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Showing 81 to 94 of 94 Records

• 1967 (3) TMI 14
  

  Assessee contended before the Tribunal that the ITO, District I(2), was the proper officer to file the appeal not the ITO, District VI, because he had made the assessment - held that appeal before the Tribunal was filed by a proper person - question is answered in favour of the department

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• 1967 (3) TMI 13
  

  Assessee-company carries on general insurance business - amount paid to policyholders - claim for deductions for the purpose of computation of its taxable income - This expenditure cannot be said to be contingent, and the assessee is entitled to deduction - Appeal of assessee is allowed

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• 1967 (3) TMI 12
  

  Share income - there was no contribution of any sum in Firms by the minor son out of the gift money from the father - no evidence on record to justify a finding that the minor had been admitted as a partner in the firm - share income from those Firms was not liable to included in the assessment under s. 16(3)(iv) - Revenue's appeal dismissed

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• 1967 (3) TMI 11
  

  Section 16(3)(a)(iv) - Trust - transfer of assets - Whether the creation of a trust by K in favour of his minor grand-children concurrently with the creation of a trust by J in favour of K's daughters constitute indirect transfers of assets by K and J to their respective children - Appeal of revenue is allowed by way of remand

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• 1967 (3) TMI 10
  

  Business income - appellants were lessees of a cinema theatre - business of exhibiting cinematograph films- it is difficult to hold that the appellants have made out their case that the venture of Prakash Talkies was a part of a general business of exhibiting films in cinema theatres carried on by the appellants - deduction not allowed - appeal of assessee fails and is dismissed

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• 1967 (3) TMI 9
  
  Issues:
  1. Whether a Hindu undivided family is entitled to exemption from taxation on interest income from Government securities under a specific notification.
  2. Interpretation of the notification regarding exemption for "Ruling Chiefs and Princes of India" in the context of the present case.
  3. Determining ownership of Government securities in the context of Hindu law and its impact on tax exemption eligibility.
  
  Analysis:
  1. The Supreme Court considered whether a Hindu undivided family could claim exemption from taxation on interest income from Government securities under a notification issued under section 60 of the Income-tax Act, 1922. The case involved the late Raja of Bhor's estate passing to his three sons, who formed a Hindu undivided family. The eldest son, now the Raja of Bhor, filed returns claiming exemption based on the notification. The Central Government's notification exempted "interest on Government securities held by Ruling Chiefs and Princes of India as their private property." The Income-tax Officer initially rejected the claim, leading to appeals and subsequent judicial review.
  
  2. The Appellate Assistant Commissioner and the Appellate Tribunal supported the assessee's claim, interpreting that the securities were held on behalf of the Ruling Chief or Princes of Indian States, thus making them eligible for the exemption. The High Court of Bombay also ruled in favor of the assessee, upholding the tax exemption on the interest income from the Government securities. The High Court's decision was based on the interpretation of the notification and its applicability to the present case involving the Hindu undivided family of the Raja of Bhor.
  
  3. The Supreme Court addressed arguments challenging the ownership of the Government securities, asserting that the Hindu undivided family's status as a separate unit of assessment under the Income-tax Act did not determine ownership under Hindu law. The court delved into Hindu law principles, emphasizing the unity of ownership in a Mitakshara coparcenary. It highlighted that until partition, all coparceners have rights over the entire coparcenary property, leading to the conclusion that the property was held by the assessee on behalf of the Raja of Bhor and his brothers. Consequently, the Supreme Court affirmed the High Court's decision, dismissing the appeals and upholding the tax exemption for the interest income from the Government securities held by the Hindu undivided family.

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• 1967 (3) TMI 8
  

  Assets destroyed by fire in the year 1948, - assessee received surplus of the compensation money over the written down value of the assets in 1950 - not taxable under the 4th proviso to s. 10(2)(vii) as the income of the assessee for the year 1950.

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• 1967 (3) TMI 7
  
  Issues:
  Interpretation of section 10(2)(xi) of the Income-tax Act regarding deductibility of losses incurred in the course of business.
  
  Detailed Analysis:
  The case involved an appeal by a private limited company acting as managing agents for various concerns, including an agreement with Amer-Hind Manufacturers Limited. The company advanced funds to Amer-Hind Manufacturers Ltd., which later failed in its business, resulting in a substantial outstanding amount of Rs. 4,03,203 owed to the company. The company claimed a deduction for this amount as a business loss for the assessment year 1956-57. The Income-tax Officer initially considered the loss as a capital loss, not deductible as a business expenditure. However, the Appellate Tribunal found that the advances and payments made were in the course of the company's business as managing agents, as per the terms of the managing agency agreement and the memorandum of association.
  
  The Appellate Tribunal referred a question of law to the High Court under section 66(1) of the Income-tax Act, seeking clarification on whether the debt incurred by the company was in the course of its business, making the loss deductible under section 10(2)(xi). The High Court, however, held that the loss arising from the advances was a capital loss related to the structure of the managing agency business. The High Court's decision was based on the premise that the company acquired the managing agency on the condition of providing loans and making advances, considering the loss as part of the capital framework rather than a business expenditure.
  
