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1976 (6) TMI 24
Rejection Of Accounts ... ... ... ... ..... s not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guess-work in a best judgment assessment, it shall not be a wild one, but shall have a reasonable nexus to the available material and the circumstances of each case. As noted earlier, in the facts and circumstances of the instant case, it is not possible to discover any basis rational or otherwise from the order of the Tribunal and this order is apparently arbitrary. In view of the law as laid down by the Supreme Court and in the facts and circumstances of the case, we answer the question referred to us in the affirmative and in favour of the assessee. We make it clear that the matter before the Tribunal has now to be disposed of in accordance with law as has been stated above and on the basis and in consideration of the entire material on record. In the facts and circumstances of the case, there will be no order as to costs. DEB J.--I agree.
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1976 (6) TMI 23
Question Of Law, Retrospective Amendment, Wealth Tax ... ... ... ... ..... are not circumscribed except to the extent mentioned in that section itself. The same point was emphasised by repeating it later in the judgment. As I have endeavoured to show by a contrast between the provisions of section 33A and section 33B of the Act, the powers under section 33B could be exercised even where an appeal is pending from the order of the Income-tax Officer and the powers given under section 33B could be exercised on the conditions mentioned in that section being fulfilled and it is not permissible for the court to introduce into the section other conditions like those which are mentioned in section 33A. In the light of the above discussions, we answer the question referred to us in the affirmative, that is, in favour of the department and against the assessee. We direct the parties to bear their respective costs. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be sent to the Appellate Tribunal, Cochin Bench.
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1976 (6) TMI 22
Business Assets ... ... ... ... ..... d on it in its order. The doubt about the age of the 3rd partner is only in the realm of speculation. And the speculation by the Tribunal of the probability or otherwise of persons entering into a partnership on terms which appeared to the Tribunal to be strange is also not justified and could not be the basis of any conclusion. There was thus no material before the Tribunal in support of the conclusion that it reached, that in reality there was no partnership in existence. Reliance on the decision of the Supreme Court in M. P. Davis v. Commissioner of Agricultural Income-tax 1959 35 ITR 803 (SC), we think, was misplaced. In the light of the above, we answer the question referred to us in the negative, that is, in favour of the assessee and against the department. We direct the parties to bear their costs. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be forwarded to the Agricultural Income-tax Appellate Tribunal, Trivandrum.
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1976 (6) TMI 21
Question Of Law ... ... ... ... ..... ion of which was unnecessary for disposing of the appeal and the fact that that contention had not been considered, would not give rise to a question of law which can be said to arise from the order of the Tribunal. On this aspect no decision of any court had been placed before us. We are of the view that a question of law can be said to arise from an order of the Tribunal only when a consideration of that question was necessary for disposing of the appeal before the Tribunal. Otherwise, any question unnecessary for the decision of a case which the Tribunal rightly refrained from taking into consideration can be said to arise from the order of the Tribunal. The question referred to us does not arise from the order of the Tribunal. We, accordingly, decline to answer the question. We direct the parties to bear their respective costs. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be sent to the Appellate Tribunal, Cochin Bench.
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1976 (6) TMI 20
Total Income ... ... ... ... ..... would still count for the computation of the total income for the purpose of determining the rate in terms of section 16(1)(a). This being the position in law, the foundation of the claim laid by the assessee, Manmatha Nath Sen, and, pursued by his successor, namely, the present appellant, must fail. On the conclusions as above, the appeal fails and is dismissed. There will be no order as to costs. M. N. Roy J.---I agree. By consent we further direct that the impugned assessments being upheld by the judgment and order passed this day by this court the respondents will be at liberty to realise the income-tax assessed on Manmatha Nath Sen but in doing so they would adjust all amounts already realised for the relevant period from the said Manmatha Nath Sen by way of advance tax, if any, and all other payments made towards discharge of such income-tax liability. If on such adjustment any amount be found refundable, the respondents will refund the said amount as early as possible.
