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Showing 101 to 120 of 160 Records
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1979 (8) TMI 60 - PUNJAB AND HARYANA HIGH COURT
Capital Or Revenue Expenditure, Cinema Theatre, Enduring Advantage ... ... ... ... ..... an existing business asset, it would be capital expenditure whereas if, on the other hand, the expenditure, although for the purpose of acquiring an asset or advantage, is for running of the business or for working out that asset with a view to produce profit, it would be revenue expenditure. We are inclined to agree with the tests laid down by the Andhra Pradesh High Court and keeping the same in view, on the facts and in the circumstances of the present case and on the findings arrived at by the Tribunal, as reproduced above, we are of the opinion that the Tribunal was right in holding that as the assessee did not derive any benefit of enduring nature, the amount of Rs. 24,000 spent on the cost of replacement of false ceiling was an expenditure of revenue nature. For the reasons given above, the answer to the question is to be in the affirmative, i.e., in favour of the assessee and against the revenue. We answer accordingly. The revenue will pay the costs of this petition.
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1979 (8) TMI 59 - RAJASTHAN HIGH COURT
Assessment Proceedings, Consistent Practice Of Accounting, Reassessment Proceedings ... ... ... ... ..... to us that if the ITO had taken note of the fact during the assessment proceedings for the relevant assessment year that the system adopted by the assessee of showing the dividend income on receipt basis, was not correct, the income would not have escaped assessment. Thus, the present is a case where the escapement has been due to circumstances other than the alleged omission or failure on the part of the assessee to disclose the material facts. Put in other words, in the facts and circumstances, the escapement of income cannot be said to be due to failure or omission on the part of the assessee to return the dividend income in question for the relevant assessment year. In this view of the matter, we answer the question in the affirmative and hold that, in the facts and circumstances of the case, the provision of s. 34(1)(a) of the Indian I.T. Act, 1922, were rightly held to be not attracted to the case. The answer is returned accordingly. There will be no order as to costs.
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1979 (8) TMI 58 - ANDHRA PRADESH HIGH COURT
Different Businesses, Two Firms With Same Partners ... ... ... ... ..... lls was not cancelled and the same was allowed to continue as a registered firm. The two firms had been constituted under two separate deeds of partnership. There was no inter-lacing or inter-mixing between the two firms. The Tribunal found that there was no justification for including the profit of Rs. 5,500 belonging to M/s. Sri Lakshmi Oil and Flour Mills in the income of the assessee-firm and consequently deleted the same. Applying the aforesaid principles to the facts and circumstances found by the Tribunal, we must hold that the two firms in the instant case are not, in reality, one firm but two different legal entities for the purpose of assessment. For all the reasons stated above, our answer is in the affirmative and in favour of the assessee holding that M/s. G. Parthasarathy Naidu and Sons and M/s. Sri Lakshmi Oil and Flour Mills can be treated as two separate firms and distinct and separate entities for the purpose of the Act. There shall be no order as to costs.
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1979 (8) TMI 57 - PUNJAB AND HARYANA HIGH COURT
Appeal To AAC, Firm Registration ... ... ... ... ..... g to entertain the assessee s belated application for registration under the proviso to s. 184(4) tantamounted to an order under s. 18 5(1)(b) and, thus, an appeal was competent against such an order under s. 246(j) of the Act. In the case of CIT v. Dineshchandra Industries 1975 100 ITR 660 (Guj), the provisions of the earlier Act of 1922 and the provisions of the present Act of 1961 have been considered and it has been observed that there were no justifying reasons for Parliament to depart materially from the scheme which was available under the Act of 1922 and when some doubts have been raised as to whether appeals are competent against orders under s. 184(7) or s. 185(2) or (3), Parliament has by clarificatory legislation made these orders appealable. In this view of the matter, the answer to the question is in the affirmative, i.e., against the revenue and in favour of the assessee. The department will pay the costs of this reference. BHOPINDER SINGH DHILLON J.-- I agree.
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1979 (8) TMI 56 - PUNJAB AND HARYANA HIGH COURT
Business Expenditure, Entertainment Expenditure, Income Tax Act ... ... ... ... ..... h an amount incurred on lunch, etc., was either customary or was on account of any business obligation, particularly keeping in view the nature of business carried on by the assessee. From the order of the ITO, we find that some amount was incurred for expenses on one lunch to the delegates of the conference, but it is not clear how much amount was spent on the lunch alone. Thus, the amount which may be found by the Tribunal as having been incurred on lunch, etc., will be treated as an expenditure on entertainment whereas the balance will be expenditure for business considerations and not for entertainment purposes. In this view of the matter, we are unable to answer the question as the amount of Rs. 13,135 includes the expenditure on lunch, which has been held to be entertainment and thus not allowable. We, therefore, remit the case to the Tribunal to proceed to decide the matter in accordance with law. There will be no order as to costs. BHOPINDER SINGH DHILLON J.--I agree.
