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1979 (8) TMI 20
Charitable Trust, Exemptions ... ... ... ... ..... t that the assessment in the status of an HUF could be made only when there were two or more members of the HUF. If in the present case the property had been obtained on partition, then as a result of the marriage and the subsequent birth of the daughter, it would have been possible to hold that the income belonged to the HUF or that the assets belonged to an HUF as in Narendranath s case 1969 74 ITR 190 (SC). But that is not the position here. The property bad been obtained only under a gift. The legal incidence of the property obtained may change on the birth of the son, but until that event happened, the assessee would have to be assessed only as an individual. The result is that the question referred in T.C. No. 170 of 1975 is answered in the negative and in favour of the revenue. Similarly, the question referred in T.C. No. 171 of 1975 is also answered in the negative and in favour of the revenue. The revenue will be entitled to its costs. Counsel s fee Rs. 500 one set.
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1979 (8) TMI 19
Estate Duty, Property Passing On Death ... ... ... ... ..... ferent one. Accordingly, in order to bring out what the real controversy between the parties is, we have, with the consent and assistance of both learned counsel, reframed question No. 2 as follows Whether the Tribunal was right in holding that in arriving at the value of goodwill of a company under the super profits method of valuation the maintainable profits (less tax thereon) are not to be considered on the ground that it would amount to deduction of taxes twice ? For the reasons set out above, we answer the questions as follows Question No. 1 In the negative. Question No. 2 as reframed by us In the negative. The Tribunal will now proceed to determine the respondents objection to the valuation of goodwill taken in the second appeal before the Tribunal in the light of our judgment. As the greater part of the hearing of this reference was taken up by the arguments on the first question, the applicant will pay to the respondents the costs of this reference fixed at Rs. 250.
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1979 (8) TMI 18
Agricultural Income Tax, Deduction ... ... ... ... ..... matter to be sent back to the Appellate Tribunal. It is not possible to accept this contention. Nothing prevented the assessee from making an actuarial estimate in time. In the absence of a proper explanation why this could not be done, we do not consider that this is a fit case in which the remand can be made. The learned counsel for the assessee prays for leave to appeal to the Supreme Court in accordance with the provisions of art. 134A of the Constitution. We are not satisfied that this is a fit case for the grant of leave, as the decision rejecting the assessee s claim is based on the facts here. The discussion of the cases cited brings out how the claim is not admissible even on the basis of principles enunciated in decisions cited before us, because of the absence of an actuarial estimate and the creation of an account for this purpose. The tax case revisions are dismissed with costs. Counsel s fee Rs. 250 one set. Leave to appeal to the Supreme Court is also refused.
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1979 (8) TMI 17
Charitable Purpose, Charitable Trust ... ... ... ... ..... s contemplated, by s. 10(22) would apply. The Tribunal has unfortunately not noticed this provision. It is for the ITO to consider this provision in the light of the judgment in Addl. CIT v. Aditanar Educational Institution 1979 118 ITR 235 (Mad), and the opinion we have expressed above. The Tribunal has held that the income from these institutions could be taken as income from other sources which is wrong and is inconsistent with the exemption available under s. 10(22). The direction of the Tribunal that the income from these schools will have to be assessed under the head Other sources will also be erroneous in the light of the above observations made by us while considering s. II. . The question of. 25 per cent. accumulations would, therefore, have, no relevance in the context of s. 10(22). The second question is answered in the negative and in the light of the directions given above. The third question is also answered in the negative. There will be no order as to costs.
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1979 (8) TMI 16
... ... ... ... ..... s question. At the stage when assessment proceedings re-commence before the WTO after the Valuation Officer has passed an order under sub-s. (3) or (5) of s. 16A, the petitioners have a right to urge and persuade that the valuations given by the Valuation Officer are in respect of properties which are not assets and hence not taxable. Neither any statutory provision nor any principle of law justifies the view that the WTO should proceed with the assessment piecemeal and decide at an intermediate stage as to whether a particular property is an asset or not and hence liable to taxation or otherwise. If the assessees are aggrieved by the assessment orders passed they have a statutory right of appeal under s. 23 of the Act and thereafter under s. 24. For the reasons given, we are of the view that these petitions are misconceived and are consequently dismissed. The respondents will be entitled to their costs from the petitioners. Interim orders in all the petitions stand vacated.
