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Case Laws
Showing 41 to 60 of 117 Records
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1977 (4) TMI 123
Winding up – Statement of affairs to be made to official liquidator, Liability for fraudulent conduct of business
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1977 (4) TMI 122
Company when deemed unable to pay its debts ... ... ... ... ..... ly and illegally exercised by the company. It cannot be said that the Registrar has no opportunity to verify the position by having an inspection of the records of the company. As a matter of fact, during the pendency of the petition, the Registrar could have availed of that opportunity and made criticism good. In the absence of convincing material, therefore, it would not be possible for me to agree with this criticism of the learned advocate for the Registrar that the profits were manipulated. If the company had power to forfeit subscription on a default being committed by the subscriber or to forfeit prizes of benefit in case of default by the subscriber, I do not think that it can be presumed from that mere existence of power that the same had been exercised mala fide and/or illegally. This criticism of the learned advocate for the Registrar is, therefore, not justified. In that view of the matter, therefore, the result is that this petition fails and should be dismissed.
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1977 (4) TMI 101
Circumstances in which a company may be wound up, Application of Act no. 7 of 1913 ... ... ... ... ..... subject to the conditions specified in the notification. All this clearly indicates that the management of the industrial undertaking which is the company (being a company as defined in the Indian Companies Act) has not been taken over by the Central Government, and, therefore, sub-section (1) of section 18E of the Regulation Act has no application to the case. It is only a part of the undertaking, that is, only one of the factories belonging to the company, that has been taken over. For the foregoing reasons we have no hesitation in holding that the provisions of clause (c) of sub-section (1) of section 18E are not attracted in this case and the winding-up proceedings can continue without obtaining the consent of the Central Government required under that provision. The winding-up petition will now go back to the learned company judge for being dealt with further and decided on merits in accordance with law. . Harbans Lal, J. mdash I agree. Surinder Singh, J. mdash So do I.
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1977 (4) TMI 100
Power to investigate into affairs of a company-in-liquidation ... ... ... ... ..... pany, or (2) all application is filed by the liquidator in the case of a company which is being wound up. If that is so, then certainly it cannot be said that as soon as an application for winding up is filed it becomes a case of a company being wound up. It clearly indicates, in my view, that the process starts after the order for winding up is made and not after the filing of an application for winding up. Therefore, one cannot say that a company is being wound up as soon as an application is filed for its winding up and before any order is passed for winding up of the company. On a consideration of the provisions of law, particularly the language appearing in section 15A of the Act with reference to the relevant provisions of the Companies Act, I hold that this is hot a case where the company is being wound up and as such the present application is not maintainable. In the result, the application fails and the same is hereby rejected. I, however, pass no order as to costs.
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1977 (4) TMI 86
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... ... ..... om claiming the sum as a deduction either under s. 10(1) or under s. 10(2) (xi) of the IT Act, 1922 corresponding to s. 28 or s. 37 of the IT Act, 1961. The learned departmental representative also contended that the liability having not been paid could not be deducted. The quotation which we have reproduced earlier from the decision of the Supreme Court in Metal Box Co. rsquo s (3) case is a complete answer to this objection of the learned departmental representative. Therein the Supreme Court held that it is not as if a deduction for accrued liability is permissible only in case of amounts actually expended or paid. Deduction is permissible even in the case of a liability which is accrued and which is due. In the above circumstances we see no merit in the Revenue rsquo s contention that the AAC erred in ordering the deduction of the accrued liability of Rs.1,99,268. We would accordingly dismiss the Revenue rsquo s appeal. 7. In the result, the appeal fails and is dismissed.
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1977 (4) TMI 85
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... ... ..... the date of the presentation of the cheque would be the date of payment. Hence CIT was not justified in directing the ITO to withdraw the interest of Rs. 2,092 granted this year. The order of the Tribunal in Jawahar Engineers (P) Ltd. Poona vs. ITO, Company. Cir. I, Poona (ITA No. 850 of 1974-75) on which reliance was placed by the Department has no application to the fact of the instant case. In that case the assessee filed revised estimated income on 15th Dec., 1973. Hence CIT had held in his order under s. 263 that the revised estimate had been filed late and the payment of the tax made pursuant to such an invalid estimate was not the payment of advance tax and the ITO ought not have granted interest to the assessee under s. 214. The order of the CIT was upheld by the Tribunal. The point at issue in that appeal is entirely different. 4. Accordingly we cancel the order of the CIT dt. 11th March, 1976 under s. 263 of the IT Act, 1961. 5. In the result the appeal is allowed.
