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Showing 61 to 80 of 114 Records
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1972 (9) TMI 54
Issues:
1. Interpretation of entry 18-A of the Central Excise and Salt Act, 1944 regarding excise duty on yarn on hanks.
2. Validity of demand notice issued for recovery of excise duty.
3. Jurisdiction of the authority to pass the order under Rule 9(2) or Rule 10 of the Central Excise and Salt Rules.
Detailed Analysis:
1. The case involved a dispute over the interpretation of entry 18-A of the Central Excise and Salt Act, 1944, concerning the levy of excise duty on folded yarn on hanks. The plaintiff, a company, filed a suit against the Union of India and the Collector of Central Excise seeking recovery of excise duty paid under protest. The trial court decreed the suit, but the lower Appellate Court dismissed it, citing that the demand notice was issued under Rule 9(2) instead of Rule 10. The judgment highlighted that the substance of the matter should be considered over mere technicalities, following a precedent set by the High Court in a previous case.
2. The main contention before the District Judge was the validity of the demand notice issued under Rule 9(2) of the Central Excise and Salt Rules. The District Judge held that the authority had the jurisdiction to pass the order, and any error in citing the specific rule did not invalidate the notice. It was emphasized that the notice was not attacked on any other grounds during the trial. The judgment concluded that the demand notice was deemed legal and valid, dismissing the appeal on this issue.
3. The jurisdiction of the authority to pass the order under Rule 9(2) or Rule 10 of the Central Excise and Salt Rules was a crucial aspect of the case. The District Judge ruled that even if the demand notice was mistakenly issued under Rule 9(2), it could be justified under Rule 10, which authorized the demand for excise duty. The non-examination of the Inspector was deemed immaterial, as the key factor was the legality of the demand itself. The judgment upheld the authority's jurisdiction to issue the notice and collect the excise duty, ultimately leading to the dismissal of the appeal on this ground.
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1972 (9) TMI 53
Issues:
1. Challenge to excise duty demand for varnishes and paints
2. Validity of subsequent demands for excise duty
3. Interpretation of Rule 9(2) and Rule 10-A in relation to excise duty demands
Analysis:
Issue 1: Challenge to excise duty demand for varnishes and paints
The petitioner, engaged in manufacturing varnishes and paints, contested a demand for excise duty amounting to Rs. 49,249.20 for the period 1-1-1963 to 15-7-1964. The Assistant Collector of Central Excise, Madras, directed the withdrawal of the demand, citing the petitioner's eligibility for concessional rates under Notification No. 137 of 1960. However, subsequent demands were issued for different periods, leading to the petitioner filing a Writ Petition to challenge the demands.
Issue 2: Validity of subsequent demands for excise duty
The petitioner argued that the subsequent demands contradicted the earlier decision of the Assistant Collector of Customs directing the withdrawal of the initial demand. The High Court, however, held that the withdrawal was based on procedural grounds and did not absolve the petitioner from excise duty liability. The Court emphasized that fresh demands could be issued in accordance with statutory provisions and notifications, despite the prior withdrawal.
Issue 3: Interpretation of Rule 9(2) and Rule 10-A
The Court analyzed the applicability of Rule 9(2) and Rule 10-A to the demands. It determined that Rule 9(2) is a penal provision that requires goods to be removed in contravention of specific rules, which was not the case here. The demand under Rule 9(2) for the period 1-4-1959 to 15-7-1964 was deemed unsustainable. Regarding the demand for the latter period under Rule 10-A, the Court referred to previous judgments invalidating Rule 10-A. Consequently, both demands were set aside, and the Writ Petition was allowed with no order as to costs.
This comprehensive analysis of the judgment highlights the legal intricacies involved in challenging excise duty demands and interpreting relevant rules governing such matters.
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1972 (9) TMI 52
Whether the goods correctly answered the description of goods for which the appellant had been given an import licence?
Held that:- No manner of doubt that the High Court of Bombay was quite right in accepting the conclusions and findings of the Customs authorities about the proper scope of Item 74(vi) of the I.T.C. Schedule. In our opinion, there is nothing in the decision of the Collector which can warrant its condemnation as perverse or unreasonable. Even if it be assumed that because of the language used in the two items viz. Items 74(vi) and 74(x) of the I.T.C. Schedule, there is some room for confusion, it would not be competent for the High Court to interfere in a writ petition with the conclusion or finding of the Collector of Customs regarding the scope and ambit of those items and the appellant guilty under Section 167(8) of the Sea Customs Act and imposed a personal penalty of ₹ 80,000. Appeal dismissed.