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1979 (8) TMI 15
Jurisdiction, Limitation, Notice, Reassessment ... ... ... ... ..... interest suspense account from year to year is violently disturbed, as is sought to be done retrospectively from about 20 years, there will be complete chaos amongst banks and financial institutions and consequently in the trade, industry, and agriculture as a whole, adversely affecting the entire national economy. As judges, we are concerned only with the questions of law and not with questions of policy. It is for the Government, on the one hand, and the banks on the other hand, to settle the policy as to whether the interest credited to the suspense account should be liable to payment of incometax. Apparently, the policy of the Government from 1924 to 1978 was that it should not be subjected to tax. The policy seems to have now changed with the effect that law has to prevail. But this does not preclude a reversion to the former policy if the banks are able to persuade the Government to do so. For the above reasons, the writ petition is dismissed with no order as to costs.
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1979 (8) TMI 14
... ... ... ... ..... ppear before the Rent Controller as a witness or to produce the documents indicated in the summons. That was a new case made out for the first time before this court. It has also to be pointed out that although a writ of mandamus or any other proper writ or direction was claimed as against the Rent Controller, Wardha, and a certain direction was specifically prayed for, for being issued to the Rent Controller, Wardha, the Rent Controller, Wardha, has not been impleaded as a party to this writ petition. As observed earlier, if the writ petition were to be allowed the only appropriate writ that could have been issued in this case would be either a writ of prohibition or a writ of certiorari, and in that case, the Rent Controller, Wardha, would be a necessary party, and these writs could not have been issued without his being made a party in this writ petition. This writ petition must then fail. The rule is discharged with costs and the stay granted earlier shall stand vacated.
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1979 (8) TMI 13
Unregistered Firm ... ... ... ... ..... arain Kashi Prasad v. Addl.. CIT 1981 128 ITR 663 (All). We are, hence, unable to accept this plea raised on behalf of the petitioners. Learned counsel for the petitioners also submitted that after dissolution of the unregistered firm, it was open to the ITO to assess the partners. That may be so, but the ITO did not do so. Moreover, no relief has been claimed against the assessment orders passed against the unregistered firm itself. The reliefs are confined to the recovery proceedings. In the result, the petitions succeed and are allowed in part. The petition by the firm is dismissed, while that of the individual partner is allowed. The attachment effected by the TRO on the properties of the partners of the firm is quashed and the TRO is restrained from recovering the arrears Of tax due from the unregistered firm from its partners personally, under and in pursuance of the, recovery certificate dated March 16, 1972. In the circumstances, the parties will bear their own costs.
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1979 (8) TMI 12
Double Taxation Relief ... ... ... ... ..... ement allowable under the agreement. On a plain reading of art. IV and art. VI(b) of the aforesaid agreement there is no scope for introducing, in the abatement, any matter relating to the allowance of double I.T. relief on the U.K. income, regarding either the amount of income on which the said relief was allowable or the rate of relief applicable thereto. The ITO therefore, in our opinion, erred in taking into account such matters in his order dated September 9, 1965, by which he allowed refund of Rs. 8,00,000 more or less to the assessee, but the assessee did not challenge this action of the ITO. The same error, in our opinion, has been committed by the Commissioner while revising the order dated September 9, 1965, of the ITO and, therefore, we answer question No. 2 in the affirmative and in favour of the assessee. In the premises question No. 1 has become purely academical and, therefore, we decline to answer it. There will be no order as to costs. R. N. PYNE J.-I agree.
