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1981 (4) TMI 119
... ... ... ... ..... nces does not appear to be sufficient. It is no doubt true that a mere default is not sufficient for the levy of penalty. But as the Commr. (Appeals) had pointed out right from 1973 onwards the assessee had been a defaulter. And the assessee cannot escape its consequences if for a period of seven years, it had kept back the tax deducted at source, one could understand the financial difficulties forcing the assessee to be defaulter for a short period. But the uniform conduct of the party of not paying the tax for several years shows that the default has to be considered seriously. The case relied on in (1980) 123 ITR 611 (Mad) is not relevant because that was a case where the assessee was asked to pay the tax in respect of their income. 3. We, therefore, uphold the finding that the assessee is a defaulter. However, we are of the opinion that a penalty of 300 rupees for each year would be sufficient to meet the ends of justice. 4. In the result, the appeals are partly allowed.
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1981 (4) TMI 118
... ... ... ... ..... CIT(A) passed under s. 154 of the IT Act (actually it should have been s.13 of the Companies (Profits) Surtax Act) relating to the asst. yr.1975-76. The only ground in this appeal states that the CIT(A) erred in holding that the ITO was not justified in deducting the proportionate capital of Rs.......... from the capital base u/r.4 of the Second Schedule of the Companies (Profits)Surtax Act as being attributable to the deduction of Rs......... allowed under s. 80 M. We find that the CIT(A) has followed the Bombay High Court decision in the case of Century Spng. Co and Mfg. Ltd. 1977 CTR (Bom)132 (1978)111 ITR 6 (Bom) wherein it has been held that any deduction allowed under Chapter VII of the IT Act does not attract the provisions of r. 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964. After hearing both the parties on this point, we hold respectfully following the aforesaid authority that the CIT(A) s decision is quite in order and so we uphold the same.
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1981 (4) TMI 117
... ... ... ... ..... aluation certificate has been of furnished by the assessee in respect of the jewelleries belonging to his son as at S.Y. 2030. This valuation is for 40,640 only. And this is the figure included in 2,71,200. So this only 40,640 can be excluded therefrom. 20. Our analysis therefore shows that about 20,000 remains unexplained. We are of opinion that this addition should be sustained. 21. We are unable to accept the Department s intention that the Commr. (A) should not have made adjustments for the increase in the value of jewellery on account of the increase in the price of gold. But we would sustain an addition of Rs. 20,000 on other grounds as we have detailed above. 22. We find no merit in the additions make on the value of the unit trust and national savings certificates. On the face of the certificates, it is clear they were not acquired this year. So they have to be excluded. 23. In the result, the Departmental appeal is dismissed and the assessee s appeal partly allowed.
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1981 (4) TMI 116
Assessment, Service Of Notice ... ... ... ... ..... diction which really belonged to the IAC. Under those circumstances, the Tribunal found, that the assessment made by the ITO suffered from lack of inherent jurisdiction and, so it was a nullity and could not be revived by the AAC. As stated earlier, the facts of the case before us do not involve the validity of any notice conferring jurisdiction. 16. We have already held that the service of notice under section 16(2) by affixation, on 23-7-1979, was quite valid and so the order of the AAC to make the assessments afresh was quite proper. We have also found that even assuming that the notice under section 16(2) was not properly served, even then the directions of the AAC to make the assessments afresh after giving a reasonable opportunity of being heard to the assessee is quite proper, in view of the decision in Guduthur Bros. Hence, we have no hesitation in upholding the order of the AAC for all the 12 years under consideration. 17. In the result, the 12 appeals are dismissed.
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1981 (4) TMI 115
Income From House Property, Deductions ... ... ... ... ..... The interest for the subsequent period, referred to above, may or may not arise, depending upon whether the assessee paid the tax arrears before the property was sold or whether the property was sold sooner or later. The liability to pay interest for the subsequent year will not arise unless and until the default in paying the tax arrears was made by the assessee and in such a case, there cannot be said to be any charge on the property, vide the decision in the case of Metro Theatres Bombay Ltd. v. CIT 1946 14 ITR 638 (Bom.). Further, there must be an existing charge as was held in the case of Sri Bhagwan Radha Krishan Ji v. CIT 1962 46 ITR 741 (All.). Hence, we hold that the attachment order under consideration did not create any charge envisaged under section 24(1)(iv) and so the claim of the assessee has been rightly rejected. 6-9. Paras 6 to 9 are not printed here as they deal with minor issues not covered in the synopsis. 10. In the result, the appeal is partly allowed.
