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Showing 501 to 520 of 535 Records
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2002 (4) TMI 36
Issues Involved:
The validity of notice issued u/s 148 of the IT Act, 1961 for reassessment of income for the asst. yr. 1967-68.
Communication by ITO regarding reasons for initiation of reassessment proceedings.
Validity of Notice u/s 148:
The petitioner challenged the notice issued u/s 148 proposing reassessment, citing that income chargeable to tax had escaped assessment. The ITO formed reasons to believe that Rs.1,200 chargeable to tax had escaped assessment due to the omission of disclosing material facts. The statement of Sh. Des Raj Sharma, denying receipt of interest, was considered fresh material for reopening the assessment. The court held that the reasons constituted valid material justifying the belief of escaped assessment, thus upholding the validity of the notice u/s 148.
Communication of Reasons by ITO:
The ITO, relying on a Supreme Court decision, initially conveyed that reasons for reassessment were not required to be communicated. However, upon show-cause notice, the reasons and Sh. Des Raj Sharma's statement were placed on record. The petitioner disputed Sharma's statement, claiming it as inadmissible evidence. The court noted that the statement provided relevant material for the belief of escaped assessment, rendering the communication issue moot. The challenge to the notice was assessed based on the available material, emphasizing the relevance of the information for forming the belief.
Precedents and Conclusion:
Citing legal precedents, the court highlighted the importance of relevant material for forming the belief of escaped assessment during reassessment proceedings. The Division Bench's decision emphasized the significance of material relevance over the absolute truth at the initial stage of reassessment notices. In this case, Sh. Des Raj Sharma's statement denying receipt of interest provided crucial material for the reassessment. The court dismissed the writ petition, allowing the enforcement of any demand as per law due to the cessation of the stay order.
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2002 (4) TMI 35
Issues Involved:
The judgment involves the challenge to the disallowance of deduction claimed by the assessee for its share of income from advertisements, specifically related to the new industrial unit at Trivandrum under section 80-I(1) of the Income-tax Act for the assessment years 1990-91 and 1991-92.
Details of the Judgment:
The appellant, a publishing company, claimed deduction under section 80-I(1) for its new unit at Trivandrum based on the income from advertisements and sale of newspapers. The assessing authority disallowed a portion of the claimed deduction for both years, citing that the benefit of advertisements is derived solely by the advertisers. The Commissioner of Income-tax (Appeals) allowed the appeals, stating that the newspaper itself benefits from advertisements. However, the Income-tax Appellate Tribunal ruled in favor of the Department, disagreeing with the Commissioner's decision.
Legal Analysis:
The High Court analyzed the provisions of section 80-I of the Income-tax Act and the nature of the benefit derived from advertisements. It concluded that the benefit of advertisements is mutual, as the newspaper's circulation and readership directly impact the revenue generated from advertisements. The Court emphasized that the newspaper's efforts to increase circulation and coverage, especially through new units like the one at Trivandrum, contribute to attracting advertisers and increasing revenue. Therefore, the Court set aside the Tribunal's decision and reinstated the Commissioner's order in favor of the assessee.
This judgment clarifies the interpretation of section 80-I in the context of claiming deductions for income from advertisements, highlighting the mutual benefit between newspapers and advertisers based on circulation and readership.
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2002 (4) TMI 34
Refund, Interest On Refund - "Whether, on the facts and in the circumstances of the case, the Income tax Appellate Tribunal had erred in not allowing interest under section 244 on the entire amount of refund irrespective of the fact that the information required by the Income-tax Officer for giving effect to the order of the Appellate Assistant Commissioner was furnished after the expiry of the period mentioned in the said section?" - we are of the opinion that the assessee has rightly been held to be not entitled to (interest on) the refund by the Income-tax Appellate Tribunal. - The answer to the question must be rendered in the negative, i.e., in favour of the Revenue and against the assessee.
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2002 (4) TMI 33
Appeal To Appellate Tribunal - Has the Tribunal committed an error in exercise of its jurisdiction in setting aside the appellate order of the Commissioner of Income-tax (Appeals) without taking into consideration the reasons for which that order was made? - Since the Tribunal has not appropriately considered the reasoning given by the Commissioner of Income-tax (Appeals) and has given its finding without dealing with the reasoning of the Commissioner of Income-tax (Appeals) reproduced hereinabove, we are of the view that the impugned order of the Tribunal cannot be sustained and the Tribunal should consider the matter on the merits in accordance with law. This appeal is accordingly allowed and the impugned order of the Tribunal is set aside
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2002 (4) TMI 32
Charitable Purpose, Charitable Trust, Wealth Tax, Exemption - This trust is registered under se ction 12A(a) of the Income-tax Act, 1961. Its objects are charitable in nature within the meaning of section 2(15) thereof. The donations accepted by it are also entitled to exemption from income-tax in terms of section 80G of the Income-tax Act. In its wealth-tax return, the petitioner claimed exemption under section 5(1)(i) of the Wealth-tax Act, 1957, for the year 1976-77. However, the said claim was not entertained. An appeal preferred thereagainst was dismissed. - there is no manner of doubt that the petitioner would be entitled to exemption as prayed for by him.