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1972 (9) TMI 51
Whether there was absolutely no admissible evidence to convict the appellant of the offences with which he was charged or to confiscate the currency notes because the statement alleged to have been made by him to the Customs Officer in fact was made to the police officer or if it is held to be made to the Customs Officer it was made in the presence of the police, as such was inadmissible in evidence?
Held that:- The order of the Collector confiscating the currency notes and awarding the punishment does not suffer from any infirmity and the appeal is accordingly dismissed
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1972 (9) TMI 50
Issues:
Assessment under the Madras Agricultural Income-tax Act, 1955 - Method of computation of agricultural income - Consideration of stocks of coffee for assessment - Contention regarding when the crop was gathered - Applicability of two previous court decisions - Consideration of opening and closing stocks for assessment - Maintaining accounts on mercantile system - Correct principles for assessment.
Analysis:
The Supreme Court addressed the issue of assessment under the Madras Agricultural Income-tax Act, 1955, specifically focusing on the method of computation of agricultural income for the assessment years 1955-56 and 1956-57. The court highlighted that the primary dispute was regarding the consideration of stocks of coffee for assessment, particularly whether the department was entitled to include stocks gathered earlier but sold during the financial year. The assessee contended that only crops gathered and sold during the financial year should be considered. However, the court referred to previous decisions emphasizing that the agricultural income realized during the relevant previous year is crucial, regardless of when the crop was gathered. The court held that the price realized by the sale, under either the mercantile or cash system, should be assessed based on the accounting method maintained by the assessee.
In a subsequent argument raised by the assessee's counsel, it was contended that the authorities had impermissibly considered both opening and closing stocks for assessment, which was deemed correct by the court. The court observed that while the authorities had indeed considered both stocks, it did not significantly impact the assessment when considering both assessment years. The court refrained from making a definitive decision on this matter but directed the Tribunal to reassess the assessee based on the correct principles of law, emphasizing that for an assessee maintaining accounts on the mercantile system, only the sales made during the relevant previous years are relevant for computation, rendering the consideration of opening and closing stocks irrelevant.
Consequently, the Supreme Court allowed the appeals, remanding the cases to the Tribunal for reassessment of the assessee for the relevant assessment years based on the established principles. The court instructed the parties to bear their own costs in this matter, ultimately concluding that the appeals were allowed and the cases were remanded for further proceedings.
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1972 (9) TMI 49
Issues:
1. Claim for rebate under section 84 of the Income-tax Act for the assessment year 1963-64.
2. Application under section 154 of the Act for relief under section 84.
3. Interpretation of the term "new industrial undertaking" under section 84.
4. Claim made under the Super Profits Tax Act in relation to the Income-tax Act.
5. Limitation of relief under section 84 to 6% of capital employed.
6. Application of section 154 for rectifying mistakes apparent from the record.
Analysis:
The judgment delivered by the High Court of Allahabad pertains to a petition filed by a private limited company regarding a claim for rebate under section 84 of the Income-tax Act for the assessment year 1963-64. The petitioner did not make any claim for rebate under section 84 during the assessment proceedings or before the appellate authority. Subsequently, the petitioner filed an application under section 154 of the Act seeking relief under section 84, which was rejected by the Income-tax Officer and the Commissioner of Income-tax. The court emphasized that the claim for rebate under section 84 must be made by the assessee during the assessment proceedings, as it is a mandatory provision that requires fulfillment of specific conditions, including the industrial undertaking being new and other criteria outlined in section 84(2).
The court rejected the argument that a claim made under the Super Profits Tax Act automatically extends to the Income-tax Act, highlighting that the two acts are distinct, and no finding had been made regarding the newness of the petitioner's undertaking under section 84. Additionally, the court noted that the relief under section 84 is limited to 6% of the capital employed, which requires specific computation according to rule 19. Since such computation was not provided, the necessary facts for the application of section 84 were not on record.
Regarding the application of section 154 for rectification of mistakes, the court distinguished previous cases where section 154 was applied to rectify errors in applying mandatory provisions of law. In the present case, the petitioner failed to make a claim for rebate under section 84, and the Income-tax Officer did not commit a mistake that could be rectified under section 154. The court emphasized that section 154 is not intended for introducing new claims that should have been made during assessment proceedings and requires existing facts on record for rectification.
