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Showing 421 to 440 of 525 Records
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2002 (8) TMI 106
The Supreme Court of India allowed the petition challenging a bail order for a Customs Act offence. The petitioner, a foreign national, was granted bail on a bond of Rs. 10,000 with conditions to appear in court and report weekly.
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2002 (8) TMI 105
The High Court of Karnataka ruled in favor of the assessee, a nationalized bank, regarding the treatment of rediscounting charges paid to RBI and IDBI under the Interest-tax Act, 1974. The court held that the charges did not form part of chargeable interest. The judgment was based on a previous case involving the same bank for the assessment year 1975-76. The court agreed with the earlier Division Bench's interpretation of the IDBI rediscounting scheme, stating that the bank acted as a conduit for fund disbursement. As a result, the court answered question No. 1 against the Department and did not address the remaining questions.
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2002 (8) TMI 104
Issues Involved:
1. Whether the assessee-club is liable to wealth-tax for the assessment years 1980-81 to 1983-84.
2. Whether the penalty imposed for the belated filing of wealth-tax returns for the assessment years 1981-82 and 1982-83 is justified.
Issue-wise Detailed Analysis:
1. Liability to Wealth-tax:
The primary issue was whether the assessee-club, registered under the Karnataka Societies Registration Act, is liable to wealth-tax for the assessment years 1980-81 to 1983-84. The assessee-club filed returns declaring "nil" wealth, claiming it was an association of persons (AOP) and not liable for wealth-tax. The Wealth-tax Officer assessed the wealth of the assessee in the status of an individual and charged wealth-tax.
The first appellate authority allowed the appeal for the assessment year 1980-81 but dismissed the appeals for 1981-82 to 1983-84, citing the insertion of Section 21AA by the Finance Act, 1981, effective from April 1, 1981. This section provides that if the shares of the members of an AOP are indeterminate or unknown, wealth-tax shall be levied on the AOP as an individual.
The Income-tax Appellate Tribunal (ITAT) allowed the assessee's appeals, relying on the Karnataka High Court's decision in CWT v. Bowring Institute [1992] 194 ITR 287, which held that the assessee could not be treated as an entity assessable to wealth-tax.
However, the High Court noted that the issue was settled by the Supreme Court in CWT v. Ellis Bridge Gymkhana [1998] 229 ITR 1, which held that a club is not assessable to wealth-tax for the assessment years 1970-71 to 1977-78 as an AOP. The Supreme Court also noted that Section 21AA, effective from April 1, 1981, provides for the assessment of AOPs where individual shares are indeterminate or unknown.
The High Court concluded that for the assessment year 1980-81, the assessee is not liable to wealth-tax. However, for the assessment years 1981-82 to 1983-84, the assessee is liable to wealth-tax under Section 21AA, as the individual shares of the members were indeterminate or unknown.
2. Penalty for Belated Filing of Returns:
The second issue was whether the penalty imposed for the belated filing of wealth-tax returns for the assessment years 1981-82 and 1982-83 was justified. The assessee-club filed the returns late, claiming a bona fide belief that it was not liable to wealth-tax, based on previous High Court decisions and ITAT orders in its favor.
The Wealth-tax Officer imposed penalties under Section 18(1)(a) of the Wealth-tax Act for the delayed filing. However, the first appellate authority and the ITAT accepted the assessee's explanation, finding it reasonable and sufficient.
The High Court noted that Section 18(1)(a) allows for the imposition of penalties for delayed filing unless there is reasonable cause. The assessee's belief that it was not liable to wealth-tax, based on previous favorable decisions, was considered a reasonable cause.
The High Court held that the penalty for the belated filing of returns could not be sustained, as the assessee had a bona fide belief that it was not liable to wealth-tax. The Tribunal's decision to cancel the penalty was upheld, as the assessee had reasonable cause for the delay.
Conclusion:
The High Court concluded that the assessee-club is not liable to wealth-tax for the assessment year 1980-81 but is liable for the assessment years 1981-82 to 1983-84 under Section 21AA. The penalty for the belated filing of returns for the assessment years 1981-82 and 1982-83 was not justified, and the Tribunal's decision to cancel the penalty was upheld.
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2002 (8) TMI 103
Issues:
Interpretation of proviso to section 7(4) of the Wealth-tax Act, 1957 regarding exemption of a property.
Analysis:
The judgment in question pertains to the interpretation of the proviso to section 7(4) of the Wealth-tax Act, 1957, concerning the exemption of a property. The case involved an assessee who owned a house property with a certain extent of land and sought the benefit of the proviso to section 7(4) for exemption. The assessing authority granted exemption to only a portion of the land, based on the view that it was the reasonable extent appurtenant to the house, while valuing the remaining portion for assessment. The appellate authority and the Tribunal upheld this decision, considering the assessable extent capable of independent development and sufficient for the enjoyment of the house.
