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1980 (3) TMI 121
... ... ... ... ..... ssee should be allowed the benefit of deduction from the cost as any other Revenue expenses which were incurred during the year under consideration. 7. Having heard both the parties, we are inclined to agree with the assessee in this matter. The issue is no longer an open one and has been well settled by the decision of the Supreme Court in well known case of Challapalli Sugars Limited vs. CIT (1975) 98 ITR 167 (SC) and also the case of CIT vs. J.K. Cotton, Spinning and Weaving Mills Limited (1975) 98 ITR 153 (All). In the cost of machinery and plant, not only the price but also the expenses incurred to acquire the said plant and machinery will also be includible. We. therefore, uphold the finding of the AAC and dismiss the appeal. 8. The cross objection filed by the assessee becomes infructuous in view of the above observations and the same is accordingly dismissed. 9. In the result, the appeal filed by the Revenue and the cross objection filed by the assessee are dismissed.
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1980 (3) TMI 120
... ... ... ... ..... on the facts and in the circumstances of the case, the Tribunal s finding that the expenditure incurred by the assessee company by way of providing hot and cold drinks, lunch, etc., to its up-country customers were of a customary nature in the assessee s line of business and that the said expenditure did not constitute entertainment expenditure within the meaning of s. 37(2B) of the IT Act was proper or was contrary to the material on record? The Bombay High Court rejected the Commissioner s application under s. 256(2) by their order in ITA. No. 30 of 1978 dt.13th June, 1978and in ITA No. 363 of 1977. It was against this order of the Bombay High Court that the Special Leave petition was made to the Supreme Court and the Supreme Court rejected this petition. By such refusal the Supreme Court has approved the decision of theGujaratand Bombay High Courts. In view of the Supreme Court judgment the order of the AAC was perfectly in order. 4. In the result, the appeal is dismissed.
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1980 (3) TMI 119
... ... ... ... ..... timate as provided in s. 212(3). From the order of the ITO it is not found as to what default he is indicating for which he was obliged to levy a penalty. cl. (b) evidently will not apply on him which applies only to a person who is not an assessee known to the IT Department. Similarly, we may rule out the default provided in cl. (a) because the ITO has not brought any material to show that he had filed an estimate which he knew or did not have reason to believe to be untrue. The ITO has not charged the assessee for not filing a revised estimate and, therefore, cl. (c) will also have no application on him. Hearing the representative, the learned counsel for the assessee, we are of the opinion that the submissions have much force and we agree with him. The ITO has not clarified the default for which he has proceeded to penalise the assessee. We, therefore, vacate the order of the ITO and also the order of the AAC who upheld the penalty. 4. In the result, the appeal is allowed.
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1980 (3) TMI 118
... ... ... ... ..... ecessary that it should have been incurred necessarily . An expenditure can be allowed under s. 37(1) if it fulfils the necessary conditions even though it is incurred voluntarily and without any necessity. The expression for the purpose of the business as it occurs in the section is wider in scope than the expression for the purposes of earning profits . It may take in not only the day-to-day running of a business but also many other acts incidental to the carrying on of a business. There is no dispute about the principles laid down in the said judgments. We asked the ld. counsel for the assessee to explain as to why shortage excess of cash occurred on so many dates and he explained that this happened due to an old accountant. After looking to the details furnished before us we are satisfied that the shortage in cash is incidental to the carrying on of the assessee s business. We, therefore, allow the expenditure of Rs. 1,341. 7. In the result, the appeal is partly allowed.
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1980 (3) TMI 117
... ... ... ... ..... wals, he is entitled to claim deduction thereof. The mere fact that in the instant case the details were not furnished before the ITO cannot be put against the assessee for rejecting his claim, especially when it is seen that he did make such a claim before the AAC. As already stated, the claim for deduction of this interest had been make in the assessment of the firm, but that was rejected. It was only thereafter that the assessee claimed as a deduction in the assessment to be make on him. 8. It is seen that a similar claim made by another partner, C.K. Ramachandran Nair, was also rejected and the Tribunal by its order dt. 13th July, 78 in ITA. No. 804(Coch) 77-78, had directed the ITO to consider the issue. The facts and circumstances being the same, we think that the same direction should be made in this appeal also. We, accordingly, set aside the order of the AAC and direct the ITO to consider the issue in accordance with the law. 9. In the result, the appeal is allowed.
