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Case Laws
Showing 441 to 460 of 492 Records
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1998 (2) TMI 53 - MADRAS HIGH COURT
Company, Surtax, Computation Of Capital ... ... ... ... ..... ow the Appellate Tribunal came to the conclusion that the provision for bad debts should be included as part of the capital for the purpose of surtax, we are of the opinion that the Appellate Tribunal should consider the question afresh in the light of the tests laid down by the Supreme Court in CIT v. Jyoti Ltd. 1996 219 ITR 388 and State Bank a Patiala v. CIT 1996 219 ITR 706 (SC). Though technically, the second question of law is liable to be answered in favour of the Revenue, the Tribunal is directed to go into the question in the light of the two decisions of the Supreme Court cited supra and determine whether the reserve for bad debts can be taken as part of the capital. Accordingly, we answer the questions of law as under The first question in the affirmative and against the Department. The second question in the negative and in favour of the Department subject to the observation made above. The third question in the negative and in favour of the Department. No costs.
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1998 (2) TMI 52 - MADRAS HIGH COURT
Gift Tax, Valuation Of Unquoted Equity Shares ... ... ... ... ..... ts of the case. It is also made clear that it is always open to the Appellate Tribunal to ascertain whether there was any declaration of dividend during the earlier accounting years and determine the question in the light of the two decisions of this court in the case of CGT v. Sundaram Industries Ltd. 1996 222 ITR 710and in the case of CGT v. K. Mahesh 1997 225 ITR 765. Since the Tribunal in the absence of any material has come to the conclusion that the discount of 30 per cent. of the value of share should be granted, we answer the question of law referred to us in favour of the Revenue, but leaving the matter open to the Tribunal to consider the question again in the light of the materials that may be produced at the time of hearing of the appeal by the Tribunal. We answer the question of law referred to us in the negative, against the assessee and in favour of the Revenue, subject to the direction given above, but, in the circumstances, there will be no order as to costs.
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1998 (2) TMI 51 - MADRAS HIGH COURT
Business Expenditure ... ... ... ... ..... vate Limited 1983 144 ITR 57, wherein the court dealt with a case of an award made pursuant to a claim for damages on account of breach of contract, and held that such arbitration award does not amount to settlement of contract for the purpose of section 43(5) of the Act. That judgment is not of any assistance to the Revenue in this case. Counsel also referred to a decision of the Bombay High Court in the case of CIT v. Kanmani Tubes Ltd. 1994 207 ITR 298, wherein the court observed that in deciding the character of the transactions, what is important to consider is the distinctive character of such transactions. In each case it is the total effect of all the relevant facts and circumstances that determines the character of the transaction. We are entirely in agreement with that view. The questions referred for our decision are, therefore, answered in the affirmative, against the Revenue and in favour of the assessee. The assessee is entitled to costs in the sum of Rs. 1,000.
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1998 (2) TMI 50 - MADRAS HIGH COURT
Advance Tax ... ... ... ... ..... st cannot be levied in cases where the estimate is filed without paying the further amounts payable as advance tax. The language employed in these two provisions is unambiguous and does not admit any doubt as to what the assessee is required to do, and as to what is permissible for the Income-tax Officer to do. The levy of interest on the amount of the advance tax which had not been remitted along with the estimate was, therefore, clearly an error committed by the Income-tax Officer and which error was apparent on the face of the record capable of being corrected under section 154 of the Act. Learned counsel for the Revenue fairly brought to our notice the decision of the Patna High Court in the case of CIT v. Bihar Journals Limited 1992 198 ITR 458 wherein a similar view has been taken. Our answer to the questions referred to us, therefore, is in the affirmative, against the Revenue and in favour of the assessee. The assessee is entitled to its costs in the sum of Rs. 1,000.
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1998 (2) TMI 49 - MADRAS HIGH COURT
Deduction, Estate Duty ... ... ... ... ..... nt attributable to the value of the maintenance of the wife was not deductible, in computing the net principal value of the estate passing on the death of the deceased, in the absence of any evidence, to show that the estate of the deceased was burdened with any debt or incumbrance by reason of the failure of the deceased to act up to his statutory obligation. What was said about the widow applies with equal force to the claim of the daughter for maintenance. Admittedly, no charge had been created on the assets of the deceased. The answer to the question of law that has been referred to us, therefore, is that the Tribunal was right in law in confirming the rejection of the applicant s claim for deduction of a sum of Rs. 1,00,000 as charge for maintenance of wife and unmarried daughter and the provision for marriage expenses of the unmarried daughter in computing the value of the estate for the purpose of the estate duty. The Revenue is entitled to costs in the sum of Rs. 500.