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1977 (4) TMI 80
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... ... ..... the AAC. The learned departmental representative has submitted that when the amount of Rs. 18,000 has been added in the assessment order, the Tribunal cannot hold at this stage that this was not includible in the total income for the asst. yr. 1965-66. Of course, as regards the assessment the assessment order is final. However, for the purpose of imposition of penalty for concealment of income under s.271(1)(c) of the said Act, we will have to see whether the addition made was a legal one. We hold in view of our discussions above that the addition of Rs. 18,000 was not a valid and legal one and so there can be no question of concealment of this income of Rs. 18,000. We therefore, hold that for this addition of Rs. 18,000 also no penalty can be levied. 20. In view of our discussions above we hold that the penalty order of the IAC cannot be sustained under these circumstances. We, therefore, cancel the penalty order of the IAC. 21. In the result, the appeal is allowed in full.
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1977 (4) TMI 77
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... ... ..... e find no reason to interfere with the penalty of Rs. 1,216 sustained by the appellant authority. In the result we sustain only an addition of Rs. 2,16,272.00 in respect of groundnut kernel taxable at 1-1/2 and the penalty of Rs. 1,216 deleting the rest of turnover disputed. Subject to the above modifications, the appeal stands dismissed. 11. As regards the enhancement petition, the claim of the Revenue is found to be erroneous. The actual suppression is only in respect of 331 bags valued at Rs. 54,068.00. We have also confirmed the penalty relatable to this suppressed turnover as sustained by the learned AAC. The Revenue cannot press for levy of penalty over and above the amount levied even by the AO. As pointed out in MTA 128/76 since the actual suppression in groundnut kernel is taken as only Rs. 54,068.00, the penalty is attracted under s. 12(3) of the Act only with reference to this amount. Hence there is no merit in the enhancement petition. It is accordingly dismissed.
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1977 (4) TMI 75
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... ... ..... on 31st March, 1973. the payment would be allowable. The business in the present case is continued and not closed so that the decision in 65 ITR 643 will not apply. Alternative, as a lump sum payment in order to secure certain advantages with regard to future payment of salaries referred to above or as alternation in the conditions of service of the employees vide the British India Tobacco Co. rsquo s case, also the payment would be a proper deduction. We have, therefore, no hesitation in holding that the AAC has correctly allowed the above claims as payment on account of commercial expediency for the purpose of business. 8. With regard to the sum of Rs. 6,309 the Payment of Gratuity Act does apply for the assessment years after 1973-74. We see nothing wrong in the AAC having directed the ITO to see whether the conditions in s. 40A(7)(b)(ii) are applicable or not. On this point also we see no reason to interfere with the order of the AAC. The departmental appeal is dismissed.
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1977 (4) TMI 74
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... ... ..... and the door the number was renumbered as 41, Paul Pillai Street. The first phase of remodelling was done in the ground floor. The second phase of remodelling was done to suit the requirements of the Bank of Baroda, which became a tenant of the appellant. It appears that in order to suit the requirements of the Bank of Baroda, remodelling was mainly undertaken in respect of this portion. Having regard to the expenditure involved in the remodelling work, the type of materials used and the fact that the work was carried out under the personal supervision of the appellant without entrusting the same to any contractor and the possibilities of the remodelling work extending over a period of two years, we are inclinded to hold that an addition of Rs. 5,000 will meet the ends of justice and accordingly, the addition is reduced from Rs. 19,000 to Rs. 5,000. 6. In the result, the appeal is allowed in part to the extent indicated above and the assessment should be revised accordingly.