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1980 (3) TMI 116
... ... ... ... ..... alicut (1), and expressly dissented from the view has been taken by the Gujarat High Court in CWT vs. Ahmed Ibrahim Sahigara (2). Similar view has been taken by the Punjab High Court in CIT vs. Vijay Kumar Behal (6), by the Bombay High Court in CWT vs. Keshardeo S.Morarka (7) by the Allahabad High Court in CWT vs. B.K. Sharma (8), and by the Delhi High Court in CWT vs. Giridhari Lal (9). The principle laid down by the Kerala High Court in the above decision, which is binding on this bench of the Tribunal, is equally applicable in the case of a disclosure of income under the Voluntary Disclosure of Income and Wealth Ordinance of 1975 also. According to the above principle the liability to pay tax is one under the IT Act and hence it would be a debt owed on the relevant valuation date. 9. In view of the above decision, we hold that the assessee is entitled the deduction claimed. We, accordingly, direct the WTO to modify the assessment. 10. In the result, the appeal is allowed.
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1980 (3) TMI 115
Assessment Year, Levy Of Penalty, Procedural Law, Revised Returns ... ... ... ... ..... evied have not been correctly quantified. He contended that only the difference between the amounts disclosed in the original returns could be considered as concealed income and penalties are to be levied with reference thereto. It is seen from the orders of assessment that certain disallowances had been made which according to section 271(1)(iii) could not be considered as concealed income. In the event of our holding that the IAC had jurisdiction to levy penalty, we would have directed imposition of minimum penalty computed according to the provisions of section 271(1)(c) at the relevant time. 33. Though we have held that the assessee had concealed income for all the assessment years in the returns filed by him on 12-9-1974 and penalty was exigible, therefor, in view of our finding that the IAC had no jurisdiction to levy penalty by reason of the omission of section 274(2) with effect from 1-4-1976 we cancel the penalties imposed in these cases. 34. The appeals are allowed.
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1980 (3) TMI 114
... ... ... ... ..... tax. It was submitted that this was not projected before the Hon ble High Court of Punjab and Haryana in the case of Saraswati Industrial Syndicate(6). The revenue, however, relied on this judgment. After considering the above position, we find that we are duty bound to follow the judgment of the Punjab and Haryana High Court holding that professional tax is not admissible deduction in computing the business income of the assessee. This ground for the asst. yrs. 1974-75 and 1977-78 is rejected. 16. The only other issue that survives for our consideration is for the asst. yr. 1975-76. This disallowance of Rs. 200 was made by the ITO out of the miscellaneous expenses of Rs. 8155, claimed on estimate. We find that there is no evidence for sustaining this disallowance. This disallowance is deleted. 17. In the result, ITA No. 648 of 1977-78 Partly allowed ITA No. 489 of 1979 Fully allowed ITA No. 490 of 1979 Allowed ITA No. 578 of 1979 Partly allowed ITA No. 579 of 1979 Dismissed.
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1980 (3) TMI 113
... ... ... ... ..... ands reported in 82 ITR 50 and accordingly the orders of the lower authorities for the asst. yr. 1972-73 are quashed. The addition made and sustained by the authorities is directed to be deleted. 11. As regards asst. yr. 1977-78 suffice it to say that in the case of two conflicting decisions of two High Courts, an interpretation favourable to the assessee is called for and for their purpose, we do respectfully apply the ratio of the decision of the Hon ble Supreme Court in the case of Vegetable Products Ltd(4), and do hold that on the facts and in the circumstances of the case in appeal before as interest of Rs. 25,980 and Rs. 1,247 paid to Shri Prakash and Shri Surendra Kumar Maloo in their individual capacities did not called for disallowances under s. 40(b) of the Act and the addition made to that extent is directed to be deleted. For the asst. yrs. 1972-73, the above reasons will also hold good. 12. In the result, both the appeals by the assessee succeed and are allowed.
