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1965 (9) TMI 59
... ... ... ... ..... reframing. The question so reframed would fall into two parts and would read as follows "(1) Whether, on the facts and in the circumstances of the case, the distribution of the shops in specie amongst the partners by the assessee-firm amounted to a business transaction in respect of the aforesaid twenty-eight shops by the assessee-firm? (2) If so, whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the said twenty-eight shops which were taken over by its partners at the time of the discontinuance of the firm's business should be valued at the book figure of ₹ 89,000 and not at ₹ 1,70,000, being their then market price?" Our answer to the first question is in the affirmative and our answer to the second question is also in the affirmative. The Commissioner will pay to the assessee-firm the costs of this reference. No order on the application. No order as to costs. Questions answered in the affirmative.
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1965 (9) TMI 58
... ... ... ... ..... the plaintiffs must also prove that the Taufir lands were gained by gradual accession from the recess of the river. Having regard to our conclusions on the other points, we do not wish to express any opinion on this question. Even if the Taufir lands were gained by gradual accession, this gain did not accrue for the benefit of the plaintiffs. The plaintiffs have failed to establish that they or their ancestors held any plot or plots to which the accretions were annexed. The plaintiffs have failed to prove their title based upon cl. (1) of s. 4 of Regulation XI of 1825. They have also failed to establish their claim of title based upon oral arrangements. Their claim of title based upon occupation of the disputed lands is also not established. They have failed to prove that they were in occupation of the disputed lands. Moreover, mere occupation does not confer tenancy rights. The result is that Civil Appeals Nos. 435 and 436 of 1959 must fail. C. A. Nos. 435 to 437 dismissed.
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1965 (9) TMI 57
... ... ... ... ..... (2). The notice under section 34(1) (a) was, therefore, clearly defective inasmuch as it was not a notice for the assessment year 1950-51 for which the assessment was sought to be reopened by the Income-tax Officer and the notice being an invalid notice, the assessment or reassessment made by the Income-tax Officer under section 34(1) (a) was bad. 5. Our answer to the question referred to us, therefore, is that the notice under section 34(1) (a) for the assessment year 1950-51 is not valid in law. So far as the notice for the assessment year 1951-52 is concerned, as we have pointed out above, the question does not survive in view of the fact that both the notices, the one headed under section 34(1) (a) and the other headed under section 22(2), mentioned the correct assessment year, namely, 1951-52, and, therefore, whichever way the matter be looked at, the notice under section 34(1) (a) was a valid notice. The commissioner will pay the costs of the reference to the assessee.
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1965 (9) TMI 56
... ... ... ... ..... because of the activities in which he thought Dr. Lohia might indulge? It could well be that upon the material before him the District Magistrate would have refrained from making an order under r. 30 solely upon the first ground. Or on the other hand he would have made the order solely upon that ground. His order, however, which is the only material on the basis of which we can properly consider the matter gives no indication that the District Magistrate would have been prepared to make it only upon the ground relating to public safety. In the circumstances I agree with my brethren Sarkar and Hidayatullah that the order of detention cannot be sustained. I have not referred to any decisions because they have already been dealt with fully in the judgments of my learned brethren. In the result, therefore, I allow the petition and direct that Dr. Lohia be get at liberty. ORDER In view of the majority opinion, we allow the Petition and order that the petitioner be set at liberty.
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1965 (9) TMI 55
... ... ... ... ..... tic. The correct method of computation, therefore, is the one laid down in Commissioner of Income-tax v. Shirinbai Kooka 1962 46 I.T.R. 86 (S.C.), where the Supreme Court has approvingly cited the observations of Lord Radcliffe in Sharkey's case 1956 29 I.T.R. 962. Our answer to question No. 1, therefore, is that the starch produced by the old industrial undertaking and used as raw material in the production of dextrose in the new industrial undertaking should be taken at the market price for the purpose of computing profits and gains of the new industrial undertaking for the purpose of section 15C of the Act. So far as question No. 2 is concerned, that is concluded by the judgment of this court in I.T.R. No. 13 of 1962 decided on August 18, 1964 Aruna Mills Ltd. v. Commissioner of Income-tax 1966 59 I.T.R. 507. In view of that decision, our answer to that question would be in the affirmative. The assessee-company will pay to the Commissioner the costs of this reference.
