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Income Tax - Case Laws
Showing 1 to 20 of 1058 Records
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1949 (12) TMI 41 - MADRAS HIGH COURT
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... ... ..... n that there was a partnership which was resident in British India and that its income was liable to assessment in British India, still the Income Tax Officer having taken action within the period of four years of the end of that year, the assessment on the firm was justified under Section 34, Income Tax Act. We do not think there is any room whatever for the argument advanced on behalf of the assessee that there has been no honest exercise of the Income Tax Officer's judgment in the present case, that he must be fixed with knowledge of the existence of the firm as a resident in British India even in 1941-42 and that therefore the present proceedings are illegal. His action was perfectly justified under the terms of Section 34, and the answer to the second question that has been referred to us must be in the affirmative and against the assessee. The assessee is directed to pay the costs of the Commissioner in R. C. No. 55 of 1946 which we fix at ₹ 250/-. C.R.K./D.B.
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1949 (12) TMI 36 - MADRAS HIGH COURT
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... ... ..... d Judges of the Nagpur High Court state that the widow would be the manager of the joint Hindu family if her sons happened to be minors at the time of the death of her husband. She would be the guardian of her minor sons till the eldest of them attains majority but she would not be the manager of the joint family for she is not a coparcener. If she were the manager then she should continue to be the manager for her life notwithstanding her sons' attainment of majority. It is ages since Hindu society, excepting certain communities, ceased to be matriarchal. I therefore think that the decision in Commissioner of Income-tax v. Lakshminarayan Raghunath Das, 1948-16 I.T.R 313 (A.I.R. (36) 1949 Nag. 128), is, with all deference to the learned Judges, an unwarranted extension of well settled principles of Hindu law and I am unable to follow it. I, therefore, agree with my learned brother in the answer which he has given to this reference and in the direction for costs. o p /o p
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1949 (12) TMI 34 - MADRAS HIGH COURT
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... ... ..... he extent the family assets have been actually partitioned or taken away from the family and allotted exclusively to the individual members, those assets cannot be considered to be the assets of the artificial joint family created by Section 25A (3). Nor could that joint family be assessed to income-tax under Section 25A(2) on the income derived from such assets. Authority in support of the above conclusions will be found in the decisions of the Privy Council in Sundar Singh Majithia's case (supra) and of the High Courts in Bansidhar Dhandhania's case (supra) and Waman Satwappa's case (supra). Though there has been a division of the business there has not been a partition of movables nor a partition of immovable properties into definite portion in the present case. Therefore, my answer to the question referred to us that there has been no partition within the meaning of Section 25A of the Income-tax Act. I agree with my learned brother in the direction for costs.
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1949 (12) TMI 33 - MADRAS HIGH COURT
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... ... ..... thin Section 42 of the Act but not by Section 4 or 4A(c)(b) of the Act. Income-tax is not like an excise duty levied upon a manufacturer or producer in respect of the commodity produced or manufactured. It is not a tax on goods or even on the sale proceeds of goods like a sales tax Governor-General in Council v. Province of Madras 1945 1 M.L.J. 225, 228 (P.C.). It is a tax upon profits which arise only on sales. Profits on coming into existence attract tax at that point Pondicherry Railway Co.'s case 1932 I.L.R. 54 Mad. 691 (P.C.). For these reasons I would answer the question referred to us in the affirmative and hold that the profits made by the assessee on sales which took place in British India constituted "income arising in British India" within the meaning of Section 4A(c)(b) of the Income-tax Act. I agree in the direction for costs given by my learned brother both in Referred Case 57 and in Referred Case 59 of 1946. Reference answered in the affirmative.
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1949 (12) TMI 32 - NAGPUR HIGH COURT
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... ... ..... see in fact received nothing at all. The mills were sold at a price a long way below the sum owed to the debenture-holders. The Court considered it equitable to relieve the debenture-holders of the payment of auctioneer's commission, the auctioneer being one of the debenture-holders. In the circumstances it would be unreasonable to regard the relief to the debenture-holders as income........... In any event it did not arise out of any business or exercise of vocation or occupation and it was of a casual or non-recurring nature." (p. 696). This is clearly distinguishable from the present case on our finding in paragraph 11 above. In conclusion, we answer the question referred to us in the affirmative. The assessee shall bear all costs of this reference. Counsel's fee ₹ 100 for the Commissioner and ₹ 500 for the assessee. A copy of this judgment be sent to the Appellate Tribunal under Section 66(5) of the Income-tax Act. Reference answered accordingly.