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1979 (8) TMI 55 - PUNJAB AND HARYANA HIGH COURT
Income Tax Act, Revenue Expenditure, Revenue Receipt ... ... ... ... ..... the course of the trading activities of the assessee. After hearing the learned counsel for the parties, we are of the opinion that the Tribunal was right in holding that the admission fee in the hands of the co-operative society is a receipt in return whereof no right is conferred on the members unless they further pay a sum of Rs. 10 as membership fee. Therefore, the admission fee did not confer any mutual benefit. The members by paying Re. 1 as admission fee, did not acquire any right on the co-operative society, unless they pay another sum of Rs. 10 per member. That being so it has rightly been taken towards the income of the assessee. In this view of the matter, the answer to this question is also given in the affirmative, i.e., in favour of the revenue and against the assessee. We are, therefore, of the opinion that both the questions referred to this court should be answered in the affirmative. However, the parties will bear their own costs. R. N. MITTAL J.--I agree.
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1979 (8) TMI 54 - DELHI HIGH COURT
Finding Of Fact, High Court ... ... ... ... ..... n any irrelevant material in arriving at its conclusion. Applying the aforesaid principle of non-interference with the findings of fact, unless the finding is vitiated for being not based on any evidence at all, we find that on the basis of the facts and circumstances found by the ITO, affirmed by the AAC and re-affirmed by the Tribunal, and set out in paras. (a) to (k) on pages ... and ... above, there was enough material for a conclusion that the payment of Rs. 68,540 as commission to the minors was not exclusively for the purposes of the business of the assessee. The learned counsel for the assessee has not been able to show that the ITO and the other tax authorities misdirected themselves in any manner in coming to this conclusion and, therefore, in disallowing the same as a deduction under s. 10(2)(xv) of the Indian I.T. Act, 1922. We, therefore, are unable to interfere with the same and answer the reference against the assessee. The reference is disposed of accordingly.
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1979 (8) TMI 53 - PATNA HIGH COURT
Net Wealth, Share In Firm ... ... ... ... ..... lth of the firm by reference to r. 2 of the W.T. Rules, if a partner qualified for any of the exemptions provided under the Act, such exemptions must be taken into consideration for determining the net wealth of the firm in terms of the said rule. Bearing in mind that the assets of the firm belong to the partners, if one looks at the provisions of cl. (iv) of s. 5(1) of the Act, it is clear that the partners do qualify for receiving that exemption. The house in question belongs to them and, therefore, also belongs to the assessee . Since they are using it for their residential purposes, the exemption would be admissible to them. It is a simple formula that if a thing would be available to all jointly, the pro rata share of each one, individually, cannot be denied to the individual. I would, accordingly, answer the question, as reframed, in the affirmative and in favour of the assessee. The assessee would be entitled to costs and hearing fee of Rs. 250. S. K. JHA J.--I agree.
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1979 (8) TMI 52 - KARNATAKA HIGH COURT
Change In Constitution Of Firm, Income Tax Act, One Partner ... ... ... ... ..... separate assessments. In the light of the discussion as above, we hold that in the case of change of constitution of a partnership firm occurring in any accounting year in any of the manners set out in sub-s. (2) of s. 187 of the Act, sub-s. (1) of that section requires that the assessment should be made on the firm as constituted at the time of making the assessment, and not two separate assessments, one on the firm before reconstitution and another on the firm as reconstituted, and we reiterate the view taken by this court in Karupukula Suryanarayana Shetty s case 1973 92 ITR 141. For the reasons aforesaid, we reject the contentions urged for the assessee and answer the reference as follows On the facts and in the circumstances of the case, the Tribunal was justified in upholding the action of the ITO in making one assessment for the period from April 1, 1970, to March 31, 1971, on the assessee-firm. The assessee shall pay the costs of the revenue. Advocate s fee Rs. 250.