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1965 (9) TMI 54
... ... ... ... ..... could meet the case of the department that 17 is a reasonable basis. In fact, he had no opportunity of meeting the case of the department. We could cite a good many cases, but in a recent judgment of ours in R.C. No. 23/62 (Yaggina Veeraraghavalu v. Commissioner of Income-tax 1966 62 I.T.R. 528), dated February 5, 1965, we reviewed the case-law and held that Income-tax Officers should not only have a basis for determining the assessment, but they must give an opportunity to the assessee to rebut it. We had in that case referred to several decisions including the judgment of their Lordships of the Supreme Court in Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax 1954 26 I.T.R. 775; 1955 1 S.C.R. 941. We do not propose to go over the same ground again. The result is that the answer to the reference is in the negative and in favour of the assessee. Reference answered accordingly with costs. Advocate's fee ₹ 250. Reference answered in favour of the assessee.
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1965 (9) TMI 53
... ... ... ... ..... r passed by him under s. 76A. In the absence of any power of review, the Collector could not subsequently reconsider his previous decisions and hold that there were grounds for annulling or reversing the Mabalkari's order. The subsequent order dated February 17, 1959 re- opening the matter was illegal, ultra vires and without jurisdiction. The High Court ought to have quashed the order of the Collector dated February 17, 1959 on this ground." We are of the opinion that the same principle applies to the present case and the Director, Consolidation of Holdings had no power to review his previous order dated 3rd April, 1958 rejecting the application of Harbhajan Singh under s. 42 of the Act. It follows that the subsequent order of the Director, Consolidation of Holdings dated 29th August, 1958 allowing the application of Harbhajan Singh was ultra vires and illegal and was rightly quashed by the High Court. Accordingly we dismiss the appeal with costs. Appeal dismissed.
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1965 (9) TMI 52
... ... ... ... ..... h Courts while deducing the meaning of the word "manufacture" or "manufacturer" and the object with which Explanation 2 has been inserted in section 23A of the Act, we are of the view that the business carried on by the respondent-company of printing balance-sheets, profit and loss accounts, dividend warrants, pamphlets, share certificates, etc., required by the textile mills referred to in the statement of the case and other textile mills would be a business which consists wholly of manufacture and, therefore, clause (ii) of Explanation 2 to section 23A would apply in the present case. The Calcutta case in Sati Prasanna v. Md. Fazal had a different problem and cannot apply. In our view the construction placed upon clause (ii) of Explanation 2 by the Tribunal was correct. Our answer to the question, therefore, would be in the affirmative. The Commissioner will pay to the respondent-company the costs of this reference. Question answered in the affirmative.
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1965 (9) TMI 51
... ... ... ... ..... tner, one has to have resort to either section 13 or section 48 of the Partnership Act. The latter cannot apply in any event and one cannot resort to section 13, for resorting to section 13 must necessarily mean that the instrument is silent about the individual shares of the partners in losses and if the instrument is silent, clearly it does not comply with the condition in section 26A. That was why the learned judges of the Maharashtra High Court in In re Parekh Wadilal Jiwanbhai 1961 42 I.T.R. 266 held that in order to comply with section 26A, one cannot have resort to section 13 of the Partnership Act and call in aid that section. In this view, we are of the opinion that the relevant deed of partnership must specify not only the individual shares of the partners in profits but also in losses. Consequently, our answer to the question referred to us is in the negative. The petitioner will pay to the respondent the costs of this reference. Question answered in the negative.
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1965 (9) TMI 50
... ... ... ... ..... any tax. In that sense, as it seems to us, not prejudiced as he was by the order passed by the Income-tax Officer, failure to serve notice thereof did not deprive these orders of their validity. In our view, on a strict reading of the Act, it does not appear to contemplate service of notice in such cases. Nevertheless, we feel that it is desirable from many points of view that the revenue serves notice on assessees of such orders. It will not only tend to fairness to the assessee but also avoid deserving complaints that an order of which the assessee was not aware of forms the basis of proceedings under section 34. We accordingly answer the first question against the assessee, and, in view of this answer, we do not think it necessary to answer the second question, more especially because the orders under section 34 were made well within the four-year period of limitation. The revenue will be entitled to its costs. Counsel's fee ₹ 250. Question answered accordingly.
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1965 (9) TMI 49
Whether the petitioner is justified in challenging the validity of provision of of the Motor Vehicles Act, 1939?