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1980 (3) TMI 112
... ... ... ... ..... y two authorised representatives, as such necessary documents in support of the return could have been presented for examination by any of the assessee s representative. 7. The assessee being ill, this fact has not been appreciated by the lower authorities that the assessee could not have contacted his authorised representative. More so, the lower authorities have rejected the petition made by the assessee under s. 146 of the Act on flimsy grounds. The order of the lower authorities on this score rejecting the petition made by the assessee under s. 146 of the Act are reversed on the facts and in the circumstances of the assessee s case in appeal before us and we do hold that non-compliance on the part of the assessee was for sufficient and reasonable cause. The appeal by the assessee succeeds and is allowed, the assessment framed under s. 144 of the Act (exparte) shall be taken to have been re-opened by acceptance of the petition made by the assessee under s. 146 of the Act.
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1980 (3) TMI 111
... ... ... ... ..... made on 21st Nov., 1977 between the two surviving partners Shri S.D. Pendese and Shri A.G. Pendese. Now when there is a specific deed of dissolution made by the partners and when they agree to dissolve the firm, it is difficult to accept the Revenue s submission that cl. 14 of the partnership deed would still operate. In other words, as a result of the deed of dissolution made between the legal heirs of the deceased partners and the two surviving partners, the effect of cl. 14 was rendered negatory. That apart, the fact that separate accounts were maintained for two periods is also not disputed on behalf of the Revenue. In other words, not only there was dissolution by an agreement between the legal heir of the deceased partners and the surviving partners, but this agreement was brought into effect by preparing the accounts for two periods. In the light of these facts, it is difficult for us to depart from the view taken by the AAC. 6. In the result, the appeal is dismissed.
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1980 (3) TMI 110
... ... ... ... ..... otices under s. 17 issued for reassessment purposes, he could return the lesser wealth and append a note. The assessee on his own can adopt any course he thinks proper. It appears that he eventually decided to file the returns by appending a note but this act on his part cannot take away the validity of his belief of reasonable cause, if it is established by facts. In this case the assessee has successfully established the uncertainties in his mind which made him delay the filing of the returns till 9th Sept., 70. In any event, we cannot see what benefit the assessee could have gained by delaying the filing of returns unless he was not suffering from the uncertainty pointed out by him. We feel that the assessee had shown reasonable cause for the delay in filing the returns for both the assessment years and there is no justification for levying the two impugned penalties. The penalties are cancelled and the appeals of the assessee are allowed. 7. Both the appeals are allowed.
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1980 (3) TMI 109
... ... ... ... ..... binding authority. The Punjab High Court clearly observes in the last para on page 557 of 101 ITR 539 that the share of the lineal descendants is aggregated with the other estate of the deceased for the purpose of determining the rate of estate duty only and that no estate duty is levied thereon and that the estate duty is levied on the estate which passed or was deemed to pass on the death of the deceased. Following this authority, we hold that the argument of the counsel for the A.P. that the share of the lineal descendants which is not covered by the charging section of the Act, 1953 is subjected to estate duty is without substance. s. 34 does not bring the share of the lineal descendants to tax but it is aggregated in the estate of the deceased only for the purpose of determining the rate of estate duty payable on the property which passed on the death of the deceased. For the reasons, we reject this contention also of the A.P. 4. In the result, the appeal is dismissed.
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1980 (3) TMI 108
... ... ... ... ..... 14, 15, 17 and 19(3) of the Act, We are of the view that the penalty under s. 18(1)(a) of the Act could not be imposed on a dead person or his legal representatives. We entirely agree with the submissions made on behalf of the assessee that the language used in s. 159(3) of the IT Act, 1961 is quite different and the same is not to be found in the WT Act, 1957. Therefore, respectfully following the decision of the Hon ble Andhra Pradesh High Court in the case of Smt. Yawarunnissa Begum, we hold that the penalty imposed under s. 18(1)(a) of the Act in each of the years under appeal was clearly bad in law. 8. Even on merits, from the reading of the assessee s reply dt. 18th, Nov., 1977 (reproduced above), We are of the view that the assessee had reasonable cause for not filing his wealth tax returns on or before the due dates. We, therefore, have no hesitation in cancelling the penalty imposed by the WTO under s. 18(1)(a) of the Act. 9. In the result, the appeals are allowed.
