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Income Tax - Case Laws
Showing 81 to 100 of 1058 Records
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1948 (8) TMI 26
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... ... ..... The Excess Profits Tax Officer as a matter of concession and in accordance with instructions from Government set off the share of the deficiency of Pachayappa Nadar against his share of excess profits, because he continued to be a partner even after the change in the persons carrying on the business. An application was made to us to extend such a concession to the case of the managing member of the family who though in different capacities was the same person both before and after the change. This is not a matter which has been referred to us nor could it be properly the subject of a reference, depending, as it does, entirely on the grant of a concession in accordance with instructions from the Government. We cannot accede to this request on behalf of the petitioner. The answer to the question framed is that in the circumstances set out in the question, there is a change in the persons carrying on the business within the meaning of Section 8(1) of the Excess Profits Tax Act.
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1948 (8) TMI 25
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... ... ..... words "actually allowed" are unambiguous and connote the idea that the allowance was in fact given effect to. The depreciation allowance may be set off against the profits or gains under Section 10(2), clause ( vi), in calculating the assessable income; and when so set off, the depreciation allowance is actually allowed. In the present case, as there was loss, the depreciation allowance of ₹ 87,244 was not set off and cannot be said to have been actually allowed. In our opinion, the Tribunal was right in holding that in determining for the 1942-43 assessment, the written down value of the assets as brought forward on 1st January, 1941, the allowable depreciation of ₹ 87,244 to which effect could not be given by reason of there being no profits in the preceding year, was not depreciation "actually allowed" within the meaning of Section 10(5)(b ) of the Act as amended in 1941. The answer to the question referred is therefore in the affirmative.
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1948 (8) TMI 24
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... ... ..... observed, after dealing with the earlier cases before the amendment and the introduction of this provision, as follows - "These decisions, in my opinion, lay down the general principle in correct terms though they are now more or less of an academic interest only in so far as partnerships governed by the Partnership Act are concerned inasmuch as a provision has been inserted in the present Act disallowing ' any allowance in respect of any payment by way of interest, salary, commission or remuneration made by a firm to any partner of the firm' … No distinct provision has yet been made about Hindu joint family trading firms to which the Partnership Act does not apply and in my judgment, the principles underlying the decisions to which I have referred are still applicable to them". In this case, there can be no doubt that the payments of these two sums were made to the partners by way commission and the answer to the question must be in the affirmative.
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1948 (8) TMI 23
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... ... ..... d to findings of law which have not been sought to be questioned by either the assessee or the Commissioner by an application for reference. One of the facts in this case is that the Tribunal held that the deed of partnership was not operative after the 29th May, 1942, and there was no application for a reference on the question as to the correctness of that finding. We do not therefore think that there is anything in the frame of the question which compels this Court to deal with the question of law with reference to which there has been no application to refer to this Court. We therefore hold that the assessee is not entitled to be heard on the question whether the finding of the Tribunal that the deed of partnership ceased to be in force after the expiry of the period of three years is right or wrong. The answer to the question will be in the negative. Because the assessee has failed he will pay the costs of this reference, ₹ 250. Reference answered in the negative.
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1948 (8) TMI 22
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... ... ..... r the other words going before that word. So long as it is an association which produces income, profits or gains, it is assessable to tax by force of Section 3. It is unnecessary in order to constitute an association that there should be any mutual rights or obligations among the members enforceable in a Court of law. So long as the object of the association is to carry on for gain a business which is not unlawful―the object in the present case being to sell arrack or toddy, as the case may be, under the authority of a licence duly granted by the Government―the supervening circumstance of the formation of a partnership in contravention of the abkari law does not render the income, profits and gains of the association immune from taxation. In view of these principles, we must answer the question in both the cases in the affirmative. In each case, the applicant will pay the Commissioner the costs of the reference ₹ 250. Reference answered in the affirmative.