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1998 (2) TMI 48 - MADRAS HIGH COURT
Developement Rebate, Actual Cost ... ... ... ... ..... Ltd. 1977 109 ITR 646 and Arvind, Mills Ltd. 1978 112 ITR 64 (Guj), and their Lordships of the Supreme Court clearly said that the language of section 43A is perfectly clear, and it is the clear requirement of the statute that, for the purpose of development rebate any increase or decrease in the actual cost consequent on fluctuations in the exchange rate should not be taken into account. It is not necessary to attribute any particular reason for the provision when the language of the section is otherwise plain and unambiguous. On the face of the language of section 43A(2), it would not be right to permit the assessees to claim development rebate on the increased cost. In this view of the matter, the aforesaid question has to be necessarily answered against the assessee, and, therefore, it is answered in the negative and in favour of the Revenue. This tax case is thus disposed of. There shall however, be no order as to costs, on the facts and in the circumstances of the case.
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1998 (2) TMI 47 - MADRAS HIGH COURT
Firm, Registration, Condition Precedent, Specification Of Shares Of Partners ... ... ... ... ..... Officer had rightly registered the firm, but erred in cancelling the same five years later. The ground on which cancellation was effected, namely, that the firm was not genuine, in the circumstances, is wholly unsustainable. The only reason given for holding that the firm is not genuine is the absence of a separate partnership deed. Form No. 11A read along with the original partnership deed shows that the firm is genuine. The Appellate Tribunal, in our view, was right in holding that the continuation of registration granted to the firm for these assessment years could not have been cancelled on the ground that, on the attainment of majority by one of the minors admitted to the benefits of partnership, no new deed of partnership was drawn up by the partners. We, therefore, answer the question referred to us in the affirmative, against the Revenue and in favour of the assessee. Having regard to the circumstances of the case, we direct the parties to bear their respective costs.
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1998 (2) TMI 46 - MADRAS HIGH COURT
Depreciation, Extra Shift Allowance, Business Expenditure, Accounting, Sales Tax ... ... ... ... ..... nt as a deduction. Counsel referred to the case of Pope the King Match Factory v. CIT 1963 50 ITR 495 (Mad). That was a case which related to a demand for excise duty. The assessee had debited the amount demanded in its accounts, and it was on that basis, this court held that the assessee was entitled to the deduction as the demand as also the debit in the accounts had been made in the same assessment year. In the instant case, we are concerned with the assessee s claim for deduction for amounts payable as sales tax in a year in which the liability had not accrued and payment had not been made. The assessee was not entitled to any deduction for a liability which related to an earlier year and which liability had not been discharged during the year of the assessment. Our answer to the first question referred to us, therefore, as already stated above is in the negative, in favour of the Revenue and against the assessee. In the circumstances, there will be no order as to costs.
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1998 (2) TMI 45 - MADRAS HIGH COURT
Gift Tax, Deemed Gift ... ... ... ... ..... hat the assessees returned the value of the shares transferred by them in a recognised method of valuation and it is not permissible for the Gift-tax Officer to adopt a different method of valuation which might yield a higher value. Therefore, it is not open to the Gift-tax Officer to hold that there was a deemed gift within the meaning of section 4(1)(a) of the Act by choosing to adopt another method of valuation. In our opinion, the Tribunal has come to the correct conclusion in holding that there was no deemed gift. As the Tribunal found that it was a bona fide transaction and the value as returned by the assessee was arrived at on the basis of a recognised method of valuation, we do not find any infirmity in the order of the Appellate Tribunal. Accordingly, we answer the common questions of law referred to us in the case of all the assessees in the affirmative, against the Revenue and in favour of the assessees. The assessees are entitled to the costs of Rs. 750 one set.