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1977 (4) TMI 73
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... ... ..... er, Shri Shanmugham has chosen on deposit the sum of Rs. 10,000 in the appellant rsquo s firm. Shri Shanmugham rsquo s motive for depositing Rs. 10,000 with the appellant firm cannot be lightly brushed aside as not worthy of credence. The learned departmental representative contended that no interest has been received by Shri Shanmugham on the deposit made with the appellant firm. From the extracts of accounts, it is seen that a sum of Rs. 1,200 was credited towards interest in Shri Shanmugham rsquo s account for asst. yr. 1975-76 and a similar sum of Rs. 1,200 was credited towards interest for asst. yr. 1976-77. On the materials placed before us, we are satisfied that the appellant has satisfactorily discharged the onus of proving the truth and genuineness of the credit of Rs. 10,000 standing in the name of Shri Shanmugham and the addition made cannot be sustained. Accordingly, the addition of Rs. 10,000 made is ordered to be deleted. 5. In the result, the appeal is allowed.
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1977 (4) TMI 69
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... ... ..... ture of the business have to be ascertained, for even according to the facts as set out by the department there was clearly manufacturing. The only point which survives and on which the learned departmental representative placed stress was that even if there was manufacturing the same was not done by the assessee himself in his factory. We do not find anything in the aforesaid provision which requires that the entire manufacturing should be done by the assessee in his own factory. Even if the assessee gets the goods manufactured that would amount to having industrial undertaking since it would be an undertaking engaged in the manufacture or processing of goods. The value of the assets of such undertaking has to be determined in accordance with R. 2H r/w s. 5(1)(xxxi). To this extent, the assessee will be entitled to the exemption which has to be worked out by the Wealth-tax Officer. We would, therefore, uphold the findings of the AAC and dismiss the appeals of the department.
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1977 (4) TMI 68
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... ... ..... e that under the terms of the trust or the rules governing the institution any part of its income or any part of its property ensures directly or indirectly for the benefit of the author of the trust. We have reproduced above the exact terms on which the deposit is kept with the IMMC. The rate of interest derived does not seem to be low or even on a most-favoured basis. To the IMMC the lending has to be treated clearly as at arms length and no special benefit can be said to ensure directly or indirectly to the author of the trust. This contention of the Department is rejected. 37. Summarising the position, we hold that the assessee-trust satisfies the conditions of a charitable purpose as laid down in s. 2(15) for the years under appeal the trust must be regarded as having applied 75 per cent of its income or more for charitable purposes and the claim under s.11 is not defeated by the application of s. 13 of the Act. The assessee lsquo s appeals for all the years are allowed.
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1977 (4) TMI 64
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... ... ..... lty proceedings. Under the circumstances, the impugned order of penalty could not be sustained, because the assessee was denied reasonable opportunity of being heard. Even on merit, the order of penalty cannot be sustained. The assessee filed the return on 28th Nov., 1974 showing total income of Rs. 90,130. Estimate under s. 212(3A) of the Act was filed at Rs. 60,000 on which tax of Rs. 4,554 was paid. Total income was assessed at Rs. 92,205. According to the assessee, when the estimate was filed it never knew or had reason to believe that estimate so filed was untrue. The estimate filed by the assessee was bonafide. We may also point out that there is no material to prove that the assessee filed the estimate knowing it to be untrue or there were reasons to believe that the assessee knew that the estimate was untrue. Thus, from this point of view also, no penalty could be sustained. 11. In the result, both the appeals are allowed. The impugned orders of penalty are cancelled.
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1977 (4) TMI 63
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... ... ..... arch s. 35 (1)(ii) does not say that such scientific research should be done for the assessee. In respect of expenditure on scientific research the following deductions shall be allowed. Any sum paid to a scientific research association which has as its object the undertaking as scientific research or to a university, college or other institution to be used for scientific research Provided that such association, university, college or institution is for the time being approved for the purpose of this clause by the prescribed authority. The aforesaid provisions do not say that such scientific research should be done for the assessee only. It is common ground that C.S.I.R. is a prescribed authority. The research done by the C.S. I.R. in the present case is definitely a scientific research. Under the circumstances, the expenses incurred by the assessee are also allowable under s. 35(1) (ii) of the Act. 10. In the result the appeal is dismissed and the cross-objection is allowed.