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2002 (4) TMI 31
Unexplained Investment - "Whether, the Tribunal has erred in law in not following settled legal position and established law on the said subject of rules, practice and procedure of evidence, natural justice and fair play while confirming the addition of Rs.1,40,000 relying upon 'inadmissible evidence' and ignoring 'undisputed evidence' adduced by the assessee - we hold that the Tribunal had not committed any error while confirming the addition of Rs.1,40,000 as the income of the assessee as was ordered by the Income-tax Officer and the question referred to us is answered against the assessee and in favour of the Revenue.
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2002 (4) TMI 30
Issues:
1. Jurisdiction of the High Court to deal with the order rejecting a claim for tax refund.
2. Characterization of the order as an order of refund and its appealability under section 246(1)(k) of the Income-tax Act, 1961.
Analysis:
Issue 1: The High Court examined the jurisdiction to deal with the order rejecting a claim for tax refund. The petitioner had moved a writ petition seeking a refund of excess tax paid, which was disposed of by directing the assessing authority to decide the refund application. The subsequent order rejecting the refund claim was challenged in a writ petition. The petitioner argued that the High Court had jurisdiction as the earlier order directed the authority to act according to law. However, the respondents contended that the court did not deal with the merits and the matter was appealable under the Income-tax Act. The court held that it could not assume jurisdiction over matters specifically provided for in the Act, emphasizing that the court's role was limited to certain grounds and not the merits of the claim for refund.
Issue 2: The court analyzed the characterization of the order as an order of refund under section 237 of the Income-tax Act, 1961, and its appealability under section 246(1)(k). The court clarified that an order of refund, even if including interest, falls under section 237. The substance of the order, focusing on the principal object of refund, determines its character. The court highlighted that the Act provides for specific remedies, including appeal before the Deputy Commissioner of Income-tax (Appeals), for orders under section 237. The court emphasized that the petitioner could seek redress through the appeal process rather than through the writ jurisdiction. It concluded that the writ petition could not be maintained and dismissed it, allowing the petitioners to file an appeal before the appropriate forum.
In summary, the judgment addressed the jurisdiction of the High Court in dealing with a tax refund claim rejection and clarified the characterization of the order as a refund order under the Income-tax Act, emphasizing the availability of appeal remedies provided by the Act.
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2002 (4) TMI 29
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the sum of Rs. 5,30,503 incurred on old wing of the hotel building owned by the assessee was not a capital expenditure?" The law which the apex court laid down in Assam Bengal Cement Co. Ltd. v. CIT still holds good, which is extracted as follows: "The aim and object of the expenditure would determine its character, namely, whether it was capital expenditure or revenue expenditure. If the expenditure was made for acquiring or bringing into existence all asset or advantage for the enduring benefit of the business, it was properly attributable to capital and was of the nature of capital expenditure. If, on the other hand, it was made for running the business or working it with a view to produce profits, it was revenue expenditure." - In our view no referable question of law has arisen from the order of the Tribunal. The finding of the Income-tax Appellate Tribunal is purely a finding of fact
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2002 (4) TMI 28
The respondent-assessee is a society registered under the Rajasthan Societies Registration Act, 1958, in the name of "Jodhpur Chartered Accountants Society, Jodhpur". - "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that on the proper construction of aims and objects of the assessee-association as disclosed in its constitution fall within the purview of section 2(15) of the Income-tax Act so as to entitle the assessee-society to registration under section 12A of the Income-tax Act?" - Tribunal has rightly directed the Commissioner of Income-tax to grant registration to the applicant-society under section 12A of the Income-tax Act, 1961. - We find no merit in this appeal and the same is dismissed.