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1949 (12) TMI 31 - MADRAS HIGH COURT
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... ... ..... ) are assessable to Indian Income-tax is erroneous. I answer the second question referred to us in the affirmative. The answer to the third question is also in the affirmative. Prices fluctuate in the cotton, woollen and silk markets. The raw produce also differs considerably in quality and in its adaptability to different types of goods. Considerable experience and skilful judgment are necessary if suitable raw materials at favourable market rates are to be selected and purchased, and this is what the agents are doing from Madras. Having regard to the volume and regularity of the purchases made by the agents from Madras it is reasonable to attribute a portion of the profits to the purchase of raw materials by the agents in British India. Such selection and large scale purchase would be an "operation" within the meaning of Section 42(3) of the Act. I agree with my learned brother's direction regarding the costs of this reference. Reference answered accordingly.
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1949 (11) TMI 18 - MADRAS HIGH COURT
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... ... ..... nprofitable and was stopped permanently or for a time, the effect of that was not to make the business of the assessees different from what it was previously. The assessees might resume the traffic in grain futures and forward contracts if they think fit ; they might discontinue it if they do not find it paying ; but their business remains exactly what it was, viz., that of traders in rice and other grains. There is authority for this view in the case of Govindram Brothers Limited 1946 14 ITR 764 . For these reasons I hold that the dealings in forward contracts and grain futures carried on by the assessees in the Rangoon market through their agents did not constitute a separate or distinct business from their dealings in ready goods of the same type and their speculations must be held to be a part of the general business of the assessees as rice and grain merchants. I agree with my learned brother in the answer to the question propounded and in the direction as regards costs.
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1949 (11) TMI 15 - ALLAHABAD HIGH COURT
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... ... ..... profits but I fail to see on what material it can be held that the assessee decided to treat these sums as profits for the "previous year." From the way that the Income-tax Officer has acted in deducting ₹ 64,469 from the total amount it is clear that the sum of ₹ 1,56,657 was treated as the income made during the whole of the ten years when the partnership business was being carried on. My answer to the question referred to us is that the sum of ₹ 92,188 cannot be deemed to be the income, profits or gains of the previous year which can be assessed to income-tax in the assessment year 1938-39. The assessee is entitled to his costs which we fix at ₹ 500. Seth, J.-I agree and do not wish to add anyting. By the Court.-The answer of the Court to the question referred to us is that the sum of ₹ 92,188 cannot be deemed to be the income, profits or gains of the previous year which can be assessed to income-tax in the assessment year 1938-39.
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1949 (11) TMI 14 - MADRAS HIGH COURT
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... ... ..... ent, consumed, or expended in the process of the acquisition of the managing directorship or in the earning of the remuneration which has been paid to the managing director. The moneys of the family represented by the shares are still intact as an investment and the shares are giving dividends which go into the coffers of the family. I therefore agree with my learned brother in thinking that the income of Mr. Sankaralinga Ayyar as the managing director of the Indo-Commercial Bank cannot be said to be an asset or income of the joint family of which he is the manager. I also agree that the two decisions of the Patna High Court in Commissioner of Income-tax v. Darsanram 1945 13 ITR 419, Sardar Indra Singh v. Commissioner of Income-tax, Bihar and Orissa 1943 11 ITR 16 , at pp. 30 and 36, and in Dover Coalfield Extension Co. 1908 1 Ch. 65 take the correct view of the legal position. I agree in the answer to the reference and in the direction for costs given by my learned brother.
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1949 (11) TMI 12 - MADRAS HIGH COURT
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... ... ..... pal amount of the death duty has been held to be an inadmissible deduction in computing the business profit of the assessee in the decision in Ramaswami Iyengar v. Commissioner of Income-tax, Madras 1943 11 I.T.R. 597; I.L.R. 1944 Mad. 635. It has also been held by this Court that costs and expenses incurred by an assessee in resisting the claim of a foreign Government to levy death duty is not an admissible deduction in the computation of his foreign profits, the reason being that the expenditure is not one incurred exclusively or solely for the purposes of the foreign business Arunachalam Chettiar v. Commissioner of Income-tax 1945 13 I.T.R. 183; 1945 1 M.L.J. 258. The same principle, in my opinion, would also apply to the payment of interest on unpaid death duty by virtue of the provisions of the Ceylon Ordinance. I therefore agree with my learned brother in the answers which he has given to this reference and the direction regarding costs. Reference answered accordingly.
