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1998 (11) TMI 39 - MADRAS HIGH COURT
Depreciation, Actual Cost, Salary, Meaning Of Salary, Literal Interpretation, Words And Phrases
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1998 (11) TMI 38 - MADRAS HIGH COURT
New Industrial Undertaking, Special Deduction ... ... ... ... ..... that is before the set off of deficit amounts brought forward. The Commissioner held that the relief due would be Rs. 1,66,184 and not Rs. 79,837. On further appeal, the Tribunal upheld the findings of the Commissioner of Income-tax (Appeals). For the assessment year 1974-75, the Income-tax Officer did not allow any deduction under section 80J. But, the Commissioner allowed it to the extent of the full amount and the Tribunal upheld the finding of the Commissioner. The Supreme Court in the case of Distributors (Baroda) P. Ltd. v. Union of India 1985 155 ITR 120, held that relief in respect of dividends received from a domestic company is available only with respect to the net amount as computed for the purpose of assessment to tax and not the actual amount received. Following the decision of the Supreme Court and for the reasons stated therein, we hold that the net amount is available for deduction and we answer the question in favour of the Revenue and against the assessee.
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1998 (11) TMI 37 - MADRAS HIGH COURT
Business Income, Property ... ... ... ... ..... ease from month to month or year to year, wherein it could be said that the building was being exploited by the owner to earn a rental income. Here the expression letting out is used only for a limited purpose. The building remains under the control of the owner. What is granted by the owner is only a licence for a prescribed fee for a specified period. This activity of the assessee can be described as a business carried on by the assessee with the intention of earning income from the building, the business being that of making available the building to others for a charge for a limited duration. The overall control of the building at all times being retained by the assessee. The Tribunal is therefore right in holding that the income derived by the assessee from making the building owned by it available to others for a limited period for various purposes is only business income. We therefore answer the question referred to us in favour of the assessee and against the Revenue.
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1998 (11) TMI 36 - MADRAS HIGH COURT
Depreciation, Plant, Building ... ... ... ... ..... that the hotel building owned by it should be treated as plant. That claim was negatived. The reasons given therein for reaching that conclusion are equally applicable here. A theatre building is primarily a building in respect of which depreciation can be claimed only in accordance with and at the rates prescribed for buildings and it cannot be treated as plant only on the ground that the assessee carries on business of running a theatre. The question referred to us is therefore answered in favour of the Revenue and against the assessee.
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1998 (11) TMI 35 - MADRAS HIGH COURT
Income From Other Sources ... ... ... ... ..... ested came from the assessee. In the absence of any evidence to show that the amount came from the assessee, the Tribunal came to the conclusion that there was no justification for this addition. Counsel for the Revenue submitted that having regard to the decision of the Supreme Court in the case of Jamnaprasad Kanhaiyalal v. CIT 1981 130 ITR 244wherein it was held that notwithstanding an assessment made under the voluntary disclosure scheme it is still open to the Revenue to examine the question as to the person to whom it really belongs, that the assessment made in the hands of the wife did not preclude the enquiry into the ownership of that income. The question herein, is not whether the enquiry can be made . Whether there was any material to sustain the Income-tax Officer s conclusion that this belonged to the assessee. The Tribunal has found that there was no such material. Our answer to the third question is, therefore, in favour of the assessee and against the Revenue.
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1998 (11) TMI 34 - MADRAS HIGH COURT
Wealth Tax, Net Wealth ... ... ... ... ..... circumstances, the Tribunal has rightly held that the amount had not accrued to the assessee in the relevant year. That decision of the Tribunal cannot be faulted. The Supreme Court in the case of CIT v. Hindustan Housing and Land Development Trust Ltd. 19861 161 ITR 524, held that the amount of additional compensation awarded to the owner of the land, for the compulsory acquisition of the land, which amount had been allowed to be drawn against the bank guarantee pending the decision in appeal, cannot be regarded as having accrued to the assessee even before the final decision. The interest of the Revenue is amply safeguarded by the undertaking which the assessee had given before the Commissioner of Income-tax (Appeals) on January 17, 1985, to offer for income-tax and wealth-tax assessments as and when the lottery amount was received by him after the final orders of the court. We answer the question referred to us in favour of the assessee and against the Revenue. No costs.