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1948 (8) TMI 21
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... ... ..... s in this case that the method adopted by the assessee in the period of assessment is in accordance with the method of accounting regularly followed by the assessee in the past then that method must be accepted in the absence of anything to suggest that it is improper or patently false. As the Privy Council observed at page 244 in Commissioner of Income-tax, Bombay v. Sarangpur Cotton Manufacturing Co., Ltd., of Ahmedabad2, the section " clearly makes such a method of accounting a compulsory basis of computation, unless, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced there from." It has not been established before us in this case that there was anything in law or principle which empowered the Income-tax Officer to reject the method of accounting adopted by the assessees. The answer to the question must be in the affirmative. The respondents will have their costs, ₹ 250. Reference answered in the affirmative.
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1948 (8) TMI 20
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... ... ..... f a company selling part of its property for a higher price than it had paid for it, and keeping that price as part of its capital, nor a case of a company merely changing the investment of its capital to pecuniary advantage." It cannot be said that there is no material in this case on which the Tribunal can rest its conclusion that the purchases by the assessee were not in the nature of investment or change of investment, but really in the nature of a business. The learned counsel for the assessee cited to us the decision of the Allahabad High Court in In re, Seth Ganga Sagar 1934 2 I.T.R. 153; A.I.R. 1934 All. 370. But the decision in that case really does not help him as the learned Judges there do not lay down a rule different from that enunciated in Californian Copper Syndicate (Limited and Reduced) v. Harris. The answer to the question must be in the affirmative. The applicant will pay the costs of the reference, ₹ 250. Reference answered in the affirmative.
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1948 (8) TMI 19
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... ... ..... nner in which the guardian could have acted is of no avail. It may be one of those hard cases, mentioned by the Full Bench in the case cited above, but a correct legal expedient will have to be devised surmount the difficulty. One device was attempted in the partnership deed on the 19th August, 1940, but that was, on the face of it, an admittedly illegal instrument. Whatever the proper solution of the matter may be, if a registration has to be obtained under Section 26A, it can only be by a genuine firm which specifies the actual shares of each partner and when that is not done, the Income-tax Officer is competent, if not bound, to reject that application. The answer to the question referred by the Tribunal is that the firm purported to have been brought into existence by the deed of partnership dated 14th August, 1941, cannot be registered under Section 26A of the Income-tax Act. The applicant will pay the respondent's costs, ₹ 250. Reference answered accordingly.
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1948 (8) TMI 18
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... ... ..... an only come to an end by either an order of assessment or an order declaring that no assessment can be made. In this case admittedly there is no such order and when eventually proceedings are taken under Section 34, such proceedings must be deemed to relate to the proceedings which commenced with the public notice under sub-section (1) of Section 22. Finally the learned counsel for the applicant asked us to treat the notice under Section 34 calling upon the assessee to submit his return within 35 days of its receipt as an extension of time granted to him in his discretion for the delivery of the return within the meaning of the proviso under Section 22(1). This point was not raised before the Tribunal and the applicant cannot be permitted to raise it before us; nor do we think that there is any substance in this point. The answer to the question must be in the affirmative. The applicant will pay the costs of this reference ₹ 250. Reference answered in the affirmative.
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1948 (7) TMI 11
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... ... ..... the expense which must be considered. The expense in this case was not a capital investment it was incurred not to distribute but to increase, and in that sense to earn the profits. On the other hand, if it is to be held that such expenses are not deductible what is to be said of the costs of audit which the Companies Acts make necessary or of that part of the cost of book-keeping which is used in the preparation of such an audit or of accounts for taxation? They are not incurred for the purpose of earning the profits of the trade in the limited sense contended for by the Crown. It is said that the expense of litigating questions of taxation has never been sought to be deducted, and it may be so, but it is also true that the expense of paying accountants and auditors has been deducted, and in any event the fact, if it be the fact, throws no legal light upon the construction of the words in question. For these reasons I am in favour of allowing the appeals. Appeals dismissed.