In conclusion, the court dismissed the petition, stating that there was no merit in the petitioner's claim for relief under section 84 due to the failure to fulfill the necessary requirements and the absence of a valid claim during the assessment proceedings.
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1972 (9) TMI 48
The High Court of Allahabad allowed the petition under Article 226 of the Constitution, quashing the recovery proceedings against the petitioner as no notice of demand was served upon him regarding income tax arrears due from his late father. Recovery proceedings were deemed illegal and unsustainable. The petitioner was also entitled to costs.
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1972 (9) TMI 47
Issues:
1. Imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961 for undisclosed income.
2. Applicability of the Explanation appended to section 271(1)(c) of the new Act regarding concealment of income.
Analysis:
The judgment pertains to a reference under section 256(1) of the Income-tax Act, 1961, involving the imposition of a penalty on a Hindu undivided family for undisclosed income. The case involved an assessment order for the year 1951-52 under the old Act, where a total income of Rs. 1,38,284, including Rs. 1,00,000 from undisclosed sources, was assessed. The assessee failed to explain the nature and source of two sums of Rs. 50,000 each, leading to penalty proceedings under section 271(1)(c) of the new Act. The Tribunal set aside the penalty, prompting a reference on the legality of canceling the penalty.
The two key questions raised were whether a penalty could be imposed under the new Act for an assessment made under the old Act and whether the Tribunal was justified in canceling the penalty. Regarding the first question, the Supreme Court precedent in Jain Brothers v. Union of India was cited, establishing that penalties under the new Act could be imposed for assessments under the old Act. The second question revolved around the surrender of Rs. 50,000 by the assessee, with conflicting statements initially disowning the credit but later surrendering it for assessment, subject to no penalty being imposed.
The Tribunal found that the surrender was not voluntary but induced by discussions with the Income-tax Officer to avoid penalties. The Tribunal concluded that the charge of concealment was not proved, considering the circumstances of the surrender. The judgment also discussed the applicability of the Explanation to section 271(1)(c) of the new Act, which shifts the burden of proof to the assessee if income returned is less than assessed income. However, as this point was not raised before the Tribunal, it was deemed a new question and not considered in the judgment.
Ultimately, the court ruled in favor of the assessee, stating that the Tribunal was justified in canceling the penalty based on the circumstances of the case. The court highlighted that the burden of proof regarding concealment was not met, given the nature of the surrender and discussions with tax authorities. The judgment emphasized the importance of voluntary admissions and the procedural complexities of applying the Explanation to concealment cases, which were not addressed in this instance.
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1972 (9) TMI 46
Issues Involved:
1. Whether the Indian company had any business connections with Group A and Group B companies under section 42(1) of the Indian Income Tax Act, 1922.
2. Whether any part of the operations of such business was carried out in the taxable territories, making the non-residents' incomes reasonably attributable under section 42(3) of the Indian Income Tax Act, 1922.
3. Whether the Indian company was correctly treated as an agent of the non-resident companies under section 163 of the Income-tax Act, 1961.
4. Whether any profit could be deemed to accrue or arise in India to the non-resident companies in respect of the goods sold by them to customers in India.
Detailed Analysis:
Issue 1: Business Connections with Group A and Group B Companies
The Tribunal concluded that the Indian company had business connections with both Group A and Group B companies. The Indian company had an agreement with T.I. Export Ltd. (Export Company) but no direct agreement with Group A companies. Despite this, the Tribunal found that there existed a business connection due to the dealings facilitated by the Export Company. For Group B companies, the Indian company had direct agreements.
The Tribunal's findings were challenged by the assessee, who argued that there was no privity of contract with Group A companies and that it merely canvassed orders in India. For Group B companies, the assessee contended it acted solely as a canvassing agent without authority to accept offers or bind the companies legally.
Issue 2: Operations in Taxable Territories
The Tribunal found that part of the operations were carried out in India, invoking section 42(3) of the 1922 Act, which corresponds to Explanation (a) to section 9(1)(i) of the 1961 Act. The assessee argued that all significant operations, including procurement of raw materials, manufacture, and acceptance of orders, took place outside India. The Department, represented by Mr. Balai Pal, contended that the Indian company was not a mere canvassing agent but had significant authority and involvement in the business operations.