The judgment delves into the provisions of section 7 of the Wealth-tax Act, specifically sub-section (4), which deals with determining the value of assets, particularly houses exclusively used for residential purposes. The proviso to this section allows for exemption under certain conditions, such as the property belonging to the assessee and being used solely for residential purposes. The court emphasized that the Act does not define the term "house" or set any limits on the open space considered part of the house. The key criteria for the proviso include ownership by the assessee and exclusive residential use, with the option to specify the house for availing the benefit if multiple residential properties exist.
The judgment highlights that the Act does not restrict the extent of open space for better residential enjoyment and does not empower authorities to determine the optimal size of a house or associated land. It underscores that as long as a house is used exclusively for residence and the grounds benefit only the residents and visitors, it qualifies for exemption under section 7(4). Importing personal opinions on reasonable house size or open space extent is deemed impermissible in assessing wealth tax liability.
Moreover, the court criticized the Assessing Officer for referencing Town Planning Rules to justify limiting the open space around the house, noting that such rules do not impose a maximum limit on open space. Importantly, the judgment emphasizes that exemptions provided by the statute should not be arbitrarily reduced by Assessing Officers based on subjective notions of reasonableness, safeguarding the intended benefits for taxpayers. Ultimately, the court ruled in favor of the assessee, rejecting the arbitrary valuation of the property and upholding the right to full exemption under the proviso to section 7(4) of the Wealth-tax Act, 1957.
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2002 (8) TMI 102
Issues Involved:
The judgment involves a petition of appeal u/s 260A challenging the Tribunal's decision regarding the disallowance of expenses claimed by the assessee for the assessment year 1994-95, specifically related to rent, depreciation, repair, and maintenance of its guest-house.
Depreciation:
The court emphasized that no depreciation can be claimed under the general section 37(1) as section 37(4) explicitly disallows depreciation for guest-houses. Previous court decisions, such as Kesoram Industries' case, supported this interpretation, leaving no room for doubt or open questions of law.
Repairs:
Regarding repairs, the court clarified that since repairs are covered in section 30, the general provision, section 37(1), cannot override the specific disallowance for guest-houses in section 37(4). The court stressed that the special provision prevails over the general, as established in Kesoram Industries' case.
Maintenance:
Maintenance, not explicitly mentioned in sections 30 to 36, falls under section 37(1) by default. The court ruled that section 37(4) applies to maintenance expenses for guest-houses, regardless of any arguments against it, as it is clearly applicable notwithstanding section 37(1).
Rent:
For rent, which is addressed in section 30 for all buildings, section 37(4) specifically excludes rent for guest-houses from deduction claims. The court highlighted that the special provision in section 37(4) must prevail over the general provision in section 30 to prevent circumvention of the Act's specific prohibitions.
The court concluded that, despite various High Courts' interpretations of section 37, in this case, there was no open question of law remaining for further scrutiny. The petition of appeal was rejected, and the Tribunal's decision was confirmed, with authenticated copies of the order to be issued to the parties.
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2002 (8) TMI 101
Appeal To High Court, Application For Stay - It seems from the international wealth of Mr. Bajoria's clients that they might well be willing to put in a sufficient security and then have their appeal heard out. But some time has to be allowed in this regard to see whether the security would be furnished as a matter of course or the usual adversary system has to be followed in regard to the hearing out of the stay application before the hearing of the appeals. - With the above observations the appeal and the stay application are both released from our list, not to be treated as part-heard before us. - About the deposit of Rs. 20 crores, or the alternative procedure of immediate adversary battle, the parties are allowed a fortnight's time. There will be liberty to mention on both sides before the Bench then taking up tax matters.
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2002 (8) TMI 100
Estate Duty, Net Principal Value, Death Of One Partner - We are of the view that the disclosure made under the Voluntary Disclosure Act relates back to previous years in which the income was earned and the liability arose at the end of the previous year in which the income was earned and consequently it will be a debt incurred prior to the death of a partner. In other words, it was a pre-existing liability and not a new liability which arose subsequent to the date of death of K. Periaswamy. We are also of the view that the object of the declaration under the Voluntary Disclosure Act is to disclose the already existing liability and to enjoy the estate free from liability and without fear of penalty or prosecution proceedings. We hold that the liability to income-tax on the concealed income arose on the last date of the previous year in which the income was earned and since it was a pre-existing liability, that liability is liable to be deducted as a debt in the computation of the principal value of the estate of the deceased.