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1977 (4) TMI 62
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... ... ..... der s. 212(3A).If he is not such a person, apparently, he will not be hit by the provisions of s. 212(3A).As in the present case, in our opinion, the Official Liquidator estimated that his current income which would be subject, to tax would be nil, as according to him his entire income was exempt from tax itself, there was no obligation on him to file the estimate under s. 212(3A) and, therefore, no interest could have been charged from him under the aforesaid sub-section. Inasmuch as this is precisely the reason given by the ITO at the foot of his assessment order, there was apparently no order in it. In so far as the learned CIT held to contrary, he had, in our opinion, mis-directed himself in law, and, therefore, his order deserves to be qushed. Ground No.2 was not pressed before us. Even on merits, it is not sustainable for the letter referred to by the Official Liquidator reached the Commissioner two days after the date of hearing. 26. In the result, the appeal succeeds.
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1977 (4) TMI 61
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... ... ..... sed in the hands of the parent. Sec. 40(b) bass the allowance of only such interest as is paid to the partner. It does not bar the allowance of interest paid to a minor child of a partner even though the income of the such a minor is to be clubbed in the hands of the assessee under s. 64. The income of the minor neither ceases to be his income-tax for it is realised not from him but from his father. There was, therefore, no justification for making the aforesaid addition in the case of the firm as the firm paid no interest to the partner. 9. For the purpose of disposal of this appeal, it is not necessary for us to adjudicate upon the question as to whether or not the gifts in question were of cross gifts. The averments of the ITO and the AAC on this point are not the findings which were necessary for the disposal of this case. Those observations, have, therefore, no binding force and the matter is still res-integra between the parties. 10. In the result the appeal is allowed.
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1977 (4) TMI 60
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... ... ..... ation of the cost of production of the picture, it is impossible to agree with the finding of the Inspecting Assistant Commissioner that there was concealment of income. We are, therefore, of the opinion that the assessee has not been proved to be guilty of concealment and the imposition of penalty was, therefore, not warranted by the circumstances of the case. 6. Even on technicalities, there is an inherent infirmity which invalidates the order of penalty. The penalty proceedings having been initiated for furnishing inaccurate particulars, the imposition of penalty for concealment of income cannot be sustained in view of the recent decision of the Gauhati High Court in the case of Padma Ram Bharali (4). The other objections raised by the assessee are, however, debatable since there are authorities both pro and con and we find it unnecessary to go into them. 7. In the circumstances, we cancel the penalty imposed by the Inspecting Assistant Commissioner. The appeal is allowed.
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1977 (4) TMI 59
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... ... ..... l was justified in not remanding the case to the AAC and, therefore, on the admitted facts of the case the Tribunal could not be said to be unjustified in cancelling the order. It is thus clear that the question whether the AAC could vary the quantum of penalty where there is a mistake in calculation was not the subject matter of either of these decisions. However, at the time of making this order, we found a direct decision of the Orissa High Court where the issue has been decided in favour of the revenue in the case of Linga Raj Panda and Co.(5) 17. We are, therefore, satisfied that the direction given by the AAC was wholly within his powers and the order of the Income-tax Officer cannot be said to be invalid merely because the quantum of penalty was erroneously calculated. 18. In the result, we direct the Income-tax Officer to recompute the penalty for the delay of eight months and refund the excess of penalty if any, paid by the assessee. 19. The appeal is partly allowed.
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1977 (4) TMI 58
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... ... ..... ny connection. I am, therefore, of opinion that the addition of Rs. 15,000 either in the present assessment year or in the present assessee s case cannot be upheld. 6. The Deplt. Resp. stated that these contentions have not been adjudicated either by the ITO or the AAC. But these are not new grounds or new facts. All these facts have been stated by the assessee even at the earlier stages. The assessee s contention all along has been that the addition of Rs. 15,000 in his assessment for 1968-69 cannot be made. These are merely arguments of law to reinforce the above contention. In my opinion, it is open to the assessee to raise these grounds which are purely grounds of law to support the submission and the ground made all along that the addition should be deleted from the assessment. 7. For the reasons above mentioned, I am of opinion that the order of the AAC should be confirmed. I direct accordingly. The result is that the appeal is dismissed. The cross objection is allowed.
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