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1998 (2) TMI 44 - MADRAS HIGH COURT
Capital Or Revenue Expenditure, Revenue Expenditure ... ... ... ... ..... t had been created and no enduring benefit derived from that work. While the expenditure incurred in bringing a building into existence is undoubtedly capital in nature, the repairs and replacements to portions of the building for the continued enjoyment of that building is not capital expenditure. The fact that new material has to be used while replacing a worn out or damaged part of portion of a building does not result in a new asset being created. Every part of the building is not to be regarded as a separate asset. It is the structure as a whole which has utility and repairs and replacements to that structure for the continued utility of the structure as a whole, cannot be regarded as capital expenditure. Replacement of hardboard set on wooden frames with thermostat wood insulation boards set in aluminium frames is undoubtedly revenue expenditure and does not constitute capital expenditure. The question, is therefore, answered against the Revenue and in the affirmative.
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1998 (2) TMI 43 - MADRAS HIGH COURT
Interest, Heads Of Income, Deductions, Income From Other Sources, Capital Expenditure, Shipping Company
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1998 (2) TMI 42 - MADRAS HIGH COURT
Salary, Termination Of Service ... ... ... ... ..... he earlier decision of this court in the case of G. N. Badami 1999 240 ITR 263, would apply to the facts of this case. The provisions of section 17(3)(i) of the Act are clear that any compensation received at or in connection with the termination of the employment by its employer, is liable to be treated as profit in lieu of salary. It is not disputed that the amount received is compensation and it was received by the assessee from his employer in connection with the termination of his employment. The conditions prescribed under section 17(3)(i) of the Act are fully satisfied in this case and the amount of compensation received by the assessee is liable to be treated as salary and, therefore, we are of the view that there is no error in the order of the Tribunal in holding that the amount received by the assessee is taxable as salary and, accordingly, we answer the question of law referred to us in the affirmative, against the assessee and in favour of the Revenue. No costs.
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1998 (2) TMI 41 - MADRAS HIGH COURT
Concealment Of Income, Penalty ... ... ... ... ..... ispute certain disallowances but that does not absolve the Revenue from proving the mens rea of quasi-criminal offence. The Department had not produced any materials whatsoever to show that the assessee had intentionally concealed a part of his income. The levy of penalty was, therefore, wholly uncalled for. Counsel for the Revenue fairly brought to our notice that the decision of this court in CIT v. C. J. Rathnaswamy 1997 223 ITR 5, wherein also this court, dealing with the case of addition made to the income on the basis of the agreement of the assessee, held that in the absence of any materials available with the Department to show that the income had been concealed by the assessee, mere addition to the income at the instance of the assessee would not warrant a finding of concealment or the levy of penalty. Our answer to the question that has been referred to us is, therefore, in the affirmative and against the Revenue. The assessee shall be entitled to costs of Rs. 500.
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1998 (2) TMI 40 - MADRAS HIGH COURT
Business Expenditure, Disallowance, Company, Surtax ... ... ... ... ..... 1979-80 and though it was incurred prior to April 1, 1979, the law to be applied is the law in force on the first day of April of the assessment year and since section 37(2B) of the Act came into full force on April 1, 1979, section 37(2B) of the Act would apply and the expenditure incurred by the assessee by way of advertisement in the souvenir published by the Indian National Congress is not allowable expenditure for the year 1979-80. The amendment of law has not indicated anywhere any contrary intention making it inapplicable to the expenditure in question. Therefore, we are of the view that the Tribunal is not correct in holding that the provisions of section 37(2B) of the Act did not apply to the expenditure incurred by the assessee. As per the amendment the expenditure is not allowable as a business expenditure. Accordingly, we answer both the questions of law referred to us at the instance of the Revenue, in favour of the Department and against the assessee. No costs.
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1998 (2) TMI 39 - MADRAS HIGH COURT
HUF, Partial Partition, Deduction U/S 80L ... ... ... ... ..... ibunal deleting the addition of Malaysian income in the hands of SM. M. Muthappa Chettiar, a member of the assessee family, came up for consideration before this court in T. C. No. 136 of 1985, and this court by its judgment dated March 15, 1994, held that the income from Malaysia cannot be subjected to tax in the hands of SM. M. Muthappa Chettiar and, consequently, the income was deleted in his assessment. The effect of the decision is that the assessee family cannot be said to have a member who is having an income exceeding the taxable limit and the assessee family cannot be regarded as a specified Hindu undivided family disentitling it to claim the relief under section 80L of the Act. We are of the view that the Tribunal was correct in holding that the assessee was entitled to deduction under section 80L of the Act. We answer the second question of law also in the affirmative, against the Revenue and in favour of the assessee. The assessee is entitled to costs of Rs. 750.