Held that:- As a consequence of this conclusion, it follows that the petitioner is entitled to claim that the tax assessed against him in respect of his vehicles for the period between 26th March, 1962and the 9th September, 1964 at the enhanced rates is invalid, and that the taxing authorities concerned will have to levy the tax at the rates prescribed by the notification issued on the 30th April, 1959 under s. 3 of the principal Act as it originally stood.
It is true that this result sounds very anomalous, because for the period immedeately preceding the period in question, the tax is validly recoverable at the enhanced rates, whereas for the period in question, it has to be recovered at a lower Tate; but, for this anomaly, the defective drafting of S. 2 and s. 4 of the Act is entirely responsible. Appeal partly allowed.
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1965 (9) TMI 48
Whether the enhancement of the levy by notification dated March 31, 1961 insofar as it enhanced the levy from ₹ 40 to ₹ 70 per L.P. Gillon infringes any constitutional probibitions?
Whether the original duty alone would be sustained or also the enhanced duty which was introduced in 1961?
Held that:- The adaptation made the Act valid vis-a-vis the Government of India Act, 1935. When the Act was valid, the notification issued in 1937 was also valid. The Excise Acts, as adapted, continued to be law under the Government of India Act, 1935. The present Constitution has made no change either in the distribution of legislative power or the entries and has further said in Art. 372 that all existing laws continue to be of full force and effect. The imposition of countervailing duty at ₹ 40 per London proof gallon continued to be valid.
If the old duty it the old rate is sustainable there is no reason why the absence of production of foreign liquor in the State would make any difference to the enhancement of the duty to ₹ 70 per London proof gallon. So long as the Act is valid, and that is beyond doubt, the notification can be changed. The duty could always be made less and there is no reason why it could not be made more provided the imposition of duty on locally produced goods was not made lower. If production of foreign liquor is not a condition precedent to the validity of the Act because of historical reasons there is no bar to the validity of the notification which takes its force from the valid Act. Appeal dismissed.
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1965 (9) TMI 47
... ... ... ... ..... . Sales Tax Act, the entire turnover, if at all, would have escaped assessment and not part of the turnover. The statement in the notice, therefore, clearly pointed to the conclusion that it was issued in connection with the assessment under the Central Sales Tax Act. The notice, it is true, mentioned at the top that it was under section 21 of the U.P. Sales Tax Act, but it cannot be forgotten that, it is because of section 21 of that Act, the escaped turnover liable to be taxed under the Central Sales Tax Act can be got at. The decision in Kajori Mal Kalyan Mal s caseA.I.R. 1930 All. 209. cited on behalf of the petitioner has no bearing on the case. There, the notice under section 22(2) which afforded the assessee less time in filing his return than the statutory minimum of 30 days was illegal ab initio and consequently it was held that a subsequent extension of time would not cure the defect in the notice. The petition fails and is dismissed with costs. Petition dismissed.
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1965 (9) TMI 46
... ... ... ... ..... or review of an order made under Article 226 of the Constitution. Section 11 applied only to orders made in proceedings under the U. P. Agricultural Income-tax Act, 1948 the order in that case was not made under any such proceedings it was made in exercise of the power of the High Court under Article 226 of the Constitution therefore section 11 did not authorise the application made. It further held that the State Legislature had no competence to direct the High Court to review its order made under Article 226 of the Constitution nor it could require the High Court to make an order in a particular manner. These conclusions of the High Court were confirmed by the Supreme Court in the above-cited case. We do not think that this decision lends any support to Mr. Joshi s contention. For the reasons mentioned above, we do not think that the relief prayed for by the petitioner can be granted to him. Hence this petition fails and the same is dismissed. No costs. Petition dismissed.
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1965 (9) TMI 45
... ... ... ... ..... ry No. 18 of Schedule I and entry No. 24 of Part 11 of Schedule II, the natural import and connotation of the words dry fruits have been enlarged so as to include in the term dry fruits pind-khajur. Without this artificial inclusion pindkhajur would not have fallen in the term dry fruits as understood in its ordinary meaning. The amendment thus only reinforces the view that the natural meaning of the term dry fruits does not cover pind-khajur. If, as we think, pind-khajur is a preserved fruit and not a dry fruit, then sales of pind-khajur cannot be taxed either under entry No. 18 of Schedule I or entry No. 24 of Part II of Schedule II. The relevant entry for taxing sales of pind-khajur is clearly the residuary entry, namely, entry No. 1 of Part VI of Schedule II. 7.. Our answer to the question referred to us is that pind-khajur is preserved fruit. In the circumstances of the case, we leave the parties to bear their own costs of this reference. Reference answered accordingly.
