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2005 (6) TMI 38 - GAUHATI HIGH COURT
... ... ... ... ..... sion of the Act has to be essentially a member of a Scheduled Tribe notified under the Scheduled Tribes Order to be so for the area(s), must be a permanent resident thereof and his income has to accrue from any source located therein. It is only if the above three conditions co-exist that the benefit envisaged under the above provision of the Act would be available. The interpretation provided to section 10(26) of the Act by the departmental and other authorities to the contrary as is sought to be relied upon on behalf of the petitioners, in view of the judicial determination made in N. Takin Roy Rymbai 1976 103 ITR 82 (SC) and in Dr. Curzon G. Momin 1973 92 ITR 425 (Gauhati) as well as the above is inconsequential and is of no assistance to the petitioners. The petitioners therefore cannot be adjudged to be eligible for the exemption under section 10(26) of the Act. In the wake of the above, I do not find any merit in the petitions, which are accordingly dismissed. No costs.
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2005 (6) TMI 37 - BOMBAY HIGH COURT
Sufficient consideration for the transfer of assets - "(1) Whether Tribunal was correct in law in holding that the trust created by the assessee for the benefit of his minor daughter in obedience to the terms of decree of divorce passed against him under the provisions of the Parsis Marriage & Divorce Act, 1936, in a suit brought against him by his wife, was for adequate consideration and, therefore, would not fall within the scope of section 64(1)(vii) of the Income-tax Act, 1961?" - The trust was created pursuant to a legal obligation on the part of the assessee and this by itself was sufficient consideration for creation of the trust by way of settling a sum of Rs. 5,50,000, as corpus, the income from which is to be applied for the maintenance of the minor daughter Farida - Since in this case consideration has passed between the settlor and the trust the question of excluding the income from the purview of section 64(1)(vii) does not arise. – no infirmity in tribunal’s finding
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2005 (6) TMI 36 - GUJARAT HIGH COURT
"1. Whether, Tribunal was right in law in holding that the amount of leave salary paid to the retiring employees did not constitute salary as defined in Explanation 2 to section 40A(5) for the purpose of limiting the expenditure under that section? 2. Whether Tribunal was right in law in holding that the amount of statutory liability of sales tax, ESI contribution, P.F. contribution, etc., paid after the close of the previous year but before the due date for filing of return of income under section 139(1) was an allowable deduction in the AY 1984-85 when the proviso to section 43B was inserted w.e.f. 1st April, 1988?" - Question No. 1 is answered in the negative, i.e., in favour of the Revenue and against the assessee. Question No. 2 is accordingly answered in the affirmative, i.e., in favour of the assessee and against the Revenue.
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2005 (6) TMI 35 - KERALA HIGH COURT
Estate Duty Act, 1953 - interest on refunds - whether the Revenue is liable to pay interest on the amount due as refund of estate duty which became payable on account of the orders of the Appellate Tribunal, in the absence of any specific provision in the Estate Duty Act, 1953, for payment of interest on refunds - I am of the considered view that while dealing with the provisions of a taxing statute, an assessee becomes entitled to interest on refunds only if the statute itself specifically provides for interest and not otherwise. - The result of my above finding is that the petitioner is not entitled to interest on the amount of estate duty refunded to her in accordance with order of the Appellate Tribunal.
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2005 (6) TMI 34 - KERALA HIGH COURT
DTAA - "(i) Whether the provisions of the Double Taxation Avoidance Agreement between India and Malta are applicable to income arising in India within the previous year relevant to the assessment year 1996-97? - (ii) Whether the Tribunal went wrong in denying the benefits of the DTAA between India and Malta to the appellant?" - It is very clear that in India, benefit can be availed of only for the fiscal year starting from April 1, 1996 to March 31, 1997, starting after the first day of the next calendar year following in which the agreement came into force (February 1995). - We cannot rewrite the words in the agreement merely because it will be more beneficial to the assessee. Here, when the words are clear, there is no necessity to go into the intention of the Governments in making the treaty. - The plain meaning has to be adopted in taxation matters especially when there is no ambiguity. We agree with the view adopted by the Tribunal and the Revenue. Therefore, the questions are answered in favour of the Revenue and the appeal is dismissed.
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2005 (6) TMI 33 - KARNATAKA HIGH COURT
Valuation of land - if sale of the land or the property is subject to restrictions under certain Central or State legislation such as the Urban Land Ceiling Act, the Karnataka Land Reforms Act, etc., the property or the land has to be valued only after taking note of the restrictions and prohibitions which will have the effect of depressing the value, which the land would fetch if sold free from any restrictions and prohibitions, for the reason, if there are such restrictions, the value of the property or land would normally be reduced, but at the same time, it cannot be said that it would fetch only the maximum compensation payable under the Urban Land Ceiling Act. - section 7 of the Wealth-tax Act, assumes that there is a hypothetical open market and there are hypothetical purchasers and hypothetical bids and hypothetical sale to a person prepared to give the highest value, subject to all such restrictions and prohibitions contained in the Ceiling Act.