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1979 (8) TMI 51 - BOMBAY HIGH COURT
Original Assessment, Valuation Report ... ... ... ... ..... net wealth chargeable to tax. Mere change of opinion of the succeeding officer is not enough and especially when before passing the assessment order the officer could have easily ascertained the correctness of the statements made in the return. In the present case, the only information available with the respondent No. 1 is a valuation report dated July 12, 1972. The mere fact that the two valuers have given conflicting reports about the true value of the properties is not sufficient to re-open the assessment under s. 17(1)(b) of the W.T. Act. In my judgment, the action of respondent No. 1 in the present case is totally erroneous and respondent No. 1 has assumed jurisdiction illegally and irregularly. The two interim notices dated March 26, 1973, and February 4,1974, require to be struck down. In the result, the petition succeeds. The rule is made absolute in terms of prayer (a) of para. 27 of the petition. In the circumstances of the case, there will be no order as to costs.
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1979 (8) TMI 50 - ALLAHABAD HIGH COURT
Advance Payment, Appeal To AAC, Business Expenditure, Industrial Undertaking, Profit Bonus ... ... ... ... ..... its employees. In the present case, the company allowed its employees free residence in the quarters, and in doing so incurred no expenditure at all. The position of the employees while residing in these quarters was that of a licensee of the company. The ITO was clearly in error in taking the fair annual rent calculated by him on a notional basis as an expenditure or an allowance contemplated by s. 40(a)(v). In view of the above, the fair annual rent calculated on a notional basis cannot be treated as an expenditure or allowance for purposes of s. 40(a)(v). We, accordingly, answer the first two questions in the affirmative, in favour of the assessee and against the department. The third question is also answered in the affirmative, but in favour of the department and against the assessee. As the reference has been answered substantially against the department, the assessee is entitled to its costs, which are assessed at Rs. 200. Counsel s fee is assessed at the same figure.
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1979 (8) TMI 49 - KERALA HIGH COURT
Rectification Proceedings, Sales Tax Act ... ... ... ... ..... entry is different and having regard to the terms and the content of entry 24(4) of the First Schedule of the 1951 Act, it is a still more vexed and difficult question as to whether cellophane would fall within the entry or be outside it. In the circumstances, we are by no means satisfied that there was any mistake apparent from the record in the original assessment made on the footing that the assessee was entitled to rebate in respect of the expenses claimed. On this short ground, it appears to us that the power of rectification was not attracted and that the ITO was wrong in passing the impugned order of rectification. Therefore, the learned judge s order allowing the writ petition and quashing the impugned orders was correct. On this short ground, we maintain the judgment of the learned judge and dismiss the appeals with no order as to costs. Leave to appeal prayed for is refused as there is no substantial question of law. Issue carbon copies of this judgment to counsel.
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1979 (8) TMI 48 - ALLAHABAD HIGH COURT
Substantially Interested ... ... ... ... ..... ts were realised and the proceeds paid over to the beneficiary who applied them with the approval of the trustees in purchasing a farm. The question that came up for decision was as to whether the proceeds of the benefit match was profit accruing to the cricketer in respect of his office or employment. It was held that it was in the nature of a personal gift and not assessable to income-tax. In the present case, the amounts have been received as a result of the resolution passed by the general body in consonance with the memorandum and articles of association. The amounts received are such as would have been normally received by the assessee from its members in years of loss. The principle of Reed s case 1927 11 TC 625 (HL), as such, has no application. We, accordingly, answer both the questions in the affirmative in favour of the department and against the assessee. The department is entitled to its costs, which are assessed at Rs. 200. Counsel s fee is assessed at Rs. 200.
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1979 (8) TMI 47 - ANDHRA PRADESH HIGH COURT
Partnership Deed ... ... ... ... ..... Depot 1977 109 ITR 686 must be upheld as, on a reasonable construction of the instrument of partnership as a whole, it was found that there was specification of the shares of the partners in respect of loss, if any, of the partnership in the same proportion as they distribute the partners share of profits. We are unable to agree with Sri P. Rama Rao, learned standing counsel for the revenue, that the Full Bench decision must be deemed to have been overruled or is no longer good law in view of the decision of the Supreme Court in Mandyala Govindu and Co. v. CIT 1976 102 ITR 1. For all the reasons stated, our answer to the question must be and is in the affirmative holding that the assessee-firm is entitled to the benefits of registration under s. 26A of the Indian I.T. Act, 1922, for the assessment year 1959-60. The Commissioner shall pay the costs of the reference to the assessee-firm. Advocate s fee Rs. 500 payable to Sri S. Parvatha Rao, who was appointed as amicus curiae.