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1949 (11) TMI 11 - MADRAS HIGH COURT
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... ... ..... f such a joint borrowing by the assessee in the present case cannot be relied on as evidence of any such commercial practice. Neither in its inception nor subsequently when the assessee discharged the entire debt due from himself and Lakshmana Ayyar, could the loss be said to arise out of or in the course of the trade or business of the assessee as bookseller. The assessee was not a financier or banker in whose case alone all borrowing of capital for the business could be considered to form part of the stockin-trade of the banker. We consider therefore that the loss in this case was so far outside the scope and purposes of the business of the assessee as to make it impossible for us to sustain the conclusion of the Tribunal. We therefore answer the question propounded to us in the negative and in favour of the Commissioner of Income-tax. The costs of this reference ₹ 250 will be paid by the assessee to the Commissioner of Income-tax. Reference answered in the negative.
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1949 (11) TMI 10 - MADRAS HIGH COURT
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... ... ..... expectations of realisation being disappointed and its being obliged to claim an allowance or deduction for bad debts later on as the debtor in this case is the Government of India. The assessee would normally treat the profits and gains arising from these contracts as realised at Chalakudi as soon as the goods were inspected and approved by the Government and delivery was effected by putting them on rail at Chalakudi or other places in the Cochin State. In these circumstances, the question is, where did the operations take place from which the profits in substance arose ? My answer is that both the manufacture and sales of the goods were carried on outside British India and the resulting profits accrued or arose outside British India and were therefore not chargeable to Indian income-tax, the assessee being a non-resident. I agree with my learned brother in the answer he has given to the questions propounded in both the cases and in the direction for costs of the reference.
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1949 (10) TMI 9 - ALLAHABAD HIGH COURT
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... ... ..... on outside Indian States, and it is equally manifest that in ascertaining profits and gains from such business, a consideration of losses incurred in business carried on in an Indian State is absolutely irrelevant. I am, therefore, of the opinion that the loss of ₹ 25,391 in the business carried on in Indian States should be ignored in determining the assessee's income from business in the previous year relevant to the assessment year 1944-45. All that I wish to add to what has been said by my Lord the Chief Justice about the statement of case is, that it is extremely desirable that the statement of a case should contain not only the relevant conclusion of facts arrived at by the Tribunal, but that it should also contain all primary facts found, on which those conclusions are based, and that the statement of a case should have annexed to it at least the order passed on appeal by the Appellate Tribunal. I concur in the order proposed. Reference answered accordingly.
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1949 (10) TMI 4 - ALLAHABAD HIGH COURT
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... ... ..... perfectly clarified by the amount having been fixed under Section 4, sub-section (3), clause (e), of the Muslim Waqfs Act as the pay of the mutawalli. Under that clause the commissioner of Waqfs is required to fix the pay of the mutawalli of each waqf if the waqf is not exempt under Section 2. Section 2 relates to waqfs, which are known as private waqfs. In this case learned counsel for the assessee has given us the fact that the Chief Commissioner of Waqfs has, relying on the old usage, fixed the pay of the mutawalli as 10 per cent. of the total income. Our answers, therefore, to the two questions referred to us are - (1) The one-tenth of the income payable to Syed Jawad Ali Shah as his remuneration for his services rendered as mutawalli is not exempt from assessment. (2) The assessee receives this allowance in his capacity as a mutawalli and not as a beneficiary. The assessee must pay the costs of this reference, which we fix at ₹ 300. Reference answered accordingly.
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1949 (10) TMI 3 - HIGH COURT OF ALLAHABAD (LUCKNOW BENCH)
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... ... ..... portion for which special provision was made in the Excess Profits Tax Act itself. Learned counsel has relied on a decision of their Lordships of the Judicial Committee in Commissioner of Income-tax v. Western India Life Insurance Co., Ltd. 1949 17 ITR 125 , where their Lordships held that the third proviso to sub-section (1) of Section 4 was not applicable to insurance business as the profits had to be ascertained under Rule 2(b) of the Schedule to the Income-tax Act, 1922. That case was, however, decided on the special provisions relating to insurance law, and we do not think it is relevant. We are, therefore, of the opinion that the answer to the question referred to us by the Tribunal must be in the negative, that is the deduction of ₹ 4,500 allowed in the assessment of income-tax under the third proviso to Section 4 (1) of the Indian Income-tax Act is not allowable in computing profits chargeable to excess profits tax under Section 5 of the Excess Profits Tax Act.