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1976 (6) TMI 19
Business Expenditure, Market Value ... ... ... ... ..... he accounting period. The liability, if at all, was wholly contingent. The transfer of gratuity reserve from the assessee-company to the new company did not also arise in the course of the business or for the purpose of carrying on the business, but springs from the transfer of the business. Therefore, it cannot be said that the expenditure was laid out or expended wholly or exclusively for the purpose of the business or it was a properly debitable item in its profit and loss account as a revenue outgoing. Consequently, in the light of the decision of the Supreme Court as well as this court referred to above, it follows that the conclusion of the Tribunal that the sum of Rs. 18,931 being the gratuity transferred by the assessee-bank to the Karur Vysya Bank was a deductible item of expenditure is erroneous in law. Hence, we answer the second question in the negative and against the assessee. Since the parties have succeeded and lost in part, there will be no order as to costs.
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1976 (6) TMI 18
Business Assets ... ... ... ... ..... ompleted by any symbolic delivery and the transactions amounted to mere book entries. The facts before the Delhi High Court were different from the facts before us. Section 130 of the Transfer of Property Act, it appears, was not complied with. In the case of Sukhlal Sheo Narain 1973 89 ITR 157 (Punj), the gift was by the donor and was recorded only in his own books of account. There was no acceptance as in the case before us. In conclusion, we note that if it is held that there was no valid gift on the 28th March, 1957, that is on the date of the entries, and, consequently, whatever was done by the parties on that date was infructuous, then it cannot be held that subsequently when the money was transferred by further entries in the same books it resulted in a valid gift. For the reasons above we answer the question referred to us in the affirmative and in favour of the assessee. In the facts and circumstances of the case, there will be no order as to costs. DEB J.---I agree.
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1976 (6) TMI 17
1961 Act, Actual Cost, Capital Expenditure, Change Of Law, Expenditure Incurred ... ... ... ... ..... ll as to assets which came into existence subsequently. But, from the Explanation alone, no inference can be drawn that the legislature intended to apply the definition of the term actual cost occurring in section 43(1) only to assets coming into existence on or after April 1, 1961. In these circumstances, both the reasons given by the Tribunal in support of its conclusion in this behalf are not really relevant and, therefore, there is no escape from the conclusion flowing from the actual language used in section 43(6)(b) read with section 43(1) that the actual cost for the purpose of arriving at the written down value within the scope of section 43(6)(b) for the assessment years 1962-63 onwards will have to be only as defined in section 43(1) of the Income-tax Act, 1961. For these reasons, we answer the question in the negative and against the assessee. Having regard to the fact that there is no authority covering the point in issue, we are not making any order as to costs.
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1976 (6) TMI 16
Previous Year ... ... ... ... ..... wed and once it is found that it cannot be allowed in the relevant previous year, in the year of assessment relevant for the previous year in which the machinery or plant was installed or the ship was acquired, it cannot be allowed to be carried forward in any subsequent year. We are in respectful agreement with the above observations of the Gujarat High Court regarding section 33(1) and section 34(3)(a) of the Act. In the circumstances we find that the learned Tribunal erred in law in allowing the development rebate to the extent of Rs. 15,913 for the assessment year 1963-64, though the assessee admittedly installed the machinery in question in 1961 and made no claim of development rebate nor did it create any reserve fund in the assessment year 1962-63, as required under the provisions of section 34(3)(a) of the Act. We, therefore, answer the question of law referred in the negative and against the assessee. The reference is answered accordingly. BAHARUL ISLAM J.--I agree.
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1976 (6) TMI 15
Question Of Fact ... ... ... ... ..... or not was within the province of the Tribunal. Unless its conclusion is held to be perverse or is not supported by any evidence or is based on irrelevant evidence, the High Court had no jurisdiction to interfere with its findings. In the instant case, we find that the Tribunal has examined all aspects of the matter and has come to hold that the assessee has failed to establish that his wife had assets sufficient to provide the consideration money for the acquisition. Merely on the technical ground that the revenue has not established the nature of the property by leading evidence, we do not think a different view should be taken and the fact found by the Tribunal should be reversed. The Tribunal, as a final forum of fact, has come, in our view, to the correct conclusion on the materials placed before it and a finding of fact has been reached. No question of law does emerge on the basis of which the conclusion can be disturbed. We make no direction for costs. DAS J.-I agree.