Issue 3: Agency under Section 163 of the 1961 Act
The Tribunal treated the Indian company as an agent of the non-resident companies under section 163 of the 1961 Act. The assessee argued against this, stating it had no authority to accept offers or bind the non-residents. The Department argued that the Indian company was the sole authorized agent with the power to enter into contracts, thus establishing an agency relationship.
Issue 4: Profits Deemed to Accrue in India
The Tribunal held that profits could be deemed to accrue or arise in India for both Group A and Group B companies. The assessee contested this, arguing that all contracts were finalized and accepted outside India, and no income was received or accrued in India. The Department maintained that the Indian company's activities facilitated the business operations, thus contributing to the income generation.
Conclusion:
Upon reviewing the facts and the Tribunal's findings, the High Court concluded:
- The Indian company had no business connections with the non-resident companies in Group A or Group B within the meaning of section 42 of the 1922 Act and section 9 of the 1961 Act.
- The Indian company did not have the authority to accept offers or enter into binding contracts on behalf of the non-resident companies.
- The Indian company's role was limited to canvassing orders, which were accepted by the non-residents outside India.
- The Tribunal's findings on the existence of business connections and the attribution of profits to operations in India were incorrect.
Therefore, the High Court answered questions Nos. 1, 3, and 5 in the negative, concluding that the Indian company was not correctly treated as an agent under section 163 of the 1961 Act, and no profits could be deemed to accrue or arise in India. Consequently, questions Nos. 2, 4, and 6 did not arise for consideration. Each party was ordered to bear its own costs.
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1972 (9) TMI 45
The Income-tax Officer called upon the assessee during the years mentioned above to pay advance tax under section 18A(1) of the Indian Income-tax Act of 1922. Instead of paying the demanded amounts, the assessee filed estimates under section 18A(2) and on the basis of the said estimates paid advance tax. Ultimately, for the several years, he filed returns ; and the Income-tax Officer finally determined his incomes too - When the assessee estimates the advance tax payable consistently at lower figure for several figures and the returned income being much higher and the assessed income being still higher, whether penalty under section 18A(9)(a) can be levied on the assessee
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1972 (9) TMI 44
Issues Involved:
1. Whether the provisions for taxation, retirement gratuity, and dividends can be treated as reserves for computing the capital for the purpose of super profits tax under the Second Schedule to the Super Profits Tax Act, 1963.
Issue-wise Detailed Analysis:
1. Provisions for Taxation, Retirement Gratuity, and Dividends as Reserves:
The primary issue is whether the amounts set aside for taxation (Rs. 33,68,360), retiring gratuity (Rs. 9,08,106), and dividends (Rs. 18,41,820) can be considered "reserves" under the Second Schedule of the Super Profits Tax Act, 1963. The Super Profits Tax Officer rejected the assessee's contention, classifying these amounts as current liabilities and provisions, not reserves. The Appellate Assistant Commissioner initially accepted the assessee's view, but the Income-tax Appellate Tribunal reversed this decision, agreeing with the department that these amounts did not qualify as reserves.
Legal Definitions and Accounting Principles:
The judgment delves into the definitions and distinctions between "reserves," "provisions," and "liabilities" as understood in both accounting principles and legal context. According to the Companies Act, 1956, a "reserve" is an amount set aside out of profits not meant to meet any known liability, whereas a "provision" is for known liabilities of uncertain amounts. The Supreme Court's interpretation in Metal Box Company of India Ltd. v. Their Workmen and other cases was cited to clarify these definitions.
Taxation Provisions:
The liability to pay income tax is considered a present liability, even if the exact amount is determined later. This makes the provision for taxation a "provision" and not a "reserve." This interpretation aligns with the Supreme Court's judgment in Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax, which defined a debt as a present obligation to pay an ascertainable sum.
Retirement Gratuity:
The provision for retiring gratuity is also deemed a known liability, as it is a contractual obligation to pay employees upon retirement or death. Although the exact amount may vary, the liability itself is known, making it a "provision" rather than a "reserve."
Dividends:
Regarding dividends, the directors' recommendation to pay dividends creates a liability that shareholders can enforce once ratified. This recommendation earmarks the amount specifically for dividend payment, classifying it as a "provision" and not a "reserve."
Judicial Precedents:
The judgment references several cases, including Commissioner of Income-tax v. Century Spinning and Manufacturing Company Ltd., Indian Steel and Wire Products Ltd. v. Commissioner of Income-tax, and others, to support the distinction between reserves and provisions. These cases emphasize that the substance of the allocation, not just its terminology, determines its classification.