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2005 (6) TMI 32 - GUJARAT HIGH COURT
"Whether, the Appellate Tribunal was right in law and on facts in holding that what was sold by the assessee-firm to the limited company was its running business, as a going concern together with all the assets and liabilities and the provisions of section 41(2) cannot be invoked?" - Supreme Court itself has in a similar fact situation in the case of CIT v. Electric Control Gear Manufacturing Co. distinguished its own decision in Artex Manufacturing Co. by holding that there was nothing to indicate the price attributable to the assets like machinery, plant or building out of the total consideration amount and merely because depreciation had been allowed, it could not be said that the balance was the excess amount between the price and the written down value. – therefore there is no infirmity in tribunal’s order
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2005 (6) TMI 31 - BOMBAY HIGH COURT
Co-operative sugar factory – income of society - various funds/deposits collected/deducted by the assessee-society out of the sugarcane purchase price payable to the cane growers - addition on account of non-refundable deposits (NRD), interest on non-refundable deposits, the C.M's relief fund, cane development fund, education fund, college fund, famine relief fund, sugarcane development fund, small savings fund – Whether tribunal is justified in deleting the additions holding that various funds/deposits collected by the assessee-society out of sugarcane purchase price payable to the cane growers are not the trading receipts of the assessee
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2005 (6) TMI 30 - BOMBAY HIGH COURT
Penalty u/s 272A(2) – Failure to file statement in Form No. 52A for each of the assessment year, within 30 days from the expiry of the financial year. - In response to the SCN, he explained that it was his first and last venture which had flopped and due to the ignorance of legal formalities, he could not submit the statements. - Tribunal set aside the order of the Assessment Officer holding that due to the ignorance of the provisions of law, he had failed to submit the statements and as soon as he came to know about the requirement, he had submitted the same - Whether Tribunal was justified in law in deleting the penalty of Rs. 1,40,000 levied under section 272A(2) read with section 285B of the Income-tax Act?" - there is a rule that ignorance of law is no excuse but there is no presumption that every one knows the law – Held that Tribunal was justified in quashing the order of penalty
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2005 (6) TMI 29 - KARNATAKA HIGH COURT
Income escaping assessment – reopening of assessment - reason to believe "Whether, Tribunal was right in holding that the assessee had not disclosed all the primary facts necessary for completing the assessment, as available with the assessee, and before completion of the original assessment and hence, the Assessing Officer had jurisdiction to reopen the assessment under section 147(a) of the Act?" - In the instant case, the notice issued under section 148 of the Act is dated September 24, 1979, much beyond the period of limitation prescribed under section 149 - the question of law referred for our opinion is answered in the negative, i.e., in favour of the assessee and against the Revenue
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2005 (6) TMI 28 - KARNATAKA HIGH COURT
Demand for payment of tax – TDS – Held that the Revenue is to be definitely restrained in terms of section 205 from enforcing any demand on the assessee-petitioner in so far as the demand with reference to the amount of tax which had been deducted by the tenant of the assessee in the present case, and assuming that the tenant : had not remitted the amount to the Central Government - Only course open to the Revenue is to recover the amount from the very person who has deducted, and not from the petitioner - writ petition is allowed in part and the demand under the impugned notice, in so far as it relates to the demand for payment of tax, which had already been deducted by the tenant of the petitioner stands quashed. The Revenue is restrained from enforcing such demand as against the petitioner either by raising a demand or by any other coercive method. It is open to the Revenue to realize the amount from the other person and if the assessee pays it voluntarily receive it, but not otherwise. Rule issued and made absolute.
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2005 (6) TMI 27 - GUJARAT HIGH COURT
Penalty levied under section 271(1)(a) – delay in filing the return - reasonable cause to file the return in time - it is apparent that the assessee had tendered an explanation before the Income-tax Officer in response to the show-cause notice issued by him, such explanation has been ignored by the Income-tax Officer in entirety by stating that no explanation has been tendered and in the circumstances, the order levying penalty suffers from violation of the principles of natural justice and vice of non-application of mind and cannot be allowed to stand. The Tribunal was, therefore, justified in holding that the order levying the penalty was bad in law
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2005 (6) TMI 26 - GUJARAT HIGH COURT
Assessee, a co-operative society, is engaged in the business of banking - "Whether the appellate authority was right in law in confirming the order of the Commissioner of Income-tax (Appeals) deleting the addition of Rs. 1,80,95,811 in respect of fixed deposit and Rs. 21,71,500 in respect of interest?" - Held that the Tribunal was right in law in confirming the order of the Commissioner of Income-tax (Appeals) deleting the addition of Rs. 1,80,95,811 in respect of fixed deposits and Rs. 21,71,500 in respect of the interest.