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1998 (11) TMI 33 - DELHI HIGH COURT
Reference, Property, Deductions, Question Of Law ... ... ... ... ..... ent of the facts of the case and refer the following question for the opinion of the High Court Whether on the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that the composition fee payable to the DDA is allowable deduction under section 24(1)(iv) of the Income-tax Act, 1961?
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1998 (11) TMI 32 - MADRAS HIGH COURT
Business Expenditure ... ... ... ... ..... re. If the assessee chooses to make such gifts out of the income received by the assessee in the course of his business, he can do so, but cannot claim it as a legitimate expenditure while computing his income for the purpose of taxation. The gifts made by an assessee carrying on business, on such occasions would be similar to that of any other person, who makes a gift on such occasion to his friends or relatives or official superiors or colleagues, such gifts being made out of taxed income. Though it is difficult to draw a line with precision demarcating business from personal relationships, nevertheless, it has to be drawn somewhere and the marriages within the family of business associates, friends and relatives cannot be regarded as occasions requiring an assessee carrying on business to make gifts as a matter of commercial expediency and claim the same as business expenditure. We, therefore, answer the question in favour of the Revenue and against the assessee. No costs.
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1998 (11) TMI 31 - MADRAS HIGH COURT
Recovery Of Tax
... ... ... ... ..... is an interested party as it is in the interests of the Revenue to make such a declaration and proceed to recover the vendor s arrears of tax from such person. The Supreme Court of India in its recent decision rendered in the case of TRO v. Gangadhar Viswanath Ranade (Decd.) 1998 234 ITR 188 has held that if the Department finds that the assessee has transferred a property to a third party with the intention to defraud the Revenue, the Revenue will have to file a suit under rule 11(6) of Schedule II to the Income-tax Act to have the transfer declared void under section 281 of the Income-tax Act. It is, therefore, clear that the Income-tax Officer had no jurisdiction to declare the transaction of sale to which the petitioners were parties as purchasers, as void. The impugned order, in so far as it affects the petitioners interest in the property is, therefore, set aside. The writ petitions are allowed accordingly. Consequently, W. M. P. Nos. 10903 and 26026 of 1994 are closed.
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1998 (11) TMI 30 - MADRAS HIGH COURT
Recovery Of Tax, Limitation ... ... ... ... ..... , the sale not having been held pursuant to the proclamation, despite the absence of any order of the court, which prevented the sale being held, no fresh proclamation can now be issued, as none of the circumstances visualized in the proviso to rule 68B are attracted so as to extend the period. The relief to be granted to the petitioner has now to be moulded in the light of the circumstances as they are now prevailing. It is not necessary to set aside the impugned proclamation of sale. It is sufficient to give a declaration that the sale not having been held pursuant to the proclamation no further proclamation of sale shall be issued in respect of the properties which had been attached prior to 1992. It is made clear that the contention of the petitioner that the deceased assessee was not the owner of the property at all is available to the petitioner and that claim is not to be regarded as having been negatived by this order. No costs. W. M. P. No. 5504 of 1996 is dismissed.
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1998 (11) TMI 29 - MADRAS HIGH COURT
Wealth Tax, Valuation Of Assets ... ... ... ... ..... he basis of the value finally fixed for the properties concerned in the assessment year 1982-83 ? The mere fact that the valuation report was received subsequent to the date of the assessment would not ipso facto make the valuation applicable to all the years up to the date of the assessment as the valuation made was with reference to a specific anterior date, namely, April 13, 1982. The assessment years in question are later years 1983-84 to 1986-87. The Commissioner has rightly directed the Wealth-tax Officer to redo the assessment for those years without binding him to adopt the report of the Valuation Officer given for the earlier year. The valuation is required to be made as on the valuation date and the report given with regard to the value made for an earlier valuation date, cannot in these circumstances ipso facto apply for determining the valuation for later years. The question referred to us is, therefore, answered in favour of the Revenue and against the assessee.
