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Case Laws
Showing 61 to 80 of 81 Records
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1964 (4) TMI 23
Whether effect of the provision contained in article 295(1)(b) of the Constitution and have held that in view of the position emerging on April 1, 1950, by the extension of the Income-tax Act to the territory of the Part B State of Madhya Bharat by the Finance Act of 1950 and in view of the Concessions Order, the concessions granted by the Government of the former State of Madhya Bharat, which became the obligation of the Government of India under article 295(1)(b), must be held to have been superseded by the legislative provisions made as from April 1, 1950, and that corporations or individuals who had any concessions before April 1, 1950, would thereafter, be entitled only to such concessions as would be permissible under the Concessions Order?
Held that:- In the circumstances the respondents cannot rely on the agreement with the former State of Madhya Bharat, which must be deemed to have been superseded by the legislative provisions which came into force from April 1, 950, and can only get such concessions as may be allowed to them under the Income-tax Act read with the Concessions Order. We have already pointed out that the Government of India allowed concessions for five years, which the respondents have already availed of. They are not entitled to any further concession by virtue of the agreement with the Government of Madhya Bharat. We, therefore, allow the appeal and set aside the order of the High Court and dismiss the writ petition.
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1964 (4) TMI 22
Whether there was evidence to come to the conclusion that the computation of the income of the assessee at ₹ 1,80,000 and remittance at ₹ 30,000 in the assessment for the year 1947-48 was right?
Whether there was evidence for the conclusion that the sum of ₹ 1,07,461 was remitted into India and was assessable to tax in the assessment for the year 1948-49 ?
Held that:- With great repect, the High Court did not appreciate the findings of the Tribunal, recorded in the supplementary statement. The Tribunal had accepted the earlier findings of the court, recorded in the order dated July 31, 1958, but in spite of discarding the theory of benami on the material before it, it came to the conclusion that no other conclusion except that 87,500 dollars was the income of the assessee was possible.
Once it is held, as we do hold, that there was material for the finding of the Tribunal that 87,500 dollars represented the income of the assessee, no other issue survives.
In the result, the appeals are allowed and the question referred to the High Court answered in the affirmative. Appeal allowed.
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1964 (4) TMI 21
The Supreme Court dismissed an appeal regarding the allowability of bonus payment made in 1947 against profits of 1949 for assessment year 1950-51. The High Court decision was upheld based on a previous judgment. The appeal was filed under section 66A(2) of the Income-tax Act, 1922.
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1964 (4) TMI 20
Whether the order of January 18, 1947, is a law?
Held that:- As we have come to the conclusion that the order of January 18, 1947, is not a law, we think it unnecessary to consider whether if it was a law it could be said to have been repealed by the extension of the Income-tax Act read with section 13 of the Finance Act, 1950, to the State of Madhya Bharat.
We are, therefore, of opinion that in the first place the agreement of February 25, 1950, on which the company relies with respect to concessions to corporations must be deemed to have been entered under article 295(1)(b), and not under article 278(1)(a). In the second place, article 278(1)(a) merely contemplates an agreement between the Centre and Part B States with respect to levy, collection and distribution of public revenues which are leviable by the Government of India and has nothing to do with any contract between a former Indian State and another person with respect to such revenues which may have become the obligation of the Government of India under article 295(1)(b). The company, therefore, cannot rely on the agreement of February 25, 1950, in this connection and contend that the agreement of April 7, 1947, was binding for at least ten years thereunder. We are, therefore, of opinion that the view taken by the High Court is incorrect. Appeal allowed.
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1964 (4) TMI 19
Whether it was the intention of the legislature to deprive a taxpayer of the plea that action for assessment or reassessment could not be commenced, on the ground that before the amending Act became effective, it was barred?
Held that:- The legislature has given to section 18 of the Finance Act, 1956, only a limited retrospective operation, i.e., up to April 1 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income-tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred. Appeal dismissed.
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1964 (4) TMI 18
Whether when the Income-tax Officer in his discretion assessed an association of persons to income-tax, the Appellate Assistant Commissioner in appeal or Appellate Tribunal in further appeal can set aside the Income-tax that order and direct him to assess the members of that association individually?
