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Case Laws
Showing 41 to 60 of 164 Records
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1980 (10) TMI 130
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... ... ..... ed was held to be on capital or investment account. If, on the other hand, the income and expenditure in respect of such property is brought into the business accounts of the assessee, the property continues as stock-in-trade. In the case of the property in question here, there have been no dividends and, therefore, no income. The loss on the realisation has been however, dealt with in the business accounts although entered only in the balance sheet. It must, therefore, be held that the shares of the face value of Rs. 7,50,000 in Kathayee Cotton Mills Ltd. taken by the assessee in lieu of part of the debt due to it from this company continued to be the stock-in-trade of the assessee and, therefore, the loss of Rs. 6,45,000 computed by the CIT (A) as arising out of the realisation of these shares during the previous year for the assessment year should be treated as the business loss of the assessee for this assessment year. 12. The departmental appeal is, therefore, dismissed.
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1980 (10) TMI 129
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... ... ..... ntended to go out of the business after the termination of the managing agency. On the other hand, the materials on record referred to above show that the assessee very much intended to continue to be in business. Indeed, it commenced a new business in elector chemical equipment s in the year ending 31st March, 1972 and continues to carry on the same. In these circumstances, we are unable to accept the contention of the assessee that the amounts referred to above are not liable to be taxed for the assessment year under consideration. 19. Since it has now been held by the Tribunal that these amounts are not liable to be taxed as income for the asst. yr. 1970-71 and since it has been found that these amounts accrued to the assessee during the previous year ending 31st March, 1971, these amount are liable to be taxed in its hands for the assessment year under consideration. We direct that assessment be modified accordingly. 20. In the result, both the appeals are partly allowed.
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1980 (10) TMI 126
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... ... ..... Rep. relied upon the orders of authorities below 4. We have considered the rival submissions. We have no reason to reject the appellants contention that there was cost for route value, notwithstanding the fact that the entire cost including route value in the erstwhile family s hands were taken as sale value of the bus in seller s hands. Route value being a valuable asset cannot be presumed to have been got free. If the sale value of the bus could be deemed to include the sale value, there is no reason why the purchase should not be similarly assessee is entitled to substitute the cost as on 1st Jan., 1954. As pointed out by the ld. counsel for the appellant, the prospect of nationalisation being much less imminent there, the value placed is not also unreasonable. We accept this contention. The value as on 1st Jan., 1954 will be taken at Rs. 10,000 and the gross capital gains assessable will be Rs. 10,000. 5. In the result, the appeal is allowed on the lines indicated above.
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1980 (10) TMI 124
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... ... ..... ty in question is merged with that part of the business taken over by the assessee, i.e., to say, the part of the business of M/s. Gobald Motor Services Pvt. Ltd., has been taken as an integrated whole by the assessee, the assets together with the concomitant liabilities. The whole transaction cannot be dissected into separate parts and some part cannot be considered to be of revenue account and some part of capital account. The entire transaction resulting in the take over by the assessee on 1st Oct., 1976 is a capital transaction and by liability that has been taken over by the assessee in respect of the expenditure and in respect of the obligation to pay by his predecessor would, therefore, assume the character of a capital outgoing in the hands of the assessee. The assessee is, therefore, not entitled to the deduction of this amount of Rs. 6,364. The orders of the lower authorities in this regard are, therefore, confirmed, 11. In the result, the appeal is allowed in part.
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1980 (10) TMI 122
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... ... ..... es of the law that they were under the impression that as the income was marginal and below taxable minimum, they need not file any return and that there was no deliberate default. On the other hand the ld. Deptl. Rep. Relied on the orders of the authorities below. 4. This is a border line case and the assessee filed a return showing an income of Rs. 9,610 such return had been filed by the assessee voluntarily. Since the amount is below the taxable minimum, we agree with the assessee s contention that the assessee was under the bona fide impression that they need not file the return. The assessee s partners are not well educated person who bona fidely believe that the income is below the taxable minimum and so they delayed the return. It cannot be stated to be a deliberate default. Under such circumstances we agree with the assessee s counsel and hold that this is not a fit case for levy of penalty. So, the penalty levied is cancelled. 5. In the result, the appeal is allowed.