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1981 (4) TMI 114
Deemed Dividend ... ... ... ... ..... says that the matter has to be decided in favour of the assessee. 10. Applying the above principles to the facts of this case, we find that the company in which the assessee was a shareholder did not give any loan to the assessee. In the absence of the phrase directly or indirectly in section 2(22)(e), it is not permissible to read the same into it vide the decision in the case of Nandlal Kanoria v. CIT 1980 122 ITR 405 (Cal.). Further, the assessee-company cannot be said to have any accumulated profits in the very first year of its existence. There is a gap of about three months between the loan by the company to Sameer Finance Corporation and the loan given by the latter to a concern belonging to the assessee and the amounts are also not identical. Under the circumstances, we agree with the Commissioner (Appeals) that the sum of Rs. 70,000 could not be treated as deemed dividend under section 2(22)(e). Hence, we uphold his order. 11. In the result, the appeal is dismissed.
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1981 (4) TMI 113
Gratuity Fund, Gratuity Liability ... ... ... ... ..... on 40A(7). 23. Once a case goes out of the purview of section 40A(7), the other provisions of the Act come into play. The amount under consideration represents a sum determined on actuarial basis that has become payable during the year under consideration towards an approved gratuity fund and so is admissible as deduction under section 36(1)(v) or section 37. In fact, if the provision relates to an approved gratuity fund envisaged under section 36(1)(v), it cannot be hit by section 40A(7) and so its operation is limited to the provisions claimed under section 37 only. The mere fact that the amount in question has not yet been paid, does not stand in the way of allowing the deduction because of section 43(2) and the fact that the assessee was following the mercantile system of account. Under the circumstances, we uphold the decision of the Commissioner (Appeals), on this point and reject this ground. 24. to 26. These paras are not reproduced here as they involve minor issues.
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1981 (4) TMI 112
... ... ... ... ..... the relevant previous year, two separate limits will apply, one in regard to expenditure stated above incurred when he was in service calculated at Rs. 5,000 per month or part thereof another an overall limit of Rs. 60,000 on such expenditure incurred on him, after he ceased to be employee. 39. As in this case, it is the common ground of the parties that the gratuity of Rs. 36,410 is due payable to Shri M, the employee concerned, after he ceased to be in service on retirement, it will be governed by the separate limit of Rs. 60,000 and as the payment does not exceed the limit, no disallowance is called for. Thus the objection of the Department on the point fails. 40. In the result, the appeal is dismissed. 41. Before we part with the case, we take the opportunity of placing on record the considerable and able assistance rendered by Sri. S. E. Dastur, the learned counsel for the assessee and Shri G. S. Bhargawa and Shri T. S. Srinivasan, learned Departmental Representatives.
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1981 (4) TMI 111
... ... ... ... ..... 75, 1975-76 and the same position cropped up for the asst. yrs. 1973-74 and 1974-75 for which the penalty proceedings under s. 271(1) (c) had been dropped by the ld. ITO. In view of the above facts and circumstances, therefore, the mere fact that the Explanation to s. 271 (1) (c) was attracted in this case would not justify the imposition or confirmation of penalty. The explanation given by the assessee is therefore accepted as correct and it does failed doubts the benefit of which can be given to the assessee. We therefore further hold that the presumption of concealment raised on account of the attraction of the Explanation to s. 271(1) (c) in this case had been satisfactorily displaced and rebutted by the assessee. Accordingly this was not a case in which any penalty should have been levied. We would therefore cancel his penalty. 6. In the result the appeal filed by the assessee is allowed and the penalty of Rs.8,120 levied and confirmed against the assessee is cancelled.
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1981 (4) TMI 110
... ... ... ... ..... ubmitted to me that a similar question arose for consideration for the asst. yr. 1974-75 (R.A. No.185/Alld/1979 and for the asst. yr. 1977-78 (R.A. No.182/Alld/1980) and the facts relevant to the point at issue as well as the arguments of both the sides were the same as were before the Tribunal in the reference relating the asst. yr. 1974-75 and 1977-78. 3. I have carefully considered the rival submissions. Following with respect our orders on the reference applications relating to the asst. yrs. 1974-75 and 1977-78 we hold that there is no merit in the application for reference. 4. The application for reference is hereby rejected.