Held that:- Section 3 impliedly gives an option to an appropriate authority to assess the total income of either the association of persons or the members of such association individually.
We, therefore, hold, agreeing with the High Court, that the Appellate Tribunal has jurisdiction to give directions to the appropriate authority to cancel the assessment made on the association of persons and to give appropriate directions to the authority concerned to make a fresh assessment on the members of that association individually. The answer given by the High Court to the question propounded is correct. Appeal dismissed.
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1964 (4) TMI 17
Whether the provisions of section 23A were correctly applied for the three relevant years ?
Held that:- Whether in view of the third proviso the company may be regarded as one in which the public are substantially interested, is a question to which no attention was paid by the Tribunal. Whether in fact there exists such a controlling interest in the hands of one shareholder or a group of shareholders as would render the company one in which the public are not substantially interested is a question which therefore cannot be decided by this court.
The order of the High Court must therefore be confirmed, but on different grounds. The interpretation of the Explanation by the High Court, for reasons already set out, was incorrect ; the Explanation had no application, because no presumption on the facts found could arise thereunder. The revenue authorities have not made any investigation on the question whether there existed any controlling interest in a group of persons, so as to bring the case within the third proviso. Appeal dismissed.
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1964 (4) TMI 16
Whether the finding of the Appellate Tribunal was one of fact and that the High Court had no jurisdiction to canvass the correctness of its finding on a reference made under section 66(2) of the Act?
Whether the conclusion arrived at by the Tribunal was the correct one and the High Court erroneously interfered with it?
Held that:- The Tribunal mixed up the two concepts, viz., the legality of the partnership and the ultimate destination of the partners' profits. It also mixed up the question of the validity of the partnership and the object of the individual partners in entering into the partnership. If to avoid a legal difficulty 5 individuals, though four of them are members of different firms, enter into a partnership expressly to comply with a provision of law, we do not see any question of fraud or genuineness involved. It is a genuine document and it complies with the requirements of law. It is not an attempt to evade tax, but a legal device to reduce its tax liability. The fact that all the partners of all the firms did not exceed 12 in number and if they chose all of them could have entered into the partnership indicates that there was no sinister motive behind the partnership. As the Tribunal misconstrued the provisions of the partnership deed and relied upon irrelevant considerations in coming to the conclusion it did, the High Court rightly differed from the view of the Tribunal. In the circumstances, in view of the decision of this court in Sree Meenakshi Mills' case [1956 (9) TMI 1 - SUPREME Court] a question of law within the meaning of section 66(2) of the Act arose for decision. The High Court rightly answered the question in the negative. Appeal dismissed.
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1964 (4) TMI 15
Whether by the third proviso to clause (c) of section 16(1), income received by the beneficiaries other than the assessee is income arising to them by virtue of a settlement which is not revocable for a period exceeding six years, and from which income the assessee derives no benefit direct or indirect?
Held that:- The High Court was, therefore, right In holding that by virtue of the third proviso to section 16(1)(c) of the Indian Income-tax Act, 1922, the income received by the beneficiaries under the deed of trust other than the assessee could not, until the power of revocation arose to the assessee, be deemed to be the income of the assessee for the purpose of assessment to income-tax. Appeal dismissed.
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1964 (4) TMI 14
Whether interest paid on monies borrowed for the purchase of the plantation is expenditure of the nature referred to in section 5(e) of the Act and should therefore be deducted in assessing the income of the plantation during the year ?
Held that:- it is impossible to dissociate the character of the assessee as the owner of the plantation and as a person working the plantation. The assessee had bought the plantation for working it as a plantation, i.e., for growing tea, coffee and rubber. In principle, no distinction between interest paid on capital borrowed for the acquisition of a plantation and interest paid on capital borrowed for the purpose of existing plantations : both are for the purposes of the plantation.
In the result, we agree with the High Court that the deduction claimed by the assessee fell within the scope of section 5(e) of the Act, and that the whole of ₹ 22,628-9-8 and not merely ₹ 1,570-10-7 should have been deducted from his assessable income. Appeal dismissed.
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1964 (4) TMI 13
Whether the 60% of the income from the trust properties is exempt from assessment to income-tax under section 4(3)(i) of the Act?