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1948 (7) TMI 10
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... ... ..... under cl. (c) of sec. 7 of the Assam Agricultural Income-Tax Act, 1939 (Assam Act IX of 1939). 83. In ascertaining the agricultural income a deduction must be made by reason of sec. 7 (c) of the Act of a sum equal to 15 per cent of the total amount of rent which accrued due in the previous agricultural year in respect of the charges for collecting the same. It is to be observed that the deduction is 15 per cent of the total amount of rent which accrued due, and not 15 per cent of the total amount of rent collected. If in a particular year all the accrued rent is collected together with arrears due for past years, the deduction allowed is 15 per cent of the rent which accrued due and not 15 per cent of the total collected. That appears to he the view of the Board of Agricultural Income-Tax and with that view I agree. The assessee will be entitled to the return of the deposit if any and the costs of this Reference. Hearing-fee assessed at 30 gold mohurs. Mookerjee, J. I agree.
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1948 (7) TMI 9
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... ... ..... which the Commissioners can base such an estimate it is simple guess work and as a matter of fact has probably been entirely falsified by the course of events which has included the recent war. If one assumes that the Commissioners are satisfied as a matter of fact that the shares could not have been sold in the years in question, such a valuation must either be a contradiction of the fact or an estimate of future value. The Commissioners should, in my opinion, come to a conclusion on the evidence how many of the shares in question could have been sold in the years of computation, and at what price, and should bring into the appellant company's account that figure as against the cost of the concessions to the appellant company. To adopt this principle appears to me to be in accord with every case which has been cited to your Lordships' House on this appeal and with the fundamental principles of the Income Tax Acts. Appeals allowed. Case remitted to the Commissioners.
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1948 (7) TMI 5
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... ... ..... be said that the rule is ultra vires. That being so, question 4 must be answered in the negative. This was also the view of the Board. Question 5.-Whether the assessee is in law liable to be assessed as agent of His Highness the Maharaja of Tripura in his personal capacity or in his capacity as the ruler of the Tripura State. I have already held that this income is not liable to be assessed under the Assam Agricultural Income-tax Act and, therefore, the agent of the Maharaja, even if properly appointed, cannot be assessed because the agent cannot possibly be liable if the non-resident assessee is not himself liable. The answer to question 5, therefore, must be in the negative. I cannot accept the view of the Board that such agent is liable. The assessee is entitled to his cost of this reference which we assess at two gold mohurs, to be paid by the Assam Government. The deposit, if any, will be returned to the assessee. MUKHERJEA, J.--I agree. Reference answered accordingly.
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1948 (7) TMI 4
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... ... ..... the Commissioners can base such an estimate it is simple guess work and as a matter of fact has probably been entirely falsified by the course of events which has included the recent war. If one assumed that the Commissioners are satisfied as a matter of fact that the shares could not halve been sold in the years in question, such a valuation must either be a contradiction of the fact or an estimate of future value. The Commissioners should, in my opinion, come to a conclusion on the evidence how many of the shares in question could have been sold in the years of computation, and at what price, and should bring into the appellant company’s account that figure as against the cost of the concessions to the appellant company. The adopt this principle appears to me to be in accord with every case which has been cited to your Lordships’ House on this appeal and with the fundamental principles of the Income Tax Acts. Appeals allowed. Case remitted to the Commissioners.
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1948 (7) TMI 3
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... ... ..... rieved by an order under the provisions of the Act, he will have to resort to the remedy provided thereunder. But if a party takes the remedy provided by the Act in strict conformity thereof, but the Tribunal constituted under the Act refuses to discharges its duties provided by the same Act, it is not open to the Tribunal or the authority to say that he cannot be compelled to discharge his statutory functions. Section 45 is extended only to govern such cases and to compel officers to discharge their statutory duties. I therefore also reject this argument. I am clearly of opinion that this is a fit case for making an order under Section 45 of the Specific Relief Act. The respondent is hereby directed to hear and determine I.T.R. Nos. 78 to 82 of 1947-48 preferred by the petitioner herein against the orders of the Appellate Assistant Commissioner of Income-tax, Coimbatore, in accordance with law. The respondent will pay the costs of the petitioner. One set. Order accordingly.