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1965 (9) TMI 44
... ... ... ... ..... t proceeded to assess the petitioner according to best judgment at any time prior to passing the impugned order. (ii) the Assessing Authority (respondent No. 1) actually proceeded to assess petitioner on best judgment basis in respect of the turnover for the 4 quarters of 1959-60 for the first time on 22nd March, 1963. By then the assessment in respect of the first 3 quarters of that year was beyond 3 years from the end of the respective quarters and was therefore without jurisdiction. (iii) that the amendment of section 11(5) of the principal Act does not have retrospective effect and does not extend the period for assessment of sales or purchases effected during quarters from the end of which 3 years had expired before 10th January, 1963. In view of my above findings, I grant this writ petition and set aside the impugned order of assessment in respect of the first three quarters of the financial year 1959-60, but leave the parties to bear their own costs. Petition allowed.
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1965 (9) TMI 43
... ... ... ... ..... if we hold that all transactions which do not fall within section 8(1) fall within section 8(2), then it would mean that even inter-State sales to a consumer will be brought within the scope of section 8(2) and such an interpretation would be violative of the Constitution. We have not thought it necessary to go into that question because in the instant case, the petitioner before us sold goods to dealers and not to consumers. Therefore, it is unnecessary to consider whether section 8(2) includes transactions prohibited by the Constitution. If it does, about which we say nothing, to the extent it violates any constitutional mandate the Constitution prevails. For the reasons mentioned above, our answer to the question of law raised by Mr. Srinivasan is that the inter-State sales with which we are concerned in this case are liable to tax under section 6 read with section 8(2) of the Act. In the result, this petition fails and the same is dismissed. No costs. Petition dismissed.
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1965 (9) TMI 42
... ... ... ... ..... d by him was in order. Even though he had reason for the belief he could obtain further facts from the Sales Tax Officer in order to decide whether to proceed with the assessment or cancel the notice. He always had jurisdiction to cancel the notice on being satisfied that there was no escape and his seeking information about further facts from the other Sales Tax Officer cannot prove that he had not enough facts in his possession before the issue of the notice or that the issue of the notice was invalid. Really the fact that he sought further information shows his bona fides it shows that he acted fairly and was prepared to cancel the notice if further information revealed that there was no escape. We are concerned with the reason that existed before the issue of the notice and not with any reason that might come into existence subsequently for believing that there was no escape. In the result we see no force in this special appeal and dismiss it summarily. Appeal dismissed.
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1965 (9) TMI 41
... ... ... ... ..... ng to him were effected in the course of export outside India. That portion of the order of the Deputy Commissioner is now revised by the Commissioner. The Commissioner has directed the Commercial Tax Officer to assess the assessee on the basis that those transactions are liable to tax. If the assessee succeeds in his appeals before the Tribunal, the Tribunal will direct the Commercial Tax Officer to correct the assessment order on the basis of its decision. There is no room for any conflict between the order made by the Commissioner and the order that may be made by the Tribunal. The facts of this case, in our opinion, fall within the rule laid down by the Supreme Court in Commissioner of Income-tax, Bombay v. Amritlal Bhogilal and Co(1). For the reasons mentioned above, we do not think that any of the contentions advanced by Mr. Somasekharan can be accepted. Hence these appeals are dismissed with costs of the respondent (one set). Advocate s fee Rs. 100. Appeals dismissed.
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1965 (9) TMI 40
... ... ... ... ..... nut oil or any other oil in particular. If his registration certificate includes oils then it is open to him to purchase any oil. But if, on the other hand, it includes only coconut oil, then coconut oil can only be purchased. This also is a possible explanation. But we have not gone into the correct interpretation of the provision, as in our opinion on the facts established, it is not possible to say that the petitioner in S.T.R.P. Nos. 16 and 17 of 1965 had made deliberate false representations to his sellers. The petitioner is a manufacturer of shop. He was purchasing coconut oil as a raw material for his manufacture of soap. Evidently, he had purchased maroti oil as well as groundnut oil also for that purpose, possibly because of the enormous increase in the price of coconut oil. Hence it cannot be said that he had a guilty mind. For the reasons mentioned above, S. T. R. P. Nos. 16 and 17 of 1965 are allowed and the orders impugned quashed. No costs. Ordered accordingly.
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