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1981 (4) TMI 109
Seizure - Confiscation - Reasonable belief - Penalty ... ... ... ... ..... t. It is also specifically mentioned in the statement recorded under Section 108 of the Customs Act, of Shri Hari Pada Roy that the applicant had witnessed the handing over of the gold. This fact was also corroborated by Shri Jagdish Prasad Sugandh in his sworn statement recorded immediately after the seizure and he even added that the said gold belonged to Shri Ram Prasad Kulthia. 15.Therefore, Government hold that the applicants have not been able to discharge the burden placed on them under Section 123 of the Customs Act, and the gold is thus rightly held to be smuggled. Further, as main activities took place at applicant s shop, in his presence he is held to be involved in dealing with the said smuggled gold. 16.For the aforesaid reasons, Government hold that gold has rightly been confiscated under Section 111(d) of Customs Act, 1962 in this case and penalty also rightly been imposed on the applicant. 17.In the result, revision application being without merit is rejected.
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1981 (4) TMI 108
Baggage - Personal baggage - Confiscation - Writ jurisdiction - Alternative remedy ... ... ... ... ..... ly submits that the Public Notice (Exh. C) provides in paragraph 5 that the value limits set out in paragraph 3 shall not apply where a passenger imports a single article other than a fire-arm or ammunition. Shri Mehta submits that Video Cassette Recorder and Video Cassette Tapes are two different items and therefore the total value of Rs. 2000/- provided under paragraph 2 of the Public Notice would be violated. I find no merit in this submission, and the submission is only required to be stated to be rejected. In my judgment, the Department was clearly in error in confiscating the Video Cassette Recorder and 13 Video Cassette Tapes imported by the petitioner. 5. Accordingly, the petition succeeds and the rule is made absolute and the respondents are directed to release, within a period of 8 days from today, the Video Cassette Recorder and 13 Video Cassette Tapes of the petitioner on levy of duty prevalent on June 27,1979. The Respondents shall pay the costs of the petition.
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1981 (4) TMI 107
Export - Cash subsidy ... ... ... ... ..... etition by prayer (a) of the petition. The petitioners claim that the order passed by respondent No. 1 (Collectively) should be set aside and the respondents Nos. 1 to 3 be directed to grant cash compensatory support. Shri Dhanuka submits that it would be necessary to compute the amount of cash assistance which the petitioners are entitled to and the relief cannot be straightway granted in this petition. The submission of the learned Counsel is correct. The petitioners are entitled to the cash compensatory support at the rate of 15 of the F.O.B. value of the export of absorbent cotton uncarded made by them and specified in the petitioners application to the Government of India, a copy of which is annexed as Ex. J collectively to the petition. The respondents Nos. 1 to 3 shall compute the amount and pay the same to the petitioners with a period of three months from today. 8. The rule is made absolute accordingly. The petitioners are also entitled to the costs of the petition.
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1981 (4) TMI 106
Appellate order - Effect on subsequent assessment ... ... ... ... ..... he petitioner. 4. I am of the opinion that this contention has to be given effect to. Once the appellate authority has stated that the Notification No. 128/77 does not provide for the production of a certificate, the petitioner cannot be found fault with for non-production of such a certificate. Further, as per the order of the appellate authority, enquiry has not been conducted to determine the installed capacity of the petitioner. Nothing prevents the assessing authority from doing so and then deciding whether the petitioner is entitled to any exemption and if so to what extent. In this view of the matter, the writ petition has to be allowed. 5. It is made clear that this order is passed on the basis of the order of the appellate authority dated 16-10-1980. If in future the said order is set aside according to law, it would follow that the assessing authorities will be entitled to pass orders afresh after notice to the petitioner. 6. The Writ Petition is allowed. No costs.