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1980 (10) TMI 121
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... ... ..... paid by the firm to a partner thereof and the bar imposed by s. 10(4) (b) of the IT Act, 1922 would not be applicable. Sec. 10(4) (b) of the IT Act, 1922, is equivalent to s. 40(b) of the IT Act, 1961. On the other hand, the ld., Deptl. Rep. relied on the order of the CIT (A). 4. In the chits conducted by the assessee-firm, three partners were subscribers and they were paid chit kasar. This is not a payment of interest, remuneration, or commission paid to a partner. This is only a rebate given to the subscribers partner for taking part in the chit. So, according to us, s. 40 (b) of the Act is not attracted. The decision of the Allahabad High Court reported in 90 ITR 73 also supports the assessee s contention. Since the payment to the partner was not interest, commission or salary, etc., but only a rebate given to the subscriber for contributing the chit, s. 40 (b) of the Act is not applicable. So, the addition of Rs.27,323 is deleted. 5. In the result, the appeal is allowed.
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1980 (10) TMI 118
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... ... ..... given that the gifts were the devices for introducing their wives as partners on their behalf. We are also convinced with the reasoning given by the ld. counsel for the assessee that the Department has not been able to prove that the profits earned have ultimately gone to the husbands of the two ladies. Mere management of the affairs of the wives by the husbands in view of the nature of the relationship, in our opinion, would also not be a factor to conclude that the two ladies were the benamidars of their husbands. In view of these facts, we hold that the two ladies were not benamidars of their husbands and consequently, the provisions of Expln. below s. 185(1) will not be applicable to the facts of the case. Consequently, we are unable to sustain the orders of the authorities below. The same are, therefore, cancelled. The appellant will be entitled to the benefit of continuance of registration for the asst. yr. 1976-77. Under appeal. 7. In the result the appeal is allowed.
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1980 (10) TMI 117
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... ... ..... see can claim such deduction under s. 37 of the Act, even though there was no compelling necessity to incur such expenditure. The fact that somebody other than the assessee is benefited by the expenditure should not come in the way of the expenditure being allowed by way of deduction under s. 37 of the Act. In support of this proposition I am supported by the ratio of the decision in the case of Sassoon J. David. 10. From the aforesaid facts and circumstances of the case it is clear that the loss in question took place. There was a bona fide settlement between the parties and in pursuance of such settlement the payment of Rs. 18,000 was made by the assessee to the consignee on three different dates. The assessee had to incur its loss in the course of its business. As a matter of fact the assessee did so for promoting its business. Thus the loss in question is allowable as business loss. The finding of the AAC to the contrary is wrong. 11. In the result, the appeal is allowed.
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1980 (10) TMI 116
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... ... ..... om the firm to carry on the business. From the said partnership deed, it is clear that it was not the one sided affair and whereas the right in any asset was given up by the deceased, the share and the liabilities of the deceased were taken over by the continuing partners and, thus no gift was there. The deceased did not retire without any consideration. The consideration was that she was relieved of her liabilities by the continuing partners. The other firm, M/s Vineet Trading Corporation having been dissolved, it can be said that all the partners equally divided their shares and liabilities and nothing was left by one for the other. So it is a case where the provisions of sec. 9 cannot be attracted. For the reasons, we do not agree with the view taken by the authorities below and we hold that nothing on account of any share of the deceased in the goodwill can be included in the principal value. The amount so added in the principal value is deleted. 3. The appeal is allowed.
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1980 (10) TMI 115
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... ... ..... y. 3. The trial judge was wrong in holding that the creditor has a right, by virtue of the hypothecation deed to be paid out in preference to the State, though the dues payable by the assessee was a public debt and was not a debt which arose in commercial dealings between the assessee and the State. Thus following the above dictum, we hold that the certificates issued by the assessee to the two banks were mere formality and whatever averments were made in those certificates were of no legal validity, as they did not create any right in favour of the bank and if at all, it could be so, since the date of declaration fell after the end of the accounting year, they were of no avail to the ITO. Thus, in the circumstances of the case, we confirm the deletion made by the CIT (A), as the goods of the new iron account hypothecated with the two banks were the same and not different 6. In the result, the order of the CIT (A) is confirmed and the appeal filed by the Revenue is dismissed.