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1980 (3) TMI 107
... ... ... ... ..... lead to a conclusion that when the shares were acquired the motive was not to avoid or reduce any tax liability. We also agree with Shri Kaji that s. 79 withdraws a benefit that is normally available and hence it should be applied only when it is clearly attracted. 10. In this view of the matter we agree with the ld. AAC that condition (b) is not being fulfilled s. 79 is not attracted. We, therefore, dismiss the appeals filed by the Revenue. 11. The cross objections are about the aspect whether unabsorbed development rebate and depreciation should be set off even if s. 79 was attracted. In our view as we have already held that s. 79 is not attracted this question does not arise. In any case, their Lordships in the case of Subhlaxmi Mills (1) have explained the position and that decision has to be followed as long as it stands. In the circumstances we hold that the cross-objections do not arise for consideration and are also misconceived. We dismiss the cross-objections also.
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1980 (3) TMI 106
... ... ... ... ..... unlawful and incorrect and it is necessary to direct the Central Excise authorities to find out whether the prices shown by the petitioners in their price lists are fully commercial prices representing their manufacturing costs and manufacturing profits and, if it is so, to accord approval to them. 8.In the result, the petition succeeds and the impugned orders are quashed and set aside. A writ of mandamus shall issue directing the respondents to determine whether the prices shown by the petitioners in their price list are fully commercial prices representing their manufacturing costs and manufacturing profits irrespective of whether the sole production purchaser is the related person and to accord approval to those prices if it is found that they are fully commercial prices. The respondents are directed to record their determination as directed above, within three months from to-day. Rule is made absolute accordingly with no order as to costs in the circumstances of the case.
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1980 (3) TMI 105
Exports — `Preparation' and `attempt' — Distinction between - `Attempt' - Evidence — Fact inissue — Circumstantial evidence — Words and phrases - Interpretation — Economic offence and smuggling
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1980 (3) TMI 104
Valuation-Air-coolers - Special packing not includible ... ... ... ... ..... For sales to outstation buyers the air coolers which are already pre-packed in alkathene packing are further packed in corrugated cardboard/dealwood packings the cost of which is charged separately in the invoices. 3. The petitioners have contended that the corrugated cardboard/ dealwood packing done for outstation sales was in the nature of secondary packing done for the safe transportation of the goods to outstation buyers. 4. There is considerable force in the petitioners contention. Since the petitioner has made sales locally in alkathene packing and since corrugated cardboard/dealwood packing is done only for outstation sales, Government are of the view that the corrugated cardboard/dealwood packing is in the nature of special packing and the cost of such packing which is involved separately should not be included in the assessable value of air coolers determined under section 4 of the Central Excises and Salt Act, 1944. The revision application is accordingly allowed.
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1980 (3) TMI 103
Appeal posted well in time - Presumption as to receipt ... ... ... ... ..... -limit of 16-3-1978 for filing the appeal. The petitioners have also produced the postal receipt of having despatched a registered letter to the Central Board of Excise and Customs on 9-3-1978 the registered letter in all probability contained their memorandum of appeal. In these circumstances, Government observe that the petitioners are entitled to the benefit of doubt in so far as the actual date of receipt-of the appeal in the Board s office is concerned. Accordingly the appellate order is set aside and the case is remanded to the Central Board of Excise and Customs for its disposal on merits set out in the memorandum of appeal, filed by the party and now on record.
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1980 (3) TMI 102
Proforma Credit - Effect of endorsement ... ... ... ... ..... king from M/s. Danfoss s factory directly to the factory of M/s. Surname Refrigerator Industries. In the circumstances Government are of the view that the ratio of the aforesaid decision of the Government of India should be followed in this case also provided the petitioners prove to the satisfaction of the Assistant Collector of Jurisdiction that the goods in question were removed directly from the manufacturers premises to the petitioners factory without being stocked in the godown of the sole distributor in whose favour the gate passes were originally issued but are stated to have been subsequently endorsed by the sole distributor in favour of the petitioners. 5. The petitioners revision application, too would merit favourable consideration for consequential relief if the Assistant Collector is satisfied that impugned goods had moved directly from the factory of M/s. Danfoss to the petitioners factory and not otherwise. The Revision Application is disposed of accordingly.
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