Conclusion:
The court concluded that the amounts set aside for taxation, retiring gratuity, and dividends are provisions, not reserves. Therefore, they cannot be included in the computation of the company's capital for super profits tax purposes. The question was answered in the negative, and the assessee was directed to pay the costs of the reference to the department, with an advocate's fee of Rs. 250.
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1972 (9) TMI 43
Madras Agricultural Income Tax Act - meaning of the expression ' for the purpose of the land 'provided in section 5(e) - When the expenditure is reasonably connected with the holding of the land and using it for the purpose of agriculture, then such expenditure will be covered by this expression
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1972 (9) TMI 42
Contention of the learned counsel for the petitioner is that section 182(4) of the Act does not contemplate that tax due from one partner er may be recovered from another partner of a registered firm - Section 182(4) and 189(3) of Income-tax Act, 1961 indicate that when taxes due by a partner of a registered firm which has been dissolved is not recoverable from him - tax including interest and penalty, can be recovered from any other partner of the firm - but the tax sought to be realised must not exceed 30 per cent. of the defaulting partner's share in the profits of the firm Petition dismissed
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1972 (9) TMI 41
Real owner of deposits and shares - When there is evidence to show that deposits and shares in the name of assessee's wife were actually belonging to the wife - Whether interest and dividend from these assets can be included in the husband's assessment - Suffice it for us to say that the evidence on record did not establish that either the purchase in the name of the minor of the lands or the deposit of Rs. 25,000 in the name of Laxmi Ammal was benami for the assessee. As this sum of Rs. 25,000 formed the source for the purchase of shares and the other deposit which yielded the dividends and interest, the income therefrom is not liable to be included in the assessee's income.
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1972 (9) TMI 40
Petitioner is a co-operative society - Whether a co-operative society engaged in banking business is entitled to deduction in respect of interest on government securities - whether assessee can seek remedy by rate against the revision order by the Commissioner disallowing deduction claimed
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1972 (9) TMI 39
Whether the losses subsequent to the date of general meeting at which dividends were declared can be considered for the purposes of super-tax and undistributed dividends - Whether Tribunal was right in holding that in considering the reasonableness or unreasonableness of the assessee's action in not distributing any dividend, the Income-tax Officer should have taken into account the losses suffered up to the last day of the 12 months following the end of the previous year as distinct from up to the date of the general meeting - Tribunal was not right in considering the reasonableness of the assessee's action in not distributing any dividend with reference to losses suffered by the assessee in the following year - Question answered in the negative in favour of the department
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1972 (9) TMI 38
Travancore Excess Profits Tax Act - petitioner is the same in all these writ petitions and he has prayed for the issue of writs of certiorari to quash the four assessment orders of the same date, December 31, 1963, passed under the Travancore Excess Profits Tax Act - Whether assessment and recovery of excess profit tax could be made after disruption of a Hindu Undivided family - Whether a fresh plea could be made for the first time at the Appellate stage
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1972 (9) TMI 37
Retirement of Partner - Reassessment of Firm - These are petitions for the issue of writs of certiorari to quash the orders of the respondent made under section 155 of the Income-tax Act, 1961 - Though the petitioner has raised a point in the affidavit that the provisions of section 155 should not be invoked for the assessment years in question and only section 35(5) of the old Act was applicable, he was not able to show how under section 35(5) or the provisions of the old Act, the revision of assessment could not have been made. Both under the old Act and under the new Act, there is power to rectify the partner's assessment consequent on the assessment or reassessment of the income of the firm. The provisions in the old Act and in the new Act in respect of this power are substantially the same - petition dismissed
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1972 (9) TMI 36
This is a petition under article 226 of the Constitution arising out of a proceeding for search and seizure of the account books of the petitioner under section 132 of the Income-tax Act, 1961 - Whether the party subjected to search and seizure operation has a right to inspect the records and get copies - whether a search and seizure operation carried out when reason for ordering the operation was not recorded is valid
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1972 (9) TMI 35
Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the relief under section 86 was only with reference to the net amount of interest and not on the gross amount - Whether the method of computation of net interest from tax-free securities adopted by the Income-tax Officer was correct - Whether the notification issued under Indian Income-tax Act, 1922 is applicable after the repeal of that act and whether the rebate is available on gross interest or on the interest after deduction of expenses
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9911796707