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2002 (8) TMI 99
Wealth Tax, Net Wealth, Valuation Of Films - "Whether on the facts and circumstances of the case, the Tribunal was right in directing the Wealth-tax Officer to adopt the value determined by the actual collection made from exploitation of the films for the purpose of inclusion in the net wealth?" - it is not possible for us to uphold the order of the Tribunal. The test suggested by the Tribunal more particularly with reference to the date of valuation tends to be arbitrary. We, therefore, answer the question against the Revenue and in favour of the assessee. As a result of this, the natural consequence would be the revival of the appellate order but we do not approve of that order either because though the actual cost of the films is undoubtedly is a relevant factor, it is not the be all and end all of the matter in the matter of valuation of the films. In our opinion, therefore, the matter will have to be re-heard and decided by the Tribunal and the Tribunal would then decide the question of valuation
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2002 (8) TMI 98
Income, General Principles, Rule Against Double Taxation - "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the salary income having already been assessed in the hands of the assessee's wife, Smt. Madhu Soni, under section 64(1)(ii) could not again be assessed in the hands of the assessee?" - the question referred is answered in the affirmative, i.e., in favour of the assessee and against the Revenue.
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2002 (8) TMI 97
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the penalty under section 271(1)(c) of the Income-tax Act, 1961 to the extent it was levied by reference to the addition of Rs. 19,000 made in the assessment?" - the assessee, in the instant case, has failed to discharge his onus of proof. The aforesaid Explanation was amended by the Taxation Laws (Amendment) Act, 1975, with effect from 1st April, 1976. The amendment was prospective in effect and in the year under reference, the amendment was not in force. Though the penalty proceedings are penal in nature, in the facts of this case, the onus on the Revenue has been duly discharged. - the question involved herein is answered in the negative, i.e., in favour of the Revenue and against the assessee.
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2002 (8) TMI 96
Gift Tax Act, 1958 - "1. Whether, on the facts and in the circumstances of the case, a firm is liable to be assessed as a taxable entity under the Gift-tax Act, 1958? - 2. Whether, on the facts and in the circumstances of the case, there was a gift made under the provisions of the Gift-tax Act? - 3. If the answer to the second question is in the affirmative, whether it is exempt under section 5(1)(xiv) of the Gift-tax Act?" - The first question referred is, answered in favour of the Revenue and against the assessee. - We, answer the last question also in favour of the Revenue and against the assessee.
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2002 (8) TMI 95
Reassessment, Export, Special Deduction - notice under section 148 - "(1) Whether, on the facts and in the circumstances of the case, was the Tribunal right in holding that the reopening of the assessment is valid, in a case where the assessment has been reopened under section 147 since the time to issue a notice under section 143(2) was over? - (2) Was the appellant entitled to benefit of section 80HHC(2)(a) of the Act as regards extension of time limit for bringing into India, the foreign exchange earned by the appellant?" - both the income-tax appeals are dismissed.
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2002 (8) TMI 94
Transfer Of Case - The petitioner has questioned the order dated July 26, 2002, passed by the Commissioner of Income-tax, Asansol, in exercise of the powers conferred upon him by section 127 of the Income-tax Act, 1961, and thereby transferred the petitioner's case from the Deputy Commissioner of Income-tax, Circle-3, Asansol, to the Deputy Commissioner of Income-tax, Central Circle, Ranchi. The petitioner has questioned the said order of transfer of the case on several grounds. - In the circumstances, the impugned order to the extent the petitioner is concerned, is liable to be and is hereby quashed and set aside with liberty to the Commissioner of Income-tax, Asansol, to consider the matter afresh in accordance with law after affording the petitioner an opportunity of personal hearing and thereafter to dispose of the same by a reasoned speaking order which shall be communicated to the petitioner within a period of six weeks from the date of communication of a copy of this order.
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2002 (8) TMI 93
Depreciation, Business Expenditure, Disallowance, Expenditure On Sales Promotion - "1. Whether the Income-tax Appellate Tribunal was justified in law in holding that depreciation allowance under section 32 of the Income-tax Act, 1961, was not allowable to the appellant-company in respect of the property purchased from Punjab Financial Corporation? - 2. Whether the Income-tax Appellate Tribunal was justified in law in disallowing Rs. 75,000 out of sales promotion expenses in the absence of any material to support it?" - there is no material on record to show that any part of the sales promotion expenditure was incurred for non-business purposes. The Tribunal has not given any basis whatsoever while confirming the disallowance to the extent of Rs. 75,000. All that the Tribunal observed was that the disallowance of Rs. 75,000 under this head will meet the ends of justice. The approach of the Tribunal in dealing with this aspect of the matter was erroneous and cannot be sustained.