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1979 (8) TMI 11
Assessment, Notice To Produce Accounts And Documents ... ... ... ... ..... uments, learned counsel placed reliance on the decision of Grosvenor Place Estates Ltd. v. Roberts 1961 I All ER 341 1961 2 WLR 83(CA) and Anglo French Drug Co. (Eastern) P. Ltd. v. R.D. Tinaikar, AIR 1959 Bom 21. Neither of the two decisions mentioned above has, in our opinion, any bearing on the question we are called upon to decide. As to whether the particulars called for by means of the notice under s. 142(1) of the Act are relevant or not has to be decided on the facts of each particular case. As already discussed, a scrutiny of the notice and the accompanying list served on the petitioner on the 20th March, 1975, leaves no room for doubt that the particulars and documents that it has been asked to furnish and produce are relevant to the assessment proceedings. In our opinion, there is not the slightest merit in this petition, which we hereby dismiss with costs to the respondent. Interim orders dated 1st December, 1975, and the 15th December, 1975, are hereby recalled.
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1979 (8) TMI 10
Delay In Filing Return, Penalty ... ... ... ... ..... gal position as held by this court in Nemichand Ganeshmal v. CIT 1980 124 ITR 438 (MP) and the Supreme Court case of Hindustan Steel Ltd. v. State of Orissa 1972 83 ITR 26, cannot be relied upon in the context of s. 271(1)(a) for the proposition that it should be shown that the assessee acted deliberately in defiance of law or was guilty of contumacious conduct before he can be held liable under s. 271(1)(a). But this does not militate against the view that penalty need not be imposed in all cases where it is lawful to do so. In our opinion, the Tribunal acted within its lawful discretion in deleting the penalty. We answer the questions as follows Questions Nos. (1) and (3) The Tribunal acted within its lawful discretion in cancelling the penalty. Question No. (2) The Tribunal though impliedly held that there was no reasonable cause for not filing the return within time, yet it acted lawfully in cancelling the penalty. The parties shall bear their own costs of this reference.
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1979 (8) TMI 9
Discretion Not To Impose Penalty, Penalty ... ... ... ... ..... to impose penalty is exercised when penalty is imposable. It is on this footing that the authorities in a proper case can exercise their discretion in favour of the assessee by not imposing the penalty. In the instant case, a reading of the order of the Tribunal does not go to show that the Tribunal held that no penalty could be imposed on the partners of the firm. The Tribunal, in our opinion, in the exercise of its discretion, did not impose penalty having regard to the facts and circumstances of this case. In doing so, it cannot be said that the Tribunal did not act in accordance with law or exceeded its jurisdiction. In this connection, we may refer to a recent decision of this court in Addl. CIT v. Chokhelal Sharda Prasad (Miscellaneous Civil Case No. 221 of 1973, decided on 20th August, 1979) Our answer to the question referred is as follows The Tribunal acted within its lawful discretion in cancelling the penalty. There shall be no order as to costs of this reference.
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1979 (8) TMI 8
Certificate Proceedings ... ... ... ... ..... in any event reserve not allowed in computing profits within the meaning of r. 2(1). The Supreme Court held that the surplus over the par value of the shares issued was premium realised from the issue of shares and in that view the same could not be taxed as income. In view of the decision of the Supreme Court, the surplus of the assets over the par value of the shares allotted to the Maharaja could not be considered as saving to the assessee-company. It has appropriately to be regarded as premium as pointed out by the Supreme Court. Once the concept of capital which includes premium on capital is understood, it would become clear that it is not income within the meaning of the I.T. Act. Similarly, when the reserve was to be treated as capital, in the circumstances of the case, it could not be treated as income. Since the question stands concluded and no other question arises we reject these applications. In the circumstances of the case, there shall be no order as to costs.
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1979 (8) TMI 7
Delay In Filing Return, Penalty ... ... ... ... ..... ot. Here, the finding of fact is that the cause shown was not reasonable. Learned Counsel drew our attention to CIT v. Assam Automobile and Accessories Agency 1978 111 ITR 411 (Gauhati). In that case while examining the cause shown by the assessee for the delay, it was held that there was no lack of bona fide. In substance, the finding was that the assessee was able to satisfy the authorities that the cause was satisfactory. In the present case the position is to the contrary. Though in the first year the return filed was below the exemption limit, yet, admittedly, the assessee was assessed on an income which was higher than the exemption limit. For the second year the revised return was beyond the exemption limit. As such the assessee was not under an obligation to file a return below the exemption limit, yet when he deliberately filed a return he had to file it within time. In the result, the writ petition has no substance and fails. It is accordingly dismissed with costs.