Held that:- The said sub-section says that the incomes mentioned thereunder shall not be included in the total income, but the proviso lifts the ban and says that such incomes shall be included in the total income if the conditions laid down are satisfied. We think that the expression " such income " only means the income accruing or arising in favour of the trust.
The legal position may briefly be stated thus. Clause (i) of section 4(3) of the Act takes in every property or a fractional part of it held in trust wholly for religious or charitable purposes. It also takes in such property held only in part for such purposes. Business is also property within the meaning of the said clause. Clause (b) of the proviso to section 4(3)(i) applies only to a business not held in trust but carried on on behalf of religious or charitable institutions. Appeal dismissed.
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1964 (4) TMI 12
Whether extra depreciation is admissible under the provisions of section 10(2)(vi) and section 10(2)(via) of the Income-tax Act in respect of the diesel oil engines fitted to the motor vehicles in replacement of the existing engines ?
Held that:- The High Court was correct in answering the question referred to it in the affirmative. The appeal, therefore, fails and is dismissed with costs.
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1964 (4) TMI 11
Whether the expression " income-tax " in clause (c) of sub-rule (2) of rule 2 of Schedule I to the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (M. P. Act No. 1 of 1951) includes super-tax?
Held that:- The English decisions on the construction of wills are not of much help in construing the express provisions of rule 2(2)(c) of Schedule I to the Act, they shall be construed on their own terms. Having regard to the terms of the rule, we have come to the conclusion that income-tax does not take in super-tax. Appeal dismissed.
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1964 (4) TMI 10
Whether interest paid under section 34 of the Land Acquisition Act, 1894, hereinafter called the Act, is of the nature of a capital receipt or of a revenue receipt?
Held that:- In a case where title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which the owner of the land might have made if he had the use of the money or the loss he suffered because he had not that use. In no sense of the term can it be described as damages or compensation for the owner's right to retain possession, for he has no right to retain possession after possession was taken under section 16 or section 17 of the Act. We, therefore, hold that the statutory interest paid under section 34 of the Act is interest paid for the delayed payment of the compensation amount and, therefore, is a revenue receipt liable to tax under the Income-tax Act. The order of the High Court is therefore, correct. Appeal dismissed.
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1964 (4) TMI 9
Whether the estate duty paid by the resident company, hereinafter called the assessee, incorporated outside India, on behalf of members not domiciled in India is deductible from its profits in computing its assessable income under section 10(2)(xv) of the Indian Income-tax Act, 1922, hereinafter called the Act?
Held that:- In the present case, the company, as a statutory agent of the deceased owners of the shares, paid the sums payable by the legal representatives of the deceased shareholders. The payments have nothing to do with the conduct of the business. The fact that on his default, if any, in the payment of the dues the revenue may realise the amounts from the business assets is a consequence of the default of the assessee in not discharging his statutory obligation, but it does not make the expenditure any the more expenditure incurred in the conduct of the business. It is manifest that the amounts in question were paid by the assessee as a statutory agent to discharge a statutory duty unconnected with the business, though the occasion for the imposition arose because of the territorial nexus afforded by the accident of its doing business in India. We, therefore, hold that the estate duty paid by the respondent was not an allowable deduction under section 10(2)(xv) of the Act. We answer the question in the negative. The order of the High Court is wrong and is set aside. Appeal allowed.
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1964 (4) TMI 8
Whether on the facts and in the circumstances of the case the assessee is entitled to claim a deduction of bonus of ₹ 1,08,325 relating to the calendar year 1947 in the assessment year 1950-51 ?
Held that:- The words " for the year in question " mean the year in respect of which bonus is paid. Appeal dismissed.
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1964 (4) TMI 7
Whether in the computation of the income of the firm under the head " Profits and gains of business " the Income-tax Officer was bound by the method of accounting in which the cost of acquisition of the film of which the exploitation rights were held was debited at the commencement of the year, but the value of the film at the end of the year was ignored?