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1998 (11) TMI 28 - MADRAS HIGH COURT
Gift Tax, Trust ... ... ... ... ..... rusts Act because, while section 122 of the Transfer of Property Act contemplates the transfer of property to the donee and acceptance thereto on behalf of the donee, section 6 of the Trusts Act does not contemplate the transfer of property to oneself. We are in respectful agreement with what been held in that decision by the learned judges. The creation of the trust by the jeer, therefore, has only to be regarded as a vesting declaration which did not involve the transfer of the money which has been offered to him by way of padhakanikkai or sambhavanai, which amounts in fact were burdened with the obligation to apply the same for religious purposes and for the attainment of the objectives of the Mutt and, therefore, did not involve any gift to the trust which could attract gift-tax. The questions referred to us are answered in favour of the assessee and against the Revenue. The assessee is entitled to costs with a sum of Rs. 2,500 (rupees two thousand and five hundred only).
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1998 (11) TMI 27 - DELHI HIGH COURT
Penalty, Concealment Of Income ... ... ... ... ..... a finding that the amount of Rs. 30,000 was the income of the assessee. Impliedly he had recorded a finding that it was neither any loan nor a deposit. The question of the provisions of section 269SS having been contravened was then lost in oblivion and could not have rearisen at any subsequent stage or in subsequent proceedings. The penalty imposed under section 271D read with section 269SS cannot, therefore, be sustained. C.W.P. No. 3868 of 1997, therefore, deserves to be allowed and the penalty deserves to be quashed. For the foregoing reasons, C.W.P. No. 3870 of 1997 laying challenge to the quantum assessment proceedings is dismissed. C.W.P. Nos. 3869 of 1997 and 3868 of 1997, respectively, laying challenge to penalty orders under section 271(1)(c) and section 271D and the orders maintaining the same in revision are allowed and the two penalties are hereby quashed and set aside. All the three petitions stand disposed of, accordingly, though without any order as to costs.
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1998 (11) TMI 26 - MADHYA PRADESH HIGH COURT
Reassessment, Jurisdiction, Service Of Notice, Condition Precedent, Limitation, Notice ... ... ... ... ..... . 2593 of 1997) and dated March 31, 1998, issued to Shri Ajay Singh (annexure P-2 to Writ Petition No. 1723 of 1998) under section 148(2) of the Act together with the notices dated March 31, 1998, issued to Shri Arjun Singh and Smt. Saroj Singh (annexures P-12 and P-13 to Writ Petition No. 2593 of 1997) and dated March 31, 1998, issued to, Shri Ajay Singh (annexure-P-2 to Writ Petition No. 1723/98) as passed by the Assistant Commissioner of Wealth-tax, Circle-I, Bhopal, are hereby quashed and the respondents and/or all other authorities under the Act and the Wealth-tax Act, concerned with or authorised in the matter are restrained from proceeding or taking any step or action against the petitioners in both the writ petitions, in any manner, whatsoever, in connection with or in respect of the land and the house known as Kerwa House belonging to them jointly, by reopening their assessments, already made under section 143/144A of the Act and section 16(3) of the Wealth-tax Act.
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1998 (11) TMI 25 - MADRAS HIGH COURT
Accounting, Accrual Of Income ... ... ... ... ..... relevant to these assessment years. Having regard to the method of accounting that had been followed by the assessee, which was mercantile, interest that had accrued was necessarily to be regarded as part of the income of the assessee. The penal interest moreover is of the same character as interest. Penal interest becomes payable on account of the delay in payment of the interest and the interest is treated on accrual basis. It is difficult to find justification in law for treating the penal interest in a different manner-the two go together. The Tribunal, therefore, was in error in holding that the assessee was employing the actual receipt basis or cash system of accounting in respect of the penal interest, and deleting the addition of penal interest amount of Rs. 27,87,113 in 1979-80 and of Rs. 25,04,368 in 1980-81 as not liable to tax in the hands of the assessee-company. The question referred to us is therefore answered in favour of the Revenue and against the assessee.