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1979 (8) TMI 46 - ANDHRA PRADESH HIGH COURT
Business Expenditure, Current Repairs, High Court ... ... ... ... ..... of the roof of the assessee s building was held, on the facts and circumstances as a deductible expenditure and it was not of a capital nature. On a consideration of the entire facts and circumstances, we hold that the expenditure of Rs. 15,851 incurred by the assessee was on account of current repairs to the machinery within the meaning of s. 31 of the Act and the same is revenue expenditure and not capital expenditure. Judged from any angle, we are satisfied that the view taken by the Tribunal, relying upon the decision of this court in R. B. Shreeram and Co. (P.) Ltd. v. CIT 1968 67 ITR 428, is erroneous in law. For all the reasons stated, our answer to the question is in the affirmative and in favour of the assessee, holding that the expenditure of Rs. 15,851 incurred by the assessee on account of replacement of the motor engine is allowable as revenue expenditure under s. 31 of the Act in computing the assessee s income from business. There shall be no order as to costs.
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1979 (8) TMI 45 - PATNA HIGH COURT
Application For Extension, Reasonable Cause ... ... ... ... ..... cause shown by the assessee as no cause at all or not a reasonable cause at all, or should it go a little further and give further reasons for such a conclusion with regard to the nature of the cause shown ? I think the question being of levy of penalty, which is necessarily on the basis of a quasicriminal act of the defaulter, the department must give reasons for its conclusion. For example, in the instant case, the assessee went on telling the ITO as also the AAC its reasons for thinking that its petition for time having neither been rejected nor been accepted, it believed that time for filing the return was extended and yet the departmental authorities merely rejected that explanation of the assessee as not a reasonable explanation for delay in filing the return. As to why it was not reasonable, the department kept silent. Now, that is not the way in which the department is expected to act in these matters, particularly when it concerns the levy of penalty on an assessee.
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1979 (8) TMI 44 - ALLAHABAD HIGH COURT
Net Wealth, Share In Firm ... ... ... ... ..... , nevertheless, the company was borrowing from the bank in the relevant previous year, and in order to secure the loans the directors and the shareholders had stood sureties. The loans would not have been advanced in case these persons had not stood sureties. This being so, the case will fall within the dictum of the assessee s case for the earlier assessment year since reported in 1980 123 ITR 596 (All) . So far as the third question is concerned, as the answers to the first two questions will be reflected in the surtax assessment, the relief which the Tribunal should have granted, should be in consonance with the answers given to the first and second questions. We, therefore, answer the first question in the negative and the second question in the affirmative. As for the third question, surtax relief consequential to our answers to the first and second questions is to be granted. In view of the partial failure and success of the parties, there will be no order as to costs.
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1979 (8) TMI 43 - ALLAHABAD HIGH COURT
Application For Extension, Failure To File Return, Question Of Fact, Reasonable Cause, Wealth Tax Penalty
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1979 (8) TMI 42 - ANDHRA PRADESH HIGH COURT
Bona Fide, Cash Credits ... ... ... ... ..... espectively, for the two assessment years, which turned out to be not correct. The minimum penalty imposable appears to be 100 , that is, Rs. 25,000, at that time on account of the amendment of s. 271(1), which came into force on April 1, 1968. The assessee s explanation has been accepted by the Tribunal. The finding of the Tribunal that the very consent given for the proposal in proceedings under s. 271(4A) cannot be said to be genuine and valid so as to subject the assessee to the imposition of minimum penalties is one of fact which is binding on this reference court. We are unable to agree with the counsel for the revenue that there is no material in support of the aforesaid finding of fact. In this view, we must hold that the view taken by the Tribunal is correct in law and it is not illegal or erroneous. For all the reasons stated, our answer to the question is in the affirmative and in favour of the assessee and against the revenue. There shall be no order as to costs.
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1979 (8) TMI 41 - MADRAS HIGH COURT
Appeal To Appellate Controller ... ... ... ... ..... for examining the correctness of the assessment. We agree with this decision of the Calcutta High Court in delineating the amplitude of the powers of the appellate authority in dealing with a best judgment assessment. In the present case, the Appellate Controller was justified in examining the valuation of the individual items of the includibility of any particular item of property, whether it was eligible to tax or not, taking into account the provisions of the Act and the exercise of the powers by the Appellate Controller in this case cannot be considered to be erroneous. Unfortunately, the respondent though served, was not represented. But Mr. J. Jayaraman, the learned counsel for the Controller of Estate Duty, brought to our notice all the aspects that could have been placed before us if the accountable person had appeared. The questions referred to us are accordingly answered in the affirmative and in favour of the accountable person. There will be no order as to costs.
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