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1980 (10) TMI 114
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... ... ..... oes not find place in the profit and loss account. In this connection out attention was also invited to the grounds of appeal filed before the CIT (A) wherein it was specifically mentioned that the sales tax penalty during the year amounted to only Rs. 4,320 and not Rs. 11,175. We required the ld. Representative of the Department to verify the contention of the ld., counsel from the copy of the P and L a/c filed by the assessee before the ITO. He agreed with the contention of the ld., counsel and pointed out that the claim of the assessee was only to the extent of Rs. 4,320 and not Rs. 11,175. 9. As regards the merit of the claim, the ld., counsel of the assessee frankly admitted that this sum of Rs. 4,320 was on account of payment of penalty under the sales tax laws and hence, to this extent the claim of the assessee is not tenable. We, therefore, upheld the disallowance of Rs. 4,320 as against Rs.11,175 upheld by the CIT (A). 10. In the result, the appeal is partly allowed.
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1980 (10) TMI 113
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... ... ..... the Act were not rightly initiated. Besides the above we have seen that the assessee furnished all the information relevant for the assessment and since there is a background prior to the filing of the return for the asst. yr. 1976-77 in so much so that a revised return was filed for the asst. yr. 1971-72 wherein the ITO was fully posted with the facts of the case, it cannot be said that the assessment made by the ITO on 18th Jan., 1978 was made without making proper enquiries. Besides the above, we have noted that while setting-aside the assessment made by the ITO, the CIT has given definite findings in para 3 of his order and in the face of these findings, the ITO was left with no choice to make further enquiries or to give reasonable opportunity to the assessee. Thus, on the totality of facts and circumstances, we reverse the order passed by the CIT and restore the assessment made by the ITO on 18th Jan., 1977. 4. In the result, the appeal filed by the assessee is allowed.
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1980 (10) TMI 112
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... ... ..... sions of cl. (a) of sub-s. (1) of s. 209A. The penalty was imposed on a different charge, namely, failure to file an estimate under s. 212(3A). Therefore, the ratio of the decision of the Gujarat High Court in the case of Lakhdhir Lalji clearly applied and the penalty cannot be upheld. The contention of the Department that s. 292B comes to the rescue of the ITO in such a case is not correct. Sec. 292B covers omission to mention correct provision of the Act in the notice provided in substance the notice is in conformity with or according to the intention and purpose of the Act. In the present case, the notice only mentions s. 273(b) and, therefore, it is clear that the charge under s. 273(c) was not brought home to the assessee in the notice. In similar circumstances, the penalty was cancelled by Jaipur Bench of the Tribunal in the case of M/s. Durga Oil Mills (1980) 9 TTJ 555 (1980) 9 TLR 242. Having regard to all these facts and circumstances, I, cancel the impugned penalty.
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1980 (10) TMI 111
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... ... ..... n the case of GTO, B-Ward, Ongole vs. Alapati Mastan Rao in GTA No. 5/Hyd/1979 for the asst. yr. 1973-74, where on identical facts, both the Bench of the Tribunal have taken a view, favourable to the assessee. 22. As a result of our discussion as above, on the facts and in the circumstances of the case in appeal before us, we do hold, that the gift made by Shri Gondi Pullaiah as manager of his HUF, out of the joint family funds and as sole surviving coparcener, to his wife Smt. Ramalaxamamma at Rs. 30,000 is a gift which has to be treated as gift by Shri Gondi Pullaiah to his wife and out of the funds, which under the principle of Hindu law, have to be taken and treated to be belonging to Shri Gondi Pullaiah in his individual separate capacity and the gift being by Shri Gondi Pullaiah to his spouse viz., Smt. Ramalaxamamma the wife, it merits to a claim of exemption under s. 5(1)(viii) of the GT Act, 1958. 23. In the result, the appeal by the assessee succeeds and is allowed.
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1980 (10) TMI 110
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... ... ..... assessee, have to be read disjunctively and if they are so read, the present case which satisfies the third test should be held as falling under s. 10(2)(xv) of the Act. The payment by the assessee firm on its Silver Jubilee to its employees merits to be allowed as a business expenditure, expedient and incidental to the assessee rsquo s business, since the expenditure is not in the nature of capital expenditure or else personal expenditure of the assessee and more so it has been paid by the assessee to its employees on a particular occasion viz., Silver Jubilee celebrations, and accordingly, the said expenditure is expended wholly and exclusively for the purposes of the assessee rsquo s business, hence merits to be allowed, as deduction, in computing the total income of the assessee for the assessment year under appeal as income under the head lsquo profit and gains of business rsquo . We order accordingly. 7. In the result, the appeal by the assessee succeeds and is allowed.