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2002 (8) TMI 92
Export Markets Development Allowance, Weighted Deduction - "whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in directing the Assessing Officer to recompute the D.I.T. relief admissible to the assessee on the income derived from the foreign branch at Bangkok without reducing the deduction allowable under section 35B of the Income-tax Act, 1961?". - The Tribunal as also the Commissioner have completely missed the effect of the change in the law brought about by the Finance Act, 1983, which provided that no deduction under section 35B shall be allowed in relation to expenditure incurred on or after March 1, 1983. That amendment came into force with effect from April 1, 1983. As the assessment year with which we are concerned is 1984-85, the assessee is not entitled to claim any relief under section 35B in relation to the expenditure incurred on or after March 1, 1983. The question referred to us is, therefore, answered in favour of the Revenue and against the assessee.
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2002 (8) TMI 91
"Whether, on the facts and in the circumstances and having regard to the interpretation of the lease deed, the Tribunal was justified in confirming the valuation made by the Department in so far as it relates to the inclusion of reversionary value of the superstructure?" - It is apparent that the confusion that has crept in the orders of the Assessing Officer, is on account of the reliance placed on the valuation report which concerned the value of the interest of the lessor of the land, who would, at the end of the term of the lease, become entitled to ownership of the superstructure. That approach to valuation was wholly irrelevant so far as the joint lessees of the land who had put up the superstructure and who were required to pay wealth-tax on that superstructure were concerned. The question referred to us is therefore answered in favour of the assessee and against the Revenue.
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2002 (8) TMI 90
Business Expenditure - "Whether the loss of Rs. 1,10,534 has to be allowed as deduction from the total income for the assessment year 1974-75?" - In view of the ratio laid down by the Supreme Court in the decision in Haji Aziz and Abdul Shakoor Bros. v. CIT and in the facts and circumstances of the case, we have no hesitation to say that the loss sustained by the assessee as a result of the confiscation of the rice, which was confirmed by the Supreme Court, is not a commercial loss arising out of trade and it is only due to infraction of law by the assessee, therefore, such loss cannot be allowed as a deduction under the provisions of the Income-tax Act. - Accordingly, we answer the reference in favour of the Revenue and against the assessee.
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2002 (8) TMI 89
Estate Duty Act, 1953 - "whether, on the facts and circumstances of the case, the Appellate Tribunal was right in holding that there has been transfer attracting application of section 17 of the Estate Duty Act, 1953?" - The delay on the part of the deceased in drawing the remuneration and other perquisites to which he was entitled, cannot, in the circumstances, be regarded as a transfer by him of the undrawn salary and benefits to the company which would render a part of the assets of the company includible in his estate. In fact, the deceased had drawn most of the monies which had become due to him by way of remuneration and value of perquisites, prior to his death. The amount that was found due from his current account in the company was only Rs. 28,277. - The order of the Tribunal, therefore, cannot be sustained. The question referred to us is answered in favour of the assessee and against the Revenue.
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2002 (8) TMI 88
Business, Other Sources, Property Taken On Lease - "1. Whether, on the facts and circumstances of the case, the rental income from the Bank of Baroda was taxable under the head 'Business income' or 'Income from other sources'? - 2. Whether, on the facts and circumstances of the case, the interest difference on the extra amount of Rs. 2,50,000 could be allowed as a deduction?" - The answer to question No. 1 is in the affirmative, that is to say, the rental income from the Bank of Baroda was taxable under the head "Business income" and not "Income from other sources". The answer to question No. 2 is in the affirmative, that is to say, the interest difference on the extra amount of Rs. 2.50 lakhs was rightly allowed as a deduction. Both the questions are, therefore, answered in favour of the assessee and against the Revenue.
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2002 (8) TMI 87
"Whether, Tribunal was justified in deleting the addition of Rs. 97,973 by holding that giving of gifts and presents does not amount to hospitality and cannot be considered for disallowance as entertainment expenditure? - Whether, on the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal was justified in holding that the provisions of section 37(4) of the Income-tax Act, 1961, start with a non obstante clause and cover only section 37(1) of the Income-tax Act and, therefore, they are not supposed to apply to any other provisions of the Income-tax Act and further holding that since the guest house rent was paid and allowed under section 30 of the Income-tax Act, 1961, the provisions of section 37(4) could not be read to disallow any rent payable by the assessee and thereby deleting the disallowance/addition of guest house rent of Rs. 2,39,980?" - We answer both the questions in the negative, i.e., in favour of the Revenue and against the assessee.
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9911796707