  Upon appeal to the Supreme Court, it was argued that the High Court erred in its interpretation of the question referred to it. The Supreme Court agreed with the appellant-company, noting that the High Court had overstepped its jurisdiction by disregarding the findings of fact established by the Appellate Tribunal. The Supreme Court emphasized that the advances and guarantees made by the company were indeed in the course of its business as managing agents, as supported by the terms of the managing agency agreement and the memorandum of association. Therefore, the Supreme Court set aside the High Court's judgment and held that the loss incurred by the company was deductible under section 10(2)(xi) of the Income-tax Act.
  
  In conclusion, the Supreme Court allowed the appeal, directing that the question referred to the High Court should be answered in favor of the assessee, confirming the deductibility of the loss incurred by the company in the course of its business activities.

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• 1967 (3) TMI 6
  

  Whether the cost of land is entitled to depreciation under the Schedule to the IT Act along with the cost of the building standing thereon - judgment of the High Court set aside and the question referred is answered in the negative and against the assessee

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• 1967 (3) TMI 5
  

  Whether the notice u/s. 34 of the IT Act was properly served on the assessee within the prescribed period - The notice was properly served under Or. V, r. 20(1), of the CPC and as the ITO was not a Court, it was not incumbent on him to affix a copy of the notice on the notice board of the income-tax office - appeal of department is allowed

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• 1967 (3) TMI 4
  

  Allowance under section 10(2)(xi) - conditions for the grant of the allowance are satisfied-debt had become irrecoverable in the relevant accounting year and the amount had been actually written off as irrecoverable in the books of the appellant - hence loss is deductible - assessee appeal allowed

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• 1967 (3) TMI 3
  

  Whether entire sums spent in carrying out the obligations subject to which lands were sold by the assessee were allowable in computing the assessee's profits from the land business - Whether the assessee was liable to be taxed only on the actual realisation of sales in cash subject to the allowances admissible under the IT Act - both the questions referred to the High Court have been rightly answered by it in favour of the assessee - revenue's appeal dismissed

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• 1967 (3) TMI 2
  

  Claim for allowance u/s. 10(2)(xv) - order of the Tribunal disallowing the claim for allowance of the whole of the additional remuneration was not supported by any evidence - tri8bunal was not justified in disallowing the claim - revenue's appeal dismissed

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• 1967 (3) TMI 1
  
  Issues Involved:
  1. Validity of the reassessment proceedings for the year 1945-46.
  2. Proper service of notice under section 34(1)(a) of the Indian Income-tax Act, 1922.
  3. Compliance with the procedural requirements for service of notice.
  4. Authority of the Income-tax Officer to reassess based on the notice served.
  
  Detailed Analysis:
  
  1. Validity of the Reassessment Proceedings for the Year 1945-46:
  The reassessment proceedings for the year 1945-46 were initiated based on the information received by the Income-tax Officer that large sums of money were credited in the respondent's account, which were not disclosed in the original return. The original return filed by the respondent showed a net business loss of Rs. 7,960, while the reassessment brought to tax an additional amount of Rs. 61,036. The High Court had held that the reassessment proceedings were invalid due to improper service of notice. However, the Supreme Court overturned this decision, stating that the reassessment proceedings were valid as the notice was duly served.
  
  2. Proper Service of Notice Under Section 34(1)(a) of the Indian Income-tax Act, 1922:
  The crux of the case revolved around whether the notice under section 34(1)(a) was properly served. The Income-tax Officer initially issued a notice on March 18, 1954, which was claimed to be accepted by the respondent's son. However, this was deemed irregular, and a fresh notice was issued on March 24, 1954, and affixed to the respondent's business premises on March 25, 1954. The Supreme Court emphasized that service of notice is a condition precedent to the initiation of reassessment proceedings. The Court found that the notice was affixed in the presence of two witnesses and that the process-server's affidavit supported this action.
  
  3. Compliance with the Procedural Requirements for Service of Notice:
  The procedural requirements for service of notice are outlined in Section 63 of the Indian Income-tax Act, 1922, which assimilates the provisions of the Code of Civil Procedure. Order V, rules 17 and 19 of the Code of Civil Procedure were particularly relevant. Rule 17 allows for affixing the notice on a conspicuous part of the house if the defendant cannot be found, while Rule 19 requires verification of the service. The Supreme Court held that the process-server had made reasonable attempts to serve the notice personally and, upon failing to find the respondent, affixed the notice as per the procedural requirements. The Income-tax Officer's inquiry and declaration of valid service further supported this compliance.
  
  4. Authority of the Income-tax Officer to Reassess Based on the Notice Served:
  The Supreme Court concluded that the Income-tax Officer had the authority to reassess the respondent's income based on the notice served. The Court rejected the argument that the notice was not duly served, emphasizing that the statutory requirements were satisfied. The Tribunal and the High Court's findings of improper service were deemed erroneous. The Supreme Court noted that the process-server's actions and the subsequent declaration by the Income-tax Officer fulfilled the legal requirements for valid service.
  
  Conclusion:
  The Supreme Court allowed the appeal, overturning the High Court's decision and confirming the validity of the reassessment proceedings. The Court held that the notice under section 34(1)(a) was duly served, satisfying the procedural requirements, and thereby, the Income-tax Officer had the authority to reassess the respondent's income. The appeal was allowed with costs awarded to the appellant in both the Supreme Court and the High Court.
  
  Appeal allowed.

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