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1981 (4) TMI 105
Molasses - Liability to duty - 'Manufacture' - Excise duty - Site plan approved - 'Removal' - Connotation of - Taxable event - 'Issued' and 'removal' - Distinction between
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1981 (4) TMI 104
Acetylene gas is not goods - Liability to duty - Intermediate products ... ... ... ... ..... have no application in case of coming into existence of an intermediate product in a continuous intergrated and uninterrupted process of manufacture of final product. The petitioners are entitled to succeed on this count. The conclusion of the authorities that the petitioners have manufactured acetylene gas attracting the duty under Tariff Item No. 14H (vi) is entirely incorrect and the petitioners are entitled to the relief. As the petitioners succeed on the first contention, it is not necessary to deal with the two other submissions urged by Shri Desai in support of the petition. 11. Accordingly, the petition succeeds and the rule is made absolute in terms of prayers (a), (b) (i) and (b) (ii) save and except that the petitioners would not be entitled to claim any amount of interest on the amount of refund of excise duty. The respondents shall refund the excise duty within period of one month from today. In the circumstances of the case, there will be no order as to costs.
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1981 (4) TMI 103
Confiscated goods cannot be reconfiscated - Jurisdiction for suo moto revision ... ... ... ... ..... ies provided are only in the nature of imprisonment, or fine, or both. Confiscation of the goods involved in the crime is not a punishment which is prescribed under the aforesaid section. Confiscation of articles is otherwise permissible under Section 111 of the Customs Act, 1962 but that alone by a proper order of the Customs Authorities. Here undisputably the Customs Authorities had before hand taken proceedings under Chapter 14 of the Act and confiscate the goods. A new confiscation of the same goods in favour of the Punjab State was wholly unwarranted and without jurisdiction. The goods were not available requiring an order of disposal by the Court. Such being the position, this Court can interfere to rectify the mistake. 4. As a sequel to the aforesaid discussion, this petition is allowed and paragraph 16 of the judgment of the trial Magistrate dated 21-12-1979 is ordered to be deleted otherwise qua the remaining the order remains uninterfered with. Ordered accordingly.
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1981 (4) TMI 102
Regulatory duty-Exemption ... ... ... ... ..... ith respect, we are inclined to agree with the view taken in that case. 13. The plain wording of the notifications indicates that from the excise duty leviable certain deductions are to be made. We do not see how the notification could be interpreted as applicable only in cases where the excise duty is reduced from the wholesale price and the benefit of exemption is passed on to the consumers. As already pointed out the number in which the exemption notification is interpreted by the excise authorities involves the application of the notification twice, while the method adopted by the petitioners in the writ petitions is a simple method giving due effect to the notification which provides for deduction of the portion of the excise duty from .the total liability for Excise duty. In this view of the matter, the writ appeal is dismissed and the writ petitions are allowed and the rule nisi issued in each of the writ petitions is made absolute. There will be no o der as to costs.
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1981 (4) TMI 101
Electric fans ... ... ... ... ..... n technical as well as common parlance. The Government further observe that the manufacturers themselves had described the goods as blower fans which testifies the identity of the goods in the trade. 7. In view of the above, the Government observe that blowers and exhaust fans are technically as well as in common parlance are treated as fans and further that even in the trade parlance the impugned goods are identifiable as fans as revealed from the description given by the manufacturers themselves. The Government further observe that the impugned goods were admittedly designed for use in an industrial system. 8. In the light of the above observations, the Government hold that the blowers and exhaust fans in question which are connected to the electric motor by means of a V-Belt are electric fans classifiable under item 33(2) of Central Excise Tariff. Accordingly, the Government set aside the order-in-appeal and restore the order-in-original passed by the Assistant Collector.
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1981 (4) TMI 100
Proforma credit - Admissible from the date of application - Procedure ... ... ... ... ..... om the date of the notification and that the Government had acted very rationally in granting the permission and the petitioner there would not be entitled to any further relief. The order of the Central Government granting the petitioner their permission under Rule 56A of the Rules from the date of the application was upheld. I cannot see any justification on the part of the Central Government in not conceding this writ petition by saying that the petitioner could avail of the exemption from July, 1967 instead of August 31, 1967. 11. For the above reasons, the writ petition succeeds. The impugned notice of demand and the subsequent orders are quashed. The respondents are directed to work out the exemption for the period from July 21, 1967 to August 31, 1967 on the strength of the records already maintained by the petitioner and then refund the amount of the excise duty realised from the petitioner. On the facts and the circumstances of the case, I make no order as to costs.
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