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1998 (2) TMI 38 - MADRAS HIGH COURT
Capital Gains, Transfer Of Property ... ... ... ... ..... time had been taken. Since the transfer was from the company to its shareholders it was open to them to take a decision in their favour and transfer the asset based on the book value only. This, however, could not go further and entitle them to further benefits. Hence, there could be no justification for holding that for the property which had been sold any other value could be taken except that which had been shown in the resolution of the company transferring the property as the value of acquisition of the assets. The above quoted decision is applicable on all fours to the facts of the instant case. On the rationale or reasoning projected by the said decision, we are of the view that the question posed for consideration has to be necessarily answered in favour of the Revenue and against the assessee and, accordingly, we answer the question. In fine, this tax case fails and the same is dismissed. There shall, however, be no order as to costs, on the facts and circumstances.
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1998 (2) TMI 37 - MADRAS HIGH COURT
Business Expenditure, Disallowance Of Expenditure, Expenditure On Sales Promotion ... ... ... ... ..... t crystal clear what shall not be allowed as a deduction in computing the income chargeable under the head Profits and gains of business or profession . If the correct expenditure incurred by the assessee on any one or more of the items specified in sub-section (3B) exceeds one hundred thousand rupees, then twenty per cent. of such excess shall not be allowed as a deduction in computing the income chargeable under the head Profits and gains of business or profession . It is thus crystal clear that what shall not be allowed as a deduction in computing the income chargeable under the head Profits and gains of business or profession is, after all, an ascertainment of fact from the accounts of the assessee-dealers and nothing further. Therefore, the order of the Tribunal in rejecting the reference, not as a pure question of law, cannot at all be found fault with. In this view of the matter, this reference application deserved to be dismissed and the same is accordingly dismissed.
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1998 (2) TMI 36 - MADRAS HIGH COURT
Remand, Reassessment ... ... ... ... ..... ay be permissible for the Tribunal to reconsider its views. On the other hand, if the Tribunal disposes of the appeal while passing the order of remand and another appeal comes before the Tribunal, against the order passed after the remand, it has no power to reconsider the finding or opinion. Questions which have become final and concluded by the remand order cannot be reopened. It has been held in the decision in S. P. Gramophone Co. v. ITAT 1986 160 ITR 417 (P and H) that ...if the correctness of the remand order was not challenged through appropriate proceedings, it would not be open to review it when the matter comes again before that authority in appeal or revision against the order passed by the authorities below in accordance with the remand order. Following the above decisions we uphold the view taken by the Tribunal that the earlier orders of the Tribunal dated July 31, 1978, had become final. We answer this question of law in the negative and against the assessee.
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1998 (2) TMI 35 - MADRAS HIGH COURT
Business Income, Profession, Firm, Rate Of Tax ... ... ... ... ..... s. E.S.I. Corpn. AIR 1993 SC 252 wherein the Supreme Court held that the activity is a shop for the purpose of Shops and Establishments Act as the activity carried on by a shipping, clearing and forwarding agency is a commercial activity. The assistance rendered by the clearing and shipping agent to those who import or export by attending to the documentation and ensuring the clearance of goods, cannot be regarded as profession based on intellectual attainments or personal service rendered on account of possession of specialised skill and knowledge based on higher learning and intellectual skill. 8. The Tribunal, therefore, was in error in holding that the assessee which admittedly carried on the business of clearing and shipping agents is entitled to be taxed at rates admissible to a professional firm. 9. Our answer to the question referred to us is, therefore, in the negative, in favour of the Revenue and against the assessee. The Revenue is entitled to costs of Rs. 1,000.
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1998 (2) TMI 34 - MADRAS HIGH COURT
Business Expenditure, Loss ... ... ... ... ..... up of plant and machinery and commencement of production are the material factors for deciding as to whether as business has commenced. 4. In this case on the facts found, the assessee had set up the unit after installing the requisite plant and machinery, and had commenced the production but before the end of the relevant accounting year, it had been unable to sell the product manufactured as that product did not meet the specification fully. The fact that the product was not marketable by reason of the deficiency in quality, does not dissentitle the assessee from claiming that the business had commenced, though no profit was earned and only a loss was incurred in that year. 5. The view of the Tribunal that the assessee had commenced the business during the relevant year previous to the asst. yr. 1973-74, and that it is entitled to have its loss computed is, therefore, affirmed. The reference is answered in favour of the assessee, in the affirmative and against the Revenue.
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