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1980 (10) TMI 109
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... ... ..... e excessive while the expenses allowed are inadequate. We are not adverting to these contentions at this stage but, it is made clear that they are left open and the appellant is at liberty to raise such contentions before the assessing officer at the time of finalisation of the assessments after this remand. If an inspection will be helpful, the appellant is at liberty to apply for such an inspection and the assessing officer will conduct such an inspection and give the appellant a copy of the inspection report before the issue of the pre-assessment notice and the appellant will be given an opportunity not only to raise his contentions, but to produce any documentary or other evidences and for being heard also. 11. In the result, allowing these second appeals and setting aside the orders of the authorities below the files are remitted back to the concerned assessing officer for denovo disposal in accordance with law as directed in paragraphs 9 and 10 above, order accordingly.
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1980 (10) TMI 108
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... ... ..... made in Form D which was served on the assessee. From D has been prescribed under s. 2(2) of the said scheme. The form clearly lays down in paragraph 4 thereof as follows 4. If you intend to appeal against the order determining the compulsory deposit required to be made by you or the penalty required to be paid by you or the penalty required to be paid by you, you may present an appeal under Part A of Chapter XX of the IT Act, 1961 to the AAC of IT, within thirty days of hte receipt of this notice, in Form No. 35 of the IT Rules, 1962, or as near thereto as may be, duly stamped and verified as laid down in that Form. It is thus clear that the scheme gives right of appeal to the assessee who is served with a notice of demand under s. 14(1) of the Act. I therefore, hold that the appeal before the AAC was competent. The Deptl. Appeal, therefore, has no merit and is dismissed. 3. The cross objection which is merely in support of the order of the AAC is redundant and is dismissed.
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1980 (10) TMI 107
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... ... ..... accounting regularly employed by the assessee has been accepted. That being so. We do not find any reason to reject the method of accounting only in this year. The purchases and sales are fully vouched and an over-all quantity stock account had also been furnished. The reason given by the assessee for the decline in the rate of G.P. is that the rates of copper came down during this year. The closing stock has been valued at Rs. 27 per kg. After carefully considering all the aspects of the matter, we are of the opinion that instead of enhancing the addition of Rs. 25,995 made by the ITO, the CIT (A) should have deleted the entire addition. The addition should have been deleted particularly in the light of the CIT (A) own finding when he deleted the larger addition of Rs. 1,87,050. We would thus accept the book result and delete the addition of Rs. 69,995 which was made by the CIT (A). 9. In the result ITA No. 4114 (Del) 1979 is allowed and ITA No. 3667 (Del)/1979 is dismissed.
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1980 (10) TMI 106
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... ... ..... y by the AAC is reasonable and does not call for any interference. 6. The next ground relates to the disallowance of depreciation on the car. The ITO disallowed half of the depreciation but on appeal the AAC directed that only 1/3rd of the depreciation should be restricted. Keeping in view the nature of the assessee rsquo s activities we feel that the disallowance of 1/4th depreciation would meet the ends of justice. 7. The last ground relates to the levy of interest of Rs. 4774 under s. 217. This case is from the jurisdiction of the Hon rsquo ble Allahabad High Court and the view of the Allahabad High Court is that the charging of interest under s. 217 is not appealable. Reference is invited to the judgements in Vidyapat Singhania vs. CIT (1977) 107 ITR 533 (All) and Addl. CIT vs. Allahabad Milling Co. (1978) 111 ITR 111 (All). Respectfully following these judgments, we are unable to entertain the ground raised by the assessee. 8. In the result, the appeal is partly allowed.
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1980 (10) TMI 105
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... ... ..... expenses, here also we find absolutely no justification for the addition. The expenditure on house hold expenses amounted to Rs. 7,500 which the ITO considered on the low side without specifying any item of unrecorded and unexplained expenditure, which would show that the extent of the expenditure was higher. The ITO merely made the addition on the vague ground that the assessee s standard of living is high and the assessee was maintaining a car and, therefore, the expenses cannot be less than Rs. 1,000 per month. It is also brought to our attention that the assessee has claimed before the departmental authorities that in addition to the amount of Rs. 7,500, a part of the house hold expenses was also met by son and daughters-in-law, who were qualified doctors, and out of their separate earnings. It is particularly stated in the statement of facts before the AAC. In the circumstances, we are unable to sustain the addition. It is accordingly deleted. 5. The appeal is allowed.
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