leasing out the assets of the business would not be income from business carried on by it - hence income received by the assessee by leasing out the factory was not assessee's business income
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1999 (3) TMI 14
Export of "agarbathis" - commission paid to agents outside India who had procured orders - Tribunal was justified in holding that the applicant was not entitled to the weighted deduction u/s 35B(1)(b)(iv), in respect of the commission payments made to agents outside India
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1999 (3) TMI 13
Section 2(9) defines the assessment year to be the period of 12 months commencing on the first day of April every year - It does not depend upon one or other assessee - unabsorbed development rebate u/s 33 and the unabsorbed deduction u/s 80J may be carried forward only for the eight and four assessment years, respectively, that follow the assessment year relevant to the previous year in which the said development rebate and deduction was first earned
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1999 (3) TMI 12
Assessee have poultry farms and they run hatcheries where eggs are hatched on a large scale by adopting the latest scientific and technological methods - held that assessee is neither an industrial undertaking nor is it engaged in the business of producing "articles or things", consequently, the assessee is not entitled to developmental allowance under section 32A of the Act and deductions under sections 80HH, 80HHA, 80-I and 80J
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1999 (3) TMI 11
Rectification Of Mistakes - Revenue has not been able to satisfy us that it shows any apparent error upon the record. Reference to documents outside the record and the law is impermissible when applying the provisions of section 154 - hence Tribunal was not justified in upholding the finding of the CIT (Appeals) who cancelled the order of the Assessing Office passed on June 18, 1991, under section 154
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1999 (3) TMI 10
Assessee contend that while granite is a mineral in the general sense, it is not a mineral for purposes of section 80HHC and that, therefore, the deduction provided for therein is available to the assessee - Tribunal was right in holding that the assessee is not entitled to the allowance claimed u/s 80HHC in respect of the granite exported from India
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1999 (3) TMI 9
Claim for allowance u/s 80HHC on the ground that it was an industrial undertaking that manufactured/produced articles - held that activity of processing of prawns is not an activity of manufacture or production - processed or frozen shrimps and prawns are commercially regarded as the same commodity as raw shrimps and prawns - hence assessee's business doesn't involves 'production' hence not entitled to exemption under section 80HH
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1999 (3) TMI 8
ITO allowed the deduction only to the extent of 80 per cent of the aggregate contribution and spread it out over a period of five years. For so doing, he relied upon a notification dated October 21, 1965 issued by CBDT - Whether Tribunal was justified in confirming the order of CIT (A) that the entire initial contribution made to the superannuation fund is allowable deduction - Held, yes - revenue appeal is dismissed
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