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1976 (6) TMI 14
Attributable To ... ... ... ... ..... 1, proviso 3, where the accounting period and the chargeable accounting period do not synchronise wholly but only a part of the accounting year is included in the chargeable accounting period. This decision of the Division Bench is, therefore, of no assistance as it is not applicable to the facts of the case. In the result, our answers to the questions referred to us are as under Question No. 1 Not pressed. Question No. 2 On the facts and in the circumstances of the case, in the four C. A. Ps. ended June 30, 1942, June 30, 1943, June 30, 1944, and June 30, 1945, respectively, the managing agency commission to be included in the excess profits tax assessment is the amount as determined by the Appellate Assistant Commissioner. Question No. 3 Answered in the negative. The Tribunal was not justified in holding that the excess profits tax assessment made on the assessee-firm for the C.A.P. ended March 31, 1946, was not valid in law. The assessee shall pay the costs of the revenue.
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1976 (6) TMI 13
Levy Of Penalty, Penalty For Default ... ... ... ... ..... s reference, to indicate what should have been the starting point as a fact or what the Income-tax Officer should have chosen. It was for him to have given a definite finding regarding the starting point in respect of the default committed this was a condition precedent to his passing a valid order of penalty arising out of such default. Regarding the second submission, reliance was placed on the decision of a Division Bench of this court in Income-tax Reference No. 17 of 1974 (Commissioner of Income-tax v. Assam Travels Shipping Service 1977 110 ITR 359 (Gauhati)) to which one of us, Baharul Islam J., was a party. One of the points decided in that case was that if the amount of penalty imposed was lower than what had to be legally imposed, it would be invalid as being not according to law. Even on this ground the penalty imposed was not valid. The answer to this question referred, is, therefore, in the affirmative and against the revenue. There will be no order as to costs.
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1976 (6) TMI 12
Registered Firm ... ... ... ... ..... the Appellate Assistant Commissioner cancelling the penalty orders of the Income-tax Officer on the ground that the penalty orders were illegal and not according to law. There is no doubt, as discussed hereinabove, that the penalty orders passed by the Income-tax Officer were not in accordance with law and on that ground the penalty orders were not sustainable and the Appellate Assistant Commissioner, apart from other grounds, set aside the penalty orders on that ground also. That being so and in view of the facts and circumstances of the case, the Tribunal cannot be said to be unjustified in upholding the order of the Appellate Assistant Commissioner in setting aside the orders of the Income-tax Officer on the ground that the penalty orders passed by the Income-tax Officer were illegal and not according to law. In the result, the question of law referred is answered in the affirmative and against the department. There will be no order as to costs. BAHARUL ISLAM J.--I agree.
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1976 (6) TMI 11
Assessment Year, Cash Credits ... ... ... ... ..... he materials on record. In the instant case, the department relied on the letter of the assessee dated 29th January, 1969, as an admission by the assessee to the effect that the amounts in question were its income during the relevant previous year and that in the said letter the assessee admitted concealment of the income. Both these assumptions have been correctly found to be wrong by the Tribunal as discussed hereinabove. That being so, the Tribunal correctly found that the department failed to establish that the amounts in question represented the income of the assessee for the relevant assessment year and that there was concealment of such income. In the result, we find that the Tribunal was justified in cancelling the order of penalty under section 271(1)(c) of the Act passed by the Inspecting Assistant Commissioner. We, therefore, answer the question referred in the affirmative and against the department. The reference is answered accordingly. BHARUL ISLAM J.--I agree.