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2002 (4) TMI 27
"1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law allowing interest paid to third parties placing reliance on the judgment of CIT v. Jain Construction Co. whereas in the said judgment, the High Court has not held that interest to third parties are allowable out of income arrived by applying net profit rate? - 2. Whether, on the facts and in the circumstances of the case and position of law, the Income-tax Appellate Tribunal was justified in giving the relief on account of the sales tax refund which was credited by the assessee-firm itself in his profit and loss account and declared it as the part of its income under section 41(1) of the Act?" - we are of the opinion that the basic condition for invoking section 41(1)(a) of the Act has not been satisfied in the case. The amount of sales tax refund in the hands of the assessee during the previous year relating to the assessment year in question, cannot be deemed to be income of that year, merely on the basis of drawing inferences that it might have been allowed as deducted in the earlier assessment years. - The appeal therefore fails and is hereby dismissed
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2002 (4) TMI 26
Accounting - Rejection Of Accounts - Estimation Of Profits - The core question raised before us, as is apparent from the question framed at the time of admission, whether the Income-tax Appellate Tribunal was justified in law allowing interest paid to third parties. - There is no doubt about the fact that both expenses, on account of depreciation and interest on borrowings are allowable expenses and without taking into account such expenses net taxable income cannot be determined. In fact there is no dispute about the appropriation towards depreciation, notwithstanding the assessing authority has applied the net profit rate excluding appropriation towards any allowable expenditure. - We are in agreement with the Tribunal for modifying the order passed by the assessing authority by making the net profit rate subject to adjustment towards depreciation and interest on borrowings. - This conclusion, in our opinion, was a pure finding of fact and would not give rise to a question of law much less a substantial question of law unless the finding is shown to be perverse or without any rationale
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2002 (4) TMI 25
"(i) Whether, the cost of plant and machinery under erection as also the cost of building under construction was to be included in the capital base for purposes of deduction under section 80J of the Income-tax Act, 1961?" - "(ii) Whether the assessee is entitled to investment allowance in respect of the amount paid as a result of the fluctuation in exchange rate?" - "(iii) Whether the amount of Rs. 28,79,813 claimed by way of exchange loss consequent to the fluctuation in exchange rate was allowable as a deduction?" - The said question (i) is, therefore, answered in the affirmative against the Revenue and in favour of the assessee. - Question No. (ii) is, therefore, answered in the negative, in favour of the Revenue and against the assessee. Question No. (iii) is accordingly answered against the assessee and in favour of the Revenue.
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2002 (4) TMI 24
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the house property was used for residential purpose and, therefore, the assessee was entitled to the benefit of section 7(4) of the Wealth-tax Act, 1957, so as to have the property valued as of April 1, 1971?" - we are of the opinion that the Tribunal was right in holding that the house property in question was used for residential purpose and, therefore, the assessee was entitled to the benefit of section 7(4) of the Wealth-tax Act, 1957, so as to have the property valued as on the valuation date relevant to the assessment year commencing on the 1st day of April, 1971. The question referred to us is, therefore, answered in the affirmative, against the Revenue and in favour of the assessee.
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2002 (4) TMI 23
Net Wealth - Wealth Tax, Exemption - "1. Whether, Tribunal was right in law in coming to the conclusion that the assessee was entitled to exemption under section 5(1)(iii) of the Wealth-tax Act, 1957, in respect of new building constructed by him in place of the old recognised palace? - 2. Whether, Tribunal was right in law in coming to the conclusion that the exemption was available to a building used as an official residence irrespective of the fact whether it was old or newly constructed?" - "Whether, assessee is entitled to exemption under section 5(1)(iii) of the Wealth-tax Act, 1957, in respect of the palace which was demolished and a new building has been constructed?" - Since the question as to whether the exemption claimed under section 5(1)(iii) of the Act could have been made by the assessee in the return filed by him in the status of a Hindu undivided family has not been referred and does not arise from the order of the Tribunal, we refrain from giving any opinion on that aspect of the matter. - In view of the above discussion, we hold that the Tribunal was right in coming to the conclusion that the exemption under section 5(1)(iii) of the Wealth-tax Act, 1957, was admissible even in respect of the new building constructed by the assessee in the place of the old recognised palace which was used as his official residence.
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2002 (4) TMI 22
By way of this petition, the petitioner has challenged the reassessment under section 147(a) of the Income-tax Act, 1961, and the issuance of notice under section 148 of the Act on the ground that there was no material before the Department for coming to the conclusion that the matter required reassessment. It is submitted by counsel for the petitioner that because of this writ petition, the proceedings in appeal were stayed by the Commissioner of Income-tax (Appeals) and he will be satisfied in case a direction is given to the Commissioner of Income-tax (Appeals) to decide this appeal within the time fixed by this court. - since the appeal is pending for quite some time, I deem it appropriate to issue directions to the Commissioner of Income-tax (Appeals) to decide the same within the time given by this court - I dispose of this petition with a direction to the Commissioner of Income-tax (Appeals) to decide the appeal filed by the petitioner within four months from today.