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2005 (6) TMI 25 - MADRAS HIGH COURT
Long-term capital gains - sale of factory along with machineries, furniture - exemption under section 54E - "(i) Whether Tribunal was right in upholding the Commissioner of Income-tax (Appeals) order that the sale of factory along with machineries, furniture shall be treated as long-term capital gains in spite of the fact that depreciation had been claimed on the building, machinery and furniture? (ii) Whether the proviso to section 50 would be applicable in respect of depreciable assets sold along with non-depreciable assets sold in a single transaction of sale?" – Held that Land is not a depreciable asset. Section 50 deals only with transfer of depreciable assets. Once the land forms part of the assets of the undertaking, and the transfer is of the entire undertaking as a whole, it is not possible to bifurcate the sale consideration to a particular asset. – Hence revenue’s appeal is dismissed
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2005 (6) TMI 24 - UTTARANCHAL HIGH COURT
"Whether Tribunal was legally correct in holding that there is no scope of grossing up and that the income determined on notional basis in accordance with section 44BB, was not liable to be grossed up under section 195A?" - whether, the concept of multiple stage grossing up of income is applicable to the deemed profits derived by the NRC under section 44BB. Whether, that concept can be applied by the Department to compute income falling under section 44BB? – Department’s contentino, that in the case of tax protected contracts, section 195A was attracted and, therefore, the Department was entitled to compute the deemed profits derived by the NRC by applying the method of multiple stage grossing up of income, doesn’t have any merit – Further, the fact that TDS is deductible under section 195A from the sum payable does not mean that the contractor is assessable for that receipt. - We answer this question in the affirmative, i.e., in favour of the assessee and against the Department.
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2005 (6) TMI 23 - MADHYA PRADESH HIGH COURT
Alternative remedy - When the efficacious remedy of statutory appeal and then further statutory appeal is provided and the same can be availed of then, in that event, the writ court should not exercise its extraordinary discretion in entertaining the writ for challenging the impugned order passed by the Commissioner under section 263 of the Act - What this court in writ cannot decide, the appellate court can always decide. It is for the reason that the jurisdiction of appellate court under section 253(1)(c) ibid is quite large and wide whereas, the writ court cannot examine the facts like an appellate court. Even the question of merger cannot be decided in isolation but needs to be decided on the facts
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2005 (6) TMI 22 - BOMBAY HIGH COURT
Petitioners under the Voluntary Disclosure Scheme, 1997 had filed a declaration, disclosing an income of Rs. 10 lakhs. - The basic dispute in the above petition is that the entire tax liability was not paid within a period of three months as contemplated under the Scheme - Shri Rao, learned counsel for the respondent states that the respondent has already adjusted Rs. 1,03,000, paid within three months, towards various tax liability of the petitioners. Shri Rao could not controvert that the settlement officer has made it abundantly clear that any amount paid after 90 days cannot be accepted under the Scheme, hence the balance amount will have to be refunded back to the assessee - we direct the respondent to refund the said sum of Rs. 2,66,000 which was paid by the assessee to the respondent beyond the period of 90 days under the Scheme, subject to the petitioner producing necessary proof of such payments. The aforesaid amount shall be refunded within a period of 8 weeks from today and if the respondent fails to do so the respondent shall pay interest at the rate of 9 per cent, per annum after the period of 8 weeks.
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2005 (6) TMI 21 - KERALA HIGH COURT
TDS - discount given on sale of stamp by the Treasury to the stamp vendor is outside the scope of TDS provisions under section 194H of the Act. Wherever the Legislature wanted to levy tax on trade discount, they specifically provided for the same which is clear from the provisions of section 194H of the Act which provides for deduction of tax on discount paid to lottery dealers in the form of commission. In the circumstances, discount paid to the stamp vendors is not intended to be covered by section 194H of the Act. These writ petitions are therefore allowed vacating the impugned instructions issued by the Income-tax Department for deduction of tax at source on discounts paid to stamp vendors with direction to the Treasury Officers to refund the amounts withheld from the petitioners and other stamp vendors under interim orders of this court, within three weeks from the date of production of copy of this judgment.
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2005 (6) TMI 20 - BOMBAY HIGH COURT
Whether, Tribunal was right in law in holding that no valid partnership could have been formed between I.P. Barot, representing his Hindu undivided family as karta and Shri Rajnikant I. Barot, and his son who was a member of the said Hindu undivided family? Whether, assessee-firm was entitled to renewal of registration?" In the present case it is not disputed that Mahesh S/o Shri I.P. Barot was inducted as a working partner. He was contributing his skill and expertise in running the partnership business and therefore it cannot be said that he was not a genuine partner and/or was merely a name-lender. In view thereof the orders of the lower authorities need to be set aside. Accordingly, first question is answered in the negative and in favour of the assessee and second question has to be answered in the affirmative, in favour of the assessee
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2005 (6) TMI 19 - CALCUTTA HIGH COURT
"Whether Tribunal was justified in law in holding that the interest-free advances were given for the purpose of business ignoring the fact that the condition as laid down under the provision of section 36(1)(iii) of the Income-tax Act were not fulfilled?" - Commissioner (Appeals) and the learned Tribunal both were right in presuming that the advance was made out from the assessee's own fund eligible for the benefit of section 36(1)(iii). - appeal fails and is accordingly hereby dismissed
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