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1979 (8) TMI 6
Actual Cost, Business Expenditure, Depreciation, Developement Rebate ... ... ... ... ..... Rs. 19,450. It, however, held that the balance of the expenditure which could be reasonably related to the assets comprised in the tyre cord factory should be included in the actual cost of those assets for the purpose of granting development rebate and depreciation. The other item of Rs. 45,087 was disallowed by the ITO but the Tribunal allowed this item to be included in the actual cost for the purpose of depreciation and allowed the amount in the capital costs. The ITO has also deleted the expenditure of Rs, 28,196 on account of football tournament. This was, however, allowed by the Tribunal. The questions raised are identically the same as are the subject matter of decision in the connected I.T.R. No. 77 of 1973. Counsel appearing for the Revenue has conceded that our decision in that case will govern the decision in this case also. For the reasons mentioned in that judgment we answer the questions Nos. 1, 2 and 3 in the affirmative. The parties to bear their own costs.
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1979 (8) TMI 5
Actual Cost, Business Expenditure, Depreciation, Developement Rebate ... ... ... ... ..... ecessary that the expenditure must be connected and co-related to any particular brand which is dealt with by a large group as D.C.M. The fact that the name of D.C.M. gets advertised because of the holding of the tournament would naturally mean that a large number of people would become familiar with the name of D.C.M. The publicity to the brands of D.C.M. is inherent in the publicity of the name of D.C.M. Obviously if a business house dealing with a large number of goods spends money on such items of sport it has to be on behalf of the parent organisation and could not be relatable to any particular product sold by it, nor in law it is so necessary in order to claim the business expenses.. Advertisements by D.C.M. would inevitably carry advertisements for all the products put out by the D.C.M. There is no merit in this contention. Dismissed. We see no reason to take the contrary view and we also, with respect following this judgment, answer this question in the affirmative.
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1979 (8) TMI 4
Whether the reassessment sought to be made by the ITO on the assessee-trust under s. 34(1)(b), was time barred - assessee-trust was clearly a stranger to the assessment proceedings of S. Raghubir Singh and it was not " any person " within the meaning of the second proviso to s. 34(3). The High Court was, therefore, right in taking the view that the second proviso to s. 34(3) was not attracted and the reassessment proceedings against the assessee-trust were barred by time.
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1979 (8) TMI 3
Excess cost of building was included in firm's income - Appellate Assistant Commissioner directed exclusion on the ground that the firm was not the owner of the building, and it was to be debited to the co-owner - AAC in appeals before him could not convert the provisions of section 147(a) into those of section 153(3)(ii) and that provisions of section 153(3)(ii) were not applicable to the instant case - reassessment of individual co-owner partners is not valid
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1979 (8) TMI 2
Whether the Tribunal was, in law, right in sustaining the penalty of ₹ 2,955 by applying the provisions of section 271(1)(c)(iii) of the Income- tax Act, 1961, as amended w.e.f. April 1, 1968 - held that cl. (iii) substituted in sub-s. (1) of s. 271 of the I. T. Act, 1961, governs the case before us and, therefore, the penalty imposed on the assessee in the instant case is covered by that provision - We answer the question in the affirmative, in favour of the revenue
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1979 (8) TMI 1
Reopening of assessment u/s 147 - Can the view expressed by an internal audit party of the income-tax department on a point of law be regarded as "information" for the purpose of initiating proceedings under s. 147(b)? - Whether ITO was legally justified in reopening the assessments on the basis of the view expressed by the internal audit party and received by him subsequent to the original assessment - question referred by Tribunal is answered in the negative, in favour of the assessee
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