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2002 (4) TMI 21
Duty of tribunal - "1. Whether, the Tribunal was justified in ignoring the material collected by the Commissioner of Income-tax (Appeals) under section 250(4) of the Act and reversing the finding of the Commissioner of Income-tax (Appeals) based on such material solely on the ground that material so collected by the Commissioner of Income-tax (Appeals) was inadmissible? - 2. Whether there is any material to hold that higher commission paid on bulk sales amounts to diversion of profit?" - Commissioner of Income-tax (Appeals) without confronting the documents to the Income-tax Officer read those documents for the benefit of the assessee. The Income-tax Appellate Tribunal excluded those documents from consideration and held that the assessee had paid a discount at the rate of eight per cent. to its sister concerns while it had paid commission at the rate of three per cent. only to the other sister concerns which rendered the same services to the assessee. The Tribunal, therefore, held that there was no justification for paying discount to the two sister concerns by the assessee at the rate of exceeding three per cent. In view of the finding, the Tribunal set aside the order of the Commissioner of Income-tax (Appeals) and restored the order of the Income-tax Officer. - in our opinion, the Tribunal was not justified in ignoring the matter placed before the Commissioner of Income-tax (Appeals) without giving an opportunity of hearing to the assessee.
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2002 (4) TMI 20
The question sought to be raised in this petition is as to whether such a modification in the draft statement amounts to a review and whether the same is permissible in law. - Tribunal can certainly alter the questions raised earlier in the draft statement and in fact that is the purpose of preparing a draft statement. The draft statement prepared at the intermediate stage is not the final statement of the case and the final statement modifying the draft statement cannot be construed as a review of the order preparing the draft statement. This is because the statement prepared at the intermediate stage has no finality, it is only a stage in the process of preparing the final statement of case. - we do not find any infirmity in the addition of questions by the Tribunal when the final statement was drawn.
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2002 (4) TMI 19
Export – special deduction - partial disallowance of exemption - Assessing Officer while computing export profit for granting deduction under section 80HHC excluded 90 per cent. of the premium received from export houses by applying Explanation (baa) to sub-section (4A) of section 80HHC of the Income-tax Act. – "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that 90 per cent. of the export house premium cannot be deducted while computing the deduction under section 80HHC in accordance with the Explanation (baa) to section 80HHC as they are directly related to exports though a local receipt?- Held that what is sold by the seller in this case is not merely the marine products. In addition, the import permit earned by him as well is also sold. And that is why a higher price is fixed for his wares. Hence, the amount described as a premium is in fact part of the price settled by him for sale of his merchandise and it is neither a brokerage, commission, interest, charges or collection of any amount of similar nature. – question answered against the Revenue and in favour of the assessee.
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2002 (4) TMI 18
KVSS - This is a petition for quashing order passed by the Commissioner of Income-tax treating the declaration filed by the petitioner under section 89 of the Finance (No. 2) Act, 1998, as non est. The other prayer made in the partition is for issuance of a direction to allow the petitioner benefit under the Kar Vivad Samadhan Scheme - petitioner's plea was rejected on the ground that there were no determined and payable tax arrears on the date of declaration. In our opinion, the impugned order does not suffer from any legal infirmity which may justify interference by this court because the petitioner has failed to produce any material before the court to show that the amount of interest which was deter mined by the competent authority vide order dated January 29, 1990, had remained unpaid on the date of declaration. During the course of hearing, Shri R. P. Sawhney produced the record of the Department to show that the amount of tax and interest had been paid by the petitioner on December 29, 1990. Therefore, it cannot be said that the petitioner was in arrears of tax as on the date of declaration. Thus, we do not find any merit in the argument that respondent No. 1 had erred in refusing to accept the declaration filed by the petitioner.
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2002 (4) TMI 17
KVSS - The petitioner-assessee has approached this court invoking its extraordinary jurisdiction to quash and set aside the communications and for seeking declaration that the petitioner has made payment in time and is entitled to the benefit of the "Kar Vivad Samadhan Scheme, 1998", and for directions to the respondents to issue necessary certificate in that behalf. - We having come to the conclusion that the petitioner discharged their liability by making the payment of the sum of Rs. 2,11,021 in terms of the certificate of intimation under section 90(1) of the Finance (No.2) Act, 1998, is entitled to the benefit of the "Kar Vivad Samadhan Scheme, 1998" and, therefore, the impugned communications issued by the respondents, are quashed and set aside.
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