Held that:- There is no warrant in this case for assuming that the revenue authorities and the Tribunal had sought to displace the method of accountancy adopted by the assessee. By applying the proviso to section 13, they made the computation upon the basis and in the manner in which in their opinion profits would be properly deduced. That they were entitled to do. We are, therefore, of the view that the High Court was in error in holding that because the assessee had maintained his accounts in the cash system it was not open to the Income-tax Officer to add to the receipts from the business the value of the stock-in-trade at the end of the year for the purpose of properly deducing the profits of the business for the year in question.
The appeal, therefore, must be allowed and the answer to the question referred to the High Court will be in the affirmative
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1964 (4) TMI 6
Whether the sum of ₹ 12,447 is assessable to income-tax ?
Whether it has been rightly assessed in the assessment year 1951-52 ?
Held that:- The High Court in the present case should have answered the second question referred to it in the affirmative. The order of the High Court is set aside and the appeal is allowed
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1964 (4) TMI 4
Interpretation of section 7(1) of the Indian Income-tax Act, 1922 questioned
Held that:- As no interest in the sum contributed by the employer under the scheme vested in the employee, as it was only a contingent interest depending upon his reaching the age of super-annuation. It is not a perquisite allowed to him by the employer or an amount due to him from the employer within the meaning of section 7(1) of the Act.
We, therefore, hold that the High Court has given correct answers to the questions of law submitted to it by the Income-tax Appellate Tribunal that the employer's contribution under the terms of the trust deed was not a perquisite as contemplated by section 7(1) of the Act. The employer's contributions were not allowed to or due to the employee in the accounting year. And the Legislature not having used the word " deferred " with annuity in section 7(1) and the statute being a taxing one, the deferred annuity would not be hit by paragraph (v) of Explanation 1 to section 7(1) of the Act. Appeal dismissed
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1964 (4) TMI 2
Issues Involved:
1. Legality of the search conducted by the excise party.
2. Justification of the accused persons' resistance to the search.
3. Validity of the charges under sections 147 and 353 of the Indian Penal Code.
4. Appropriateness of the trial court's conviction and sentencing.
Issue-wise Detailed Analysis:
1. Legality of the Search Conducted by the Excise Party:
The excise party's actions were scrutinized to determine whether they were lawful under Rule 197 or Rule 201 of the Central Excise Rules. The court noted that Rule 197 allows authorized officers to inspect premises without a search warrant, but only for verifying returns or collecting information required under the Act or Rules. Rule 201, however, requires a search warrant for entering and searching premises suspected of storing contraband. The court found that the excise party's actions were not covered under Rule 197 as their intent was to detect contraband tobacco, necessitating compliance with Rule 201 and Section 165 of the Code of Criminal Procedure, which they failed to observe. Thus, the search was deemed illegal.
2. Justification of the Accused Persons' Resistance to the Search:
Given the illegality of the search, the court held that the accused persons were justified in resisting the excise party. The excise officers were not discharging their official duties according to law, and any obstruction by the accused did not amount to obstructing public servants in the lawful discharge of their duties. Therefore, the charge under section 353 of the Indian Penal Code could not be sustained.
3. Validity of the Charges under Sections 147 and 353 of the Indian Penal Code:
The charge under section 353 was dismissed due to the illegal nature of the search. However, the charge under section 147, which pertains to rioting, was upheld. The court found that the respondents formed an unlawful assembly with the common object of assaulting the excise officers. Despite the failure to prove the obstruction of public servants in lawful discharge of their duties, the evidence showed that the respondents assaulted the officers, thus justifying the charge under section 147.
4. Appropriateness of the Trial Court's Conviction and Sentencing:
The trial court had convicted the respondents under sections 147 and 353 of the Indian Penal Code and sentenced them to one year's rigorous imprisonment on each count, to run concurrently. The Additional Sessions Judge had set aside this conviction. The High Court, however, restored the conviction under section 147 but reduced the sentence to six months' rigorous imprisonment for each respondent, considering the circumstances of the case. The acquittal under section 353 was confirmed.
Conclusion:
The High Court upheld the conviction of the respondents under section 147 of the Indian Penal Code, sentencing them to six months' rigorous imprisonment. The acquittal of the respondents under section 353 was confirmed, and the respondents were directed to surrender to serve out the remaining period of their sentences.
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