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1976 (6) TMI 10
... ... ... ... ..... ust succeed. It is, accordingly, directed that a writ in the nature of certiorari issue quashing the impugned order of the respondent No. 1 dated January 7, 1965 (annexure C to the writ petition) only in so far as he has taken into consideration the 1/9th share of the wife of the petitioner for the purpose of aggregation under section 34(1)(c) of the Act. Further, it is directed that a writ in the nature of mandamus issue commanding the respondent No. 1 to take into consideration only 1/9th 1/9ths 2/9th shares of Satyanarayan and his son for the purpose of aggregation and reassess the estate duty accordingly, and refund such sum to the petitioner as may be found due to him on such reassessment. The rule is made absolute to the extent indicated above. There will be no order as to costs. As prayed for on behalf of the opposite parties, let the operation of this judgment remain stayed for a period of four weeks from date so as to enable them to prefer an appeal against the same.
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1976 (6) TMI 9
Partner In Firm, Property Deemed To Pass, Question Of Law ... ... ... ... ..... ness was having a goodwill. In fairness to the learned counsel for the Controller of Estate Duty, we must point out that he did not support the theory of the Assistant Controller that every business has got a goodwill. Under these circumstances, it is clear that whether a particular business has a goodwill or not has to be decided with reference to the facts and circumstances relevant and available in respect of that business and once the Tribunal has, after taking into account the relevant facts and circumstances, come to the conclusion that the business of the firm in the present case did not have a goodwill, it cannot be contended that any question of law, would arise out of such conclusion of the Tribunal. Under these circumstances, we answer the second question also in the affirmative and in favour of the accountable person. The accountable person is entitled to her costs in this reference from the Controller of Estate Duty, Madras, and counsel s fee is fixed at Rs. 500.
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1976 (6) TMI 8
Capital Receipt, Income When Accrues, Revenue Receipt ... ... ... ... ..... hs would fall in the financial year 1964-65 (assessment year 1965-66). So, Rs. 30,000 under the first two agreements would be included in the assessment year 1965-66. Along with this the sum that was payable in March, 1965, would be added. Thus, the amount of Rs. 42,000 would fall in the assessment year 1965-66. This would be the correct position about the receipt of the amounts mentioned hereinabove in view of the fact that the assessee cannot be legally said to have kept his accounts in the mercantile system. In the circumstances, we hold that the Tribunal was wrong in holding that the amounts receivable under the agreements dated October 1, 1963, and September 30, 1963, accrued to the assessee on the dates of contracts and not on the dates when the instalments became payable under the agreements. The second question of law is thus answered in the negative and against the department. The reference is answered accordingly. We make no order as to costs. D. PATHAK J.-I agree.
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1976 (6) TMI 7
Charitable Purpose ... ... ... ... ..... n the light of the pronouncement of the Supreme Court in Indian Chamber of Commerce v. Commissioner of Income-tax 1975 101 ITR 796. We have to further mention that it was conceded before us that if the income would fall under section 11 of the Act, no further question about that income falling under section 28(iii) of the Act would arise. Question. No. 2 referred to us cannot be answered in the abstract. It can be answered in favour of the assessee if it is found that the assessee is entitled to exemption under section 11 by stating that notwithstanding section 28(iii) the income is exempted. If, on the other hand, the income is not exempted under section 11, no question of exemption arises and it will fall under section 28(iii). We direct the Appellate Tribunal to deal with the appeals in the manner indicated above. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.
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1976 (6) TMI 6
Computation Of Capital, General Reserve ... ... ... ... ..... on that the commission paid should be apportioned. Before the authorities below there appears to have been some confusion as to the services to be rendered . From the clauses of the agreement, it does not appear to us that under such terms any particular service was to be performed or rendered by the sole selling agents. If the sole selling agent in fact took the trouble of negotiating or effecting further sales of the assessee s products only then it would be entitled to further commission. The commission which was payable to the agent on the other sales appears to be validly referable to the other consideration, namely, undertaking responsibility and standing guarantee for other customers which has been upheld by the Supreme Court in Aluminium Corporation s case 1972 86 ITR 11. For the reasons given above, we answer the question referred to us in the negative and in favour of the assessee. In the facts and circumstances there will be no order as to costs. DEB J.---I agree.
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1976 (6) TMI 5
Acquisition Proceedings, Assessment Year, High Court, Immovable Property, Market Value, Movable Property, Reason To Believe
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