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1949 (10) TMI 2 - ALLAHABAD HIGH COURT
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... ... ..... e procedure followed in this country. Without better information on the point it is not possible to say that the same considerations, which applied to Hoystead's case 1926 A.C. 155, apply to decisions in income-tax cases in this country also. Moreover, the precise question, whether the rule of res judicata applies to tax cases also, was not canvassed in Hoystead's case 1926 A.C. 155. It was undisputed that it applied to such cases and the only question canvassed before the House of Lords was whether the requirements of the rule were satisfied or not. For all the reasons mentioned above, I find myself unable to assent readily to the view that the rule of res judicata applies to income-tax cases, even to a limited extent, and as this case can be disposed of without deciding this question, I refrain from expressing any opinion one way or the other. I would reserve it for the future. With these observations, I concur in the order proposed. Reference answered accordingly.
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1949 (10) TMI 1 - ALLAHABAD HIGH COURT
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... ... ..... ry object of an immediate return or acquisition of assets which are not of lasting value and are likely to get exhausted or consumed in the process of the return or a very limited number of returns. Coming to the facts of the case before us, the amount of ₹ 5,000 was paid out of the income made in the course of the year. The payment was not made once and for all but had to be made every year. Without incurring this expenditure it was not possible for the company to make the profit which it is intended to be taxed, and if the assessee had to pay ₹ 10 per trip per vehicle which was the tax leviable, the company would have had to pay much more. Having taken all these facts into consideration, I am of the opinion that the sum of ₹ 5,000 was in the nature of a revenue expenditure and was deductible out of the income. The assessee must get the costs of these proceedings which are assessed at a sum of ₹ 500. SETH, J.--I agree. Reference answered accordingly.
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1949 (9) TMI 32 - CALCUTTA HIGH COURT
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... ... ..... upra) and the payment should be treated as expenditure from revenue and not from capital and is a proper deduction in the computation of profits or gains. The payment here cannot be attributed to capital inasmuch as it was not made with a view to bringing a tangible asset or advantage into existence. It is also to be noted that in order to make it a capital payment the asset or advantage is to be for the "enduring" benefit of the trade. As Rowlatt, J., said by "enduring" is meant "enduring the way that fixed capital endures." Romer, L.J., approved of this view in Dale's case (supra). Therefore, the payment or expenditure in question was made or incurred in the conduct of the business of the company and it is not a capital expense. I answer the question framed in the statement of case in the negative and I hold that in the facts of this case the sum of ₹ 22,500 is not taxable in the hands of the applicant company. Harries, C.J.-I agree.
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1949 (9) TMI 31 - ALLAHABAD HIGH COURT
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... ... ..... uestion does not arise and does not call for any answer. There can be no doubt that the application was not in order and was not in accordance with the Rules 2-6B. Learned counsel for the assessee has urged that as the partnership was registered in the previous years and the application for renewal for the year 1941-42 which had been filed on the 30th March, 1943, had not yet been finally disposed of by the Appellate Tribunal, the application dated the 26th July, 1943, was correctly filed as an application, for renewal. On the facts stated above that Krishna Murari was dead, that the legal representative had not signed the application, that the application did not state that one of the partners had died and his legal representative had been admitted into the partnership nor was any signature obtained of the legal representative who was not a minor and a false certificate was given that the constitution of the firm had not been altered, the answer can only be in the negative.
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1949 (9) TMI 29 - BOMBAY HIGH COURT
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... ... ..... fore it was open to the assessee to have raised this point at least with regard to the item of ₹ 4,40,878. They did not do so and did not challenge the mode of computation. In our opinion the Tribunal was right in refusing to refer the questions to us. Mr. Kolah contends that the question of law is apparent on the order itself and that it also arises from the facts stated by the Tribunal, but in our opinion there is no suggestion as to this point of law either in the order of the Tribunal or in the statement of the case submitted by the Tribunal to us. We therefore decline to direct the Tribunal to raise this question. The result is that the notice of motion fails. As some of the questions suggested really elucidated the matter and as we have ourselves taken a view that the questions were not properly framed by the Tribunal and had to frame the questions ourselves, we think that a fair order for costs will be that there should be no order as to the costs of the motion.
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