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1948 (7) TMI 2
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... ... ..... it has any relevance to the case of a mortgagee in possession of agricultural land in India, matters upon which it is unnecessary to express any opinion, it appears to their Lordships to give no assistance to the Commissioner. For the only result of its application to the present case must be that rent received by the mortgagee is to be regarded as the income of the mortgagor and this affords no possible ground for saying that it loses its quality of agricultural income. Their Lordships are therefore of opinion that the whole of the sums mentioned in the third and fourth questions are without distinction to be regarded as agricultural income within the meaning of the Act. As has been already stated the same considerations apply to the assessment for the years 1940 to 41 and the same results follow. Their Lordships are of opinion that the two appeals of the asses-see and the two appeals of the Commissioner must be dismissed and they will humbly advise His Majesty accordingly.
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1948 (7) TMI 1
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... ... ..... erested only in the particular bond which was given. They have considered the terms of the bond and hold the view which they understand to be also the view of the High Court of Patna, that upon its true construction the continuance of the personal liability for the debt was recognised and affirmed. They agree therefore with the High Court that on this basis the point at issue is governed by the decision of their Lordships in Raja Raghunandan Prasad Singh v. Commissioner of Income-tax 1933 1 ITR 113 . Their Lordships will accordingly advise His Majesty that these appeals be allowed and that the questions raised in appeals 1, 3 and 4 and the first question raised in appeal No. 2 be answered in the negative and that the several respondents pay the costs of the appellant in the High Court of Patna. The negative answer of the High Court to the second question raised in the second appeal will remain undisturbed. The respondents will pay the costs of the appeals to their Lord ships.
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1948 (6) TMI 1
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... ... ..... is that where an assessee receives income, not itself of a character to fall within the definition of agricultural income contained in the Act, such income does not assume the character of agricultural income by reason of the source from which it is derived, or the method by which it is calculated. But if the income received falls within the definition of agricultural income it earns exemption, in whatever character the assessee receives it. In the present case the assessee received no agricultural incomes as denned by the Act, it received remuneration under a contract for personal service calculated on the amount of profits earned by the employer, payable, not in specie out of any item of such profits, but out of any moneys of the employer available for the purpose. The remuneration therefore is not agricultural income and is not exempt from tax. For these reasons their Lordships will humbly advise His Majesty that this appeal be dismissed. The appellant must pay the costs.
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1948 (4) TMI 7
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... ... ..... nch. It was also argued that it is impossible to believe, when the amount remitted from British India was small, that the assessees would have made in Mandraila such a large amount of profits. But this is really the same argument over again in another form. It may be that the assessees were able to invest other sums as capital in business by taking loans from Mandraila or that the assesses were able to invest he amount received from British India at a very high rate of interest. For the reason given above, I would answer the question in the negative, and hold that the Income-tax authorities were right in treating ₹ 11,002 as the profit of the Mandraila business brought into British India and assessable as such. As the assessees have succeeded in one reference and failed in the other, I would make no order for costs for the hearing of the two references in this Court. MEREDITH, J.―I am in complete agreement with my learned brother. References answered accordingly.
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1948 (4) TMI 5
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... ... ..... at fraud must be established by strong and cogent proof. Each of these facts standing by itself is explainable, and even when viewed as a whole, they do not, in my opinion, justify prudent man in considering that fraud is established, or, to put it in another way, that the partnership is disproved. As I have said before, the question which the Courts have to decide in a case of this type is whether there is sufficient material on which a prudent man ought, under the circumstances of the particular case, to act. Prudent men may draw this conclusion or that on certain facts but there are some facts on which no prudent man would be allowed in a Court of law to reach a particular conclusion. That, in my opinion, is the case here. I agree with Sheode, J., and answer the question referred in the negative, that is to say, I hold that the necessary scintilla of evidence required for a finding that there was no genuine firm is wanting in this case. Reference answered in the negative.
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