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1998 (11) TMI 24 - MADRAS HIGH COURT
... ... ... ... ..... he Appellate Assistant Commissioner. A similar question in the case of CWT v. M. V. Arunachalam 2000 241 ITR 686 (Mad), was considered and held that the order of the Tribunal cannot be ignored in determining the quantum of liability of the company that it would be a relevant piece of evidence to determine the value of liabilities as provided in rule 1D and that, therefore, the Tribunal should go into the question again and determine what was the exact quantum of sales tax liability towards penalty on the valuation date and, on that basis, direct the Wealth-tax Officer to determine the value of the shares in terms of rule 1D. Following the above decision and for the reasons stated therein, we remit the matter back to the Appellate Tribunal, to go into the question again and determine what was the exact quantum of sales tax liability towards penalty on the valuation date and, On that basis, direct the Wealth-tax Officer to determine the value of the shares in terms of rule 1D.
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1998 (11) TMI 23 - MADRAS HIGH COURT
New Industrial Undertaking In Backward Area, Special Deduction ... ... ... ... ..... allowed some relief and directed the Assessing Officer to modify the assessment and recompute the total income by allowing deduction under section 80HH only with reference to the profit of Rs. 25,230 from Hosur Plant No. II. The Tribunal held that the quantification of deduction under section 80HH was required to be made with reference to the profits of Plant II at Hosur, it being an industrial undertaking by itself and so the relief under section 80HH computed by the Commissioner under section 263 was wrong. This court in its order in Tax Case No. 1047 of 1987, dated April 28, 1998 (CIT v. Sundaravel Match Industries (P.) Ltd. 2000 245 ITR 605 considered an identical question and held that deduction under section 80HH is allowable only after setting off the losses and answered the question in favour of the Revenue. Following the above decision and for the reasons stated therein, we answer the question of law referred to us in favour of the Revenue and against the assessee.
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1998 (11) TMI 22 - MADRAS HIGH COURT
Purchase Of Immovable Property By Central Government, Valuation Of Property ... ... ... ... ..... ct filed a suit and the suit is pending. The authority has not chosen to discount any part of the rate at which the smaller plot had been sold for the purpose of determining the market value of this plot. This approach of the authority is again one which cannot be regarded as in consonance with the law declared by the Supreme Court with regard to the valuation of the property. Plots which are smaller in size may fetch higher value and it cannot be assumed that larger plots though in the same vicinity will also fetch the same price. Some adjustment has to be made in the price by reason of the size of the plot being larger. As the authority has failed to apply its mind to all the relevant aspects, the order of the authority cannot be sustained and the same is set aside. The matter is remanded to the authority for passing a fresh order in accordance with law and in the light of the observations made in this order, after hearing the parties. Writ petitions are allowed. No costs.
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1998 (11) TMI 21 - GUJARAT HIGH COURT
Income From Other Sources, Interest ... ... ... ... ..... of purchase of plant and machinery even before commencement of the business of the assessee. The court also held An assessee-company may have raised its capital by issue of shares or debentures or by borrowing. But when that capital or a portion of it was utilised for whatever reason, even for a short period, to earn interest, that interest must be treated as a revenue receipt and will have to be taxed accordingly. Following the aforesaid decision of the Supreme Court, this court in the assessee s own case for the assessment year 1977-78 in Income-tax Reference No. 295 of 1983, decided on April 16, 1998 (CIT v. Petro-fils Co-operative Ltd. 2000 241 ITR 139), had answered the like question against the assessee and in favour of the Revenue. In the aforesaid circumstances, the question referred to us in this case is also answered in the negative, in favour of the Revenue and against the assessee. This reference stands disposed of accordingly. There shall be no order as to costs.
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1998 (11) TMI 20 - MADRAS HIGH COURT
Depreciation, Actual Cost, New Industrial Undertaking, Computation Of Capital, Business Expenditure, Export Markets Development Allowance
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