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Case Laws
Showing 61 to 80 of 203 Records
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1981 (8) TMI 174
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... ... ..... able prospect of recovering the amounts embezzled by the bank, trading loss in a commercial sense may not be deemed to have resulted. I may point out that though a complaint was lodged with the police as back as 5th June, 1977, the police till today have not been in a position to arrest the accused nor recovered any amount from the said culprit. Therefore from the observation of the Supreme Court, it is thus clear that there is hardly any recovery possible from the culprit as his hereabouts are not known to the police D Department, much less to the knowledge of the assessee. One important aspect of the matter cannot be forgotten that the partner of the assessee firm is not keeping well and that is how culprit took and undue advantage of his illness and confidence reposed in him. He misappropriated the amounts. This aspect of the matter should also be considered by the AAC while dealing with the assessee s claim. Accordingly, the appeal of the assessee is deemed to be allowed.
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1981 (8) TMI 173
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... ... ..... of revenue that IAC is not divested of jurisdiction by subsequent amendment are 1975 CTR (Mad) 162 (1975) 100 ITR 170 (Mad), (1976) 105 ITR 518 (Guj), (1977) 107 ITR 753 (Guj), (1980) 122 ITR 301 (Guj), (1978) 114 ITR 905 (APPEAL), (1980) 14 CTR (P and H) 138 (1980) 121 ITR 405 (P and H). The contrary decisions in favour of the assessee to the effect that IAC is divested of jurisdiction by subsequent amendment are 1977 CTR (Ori) 142 (1978) 113 ITR 196 (Ori), (1979) 117 ITR 319 (All), (1981) 128 ITR 547 (Kar) and decision of this Bench dt. 24th April, 1978 in ITA No. 693/PN/76-77. As the judicial opinion on this question is clearly divided and therefore two views are possible, we have to prefer the view in favour of the assessee. We would accordingly hold that IAC did not have jurisdiction to levy penalty after amendment of s. 274 w.e.f. 1st April, 1976. Thus the IAC impugned order dt. 7th Aug., 1980 is without jurisdiction and is vacated. 11. In the result, appeal is allowed.
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1981 (8) TMI 169
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... ... ..... rial fact weighed with the CWT (A) and rightly. Even in the confirmatory decree it was given effect to the partition orally made on 2nd Oct, 1960 and that the properties were divided accordingly. Number of properties we held by Shri S.M. Raut in his capacity as an individual and not as a member of HUF. So also the house property at Sadashiv Peth and certain land and share (having regard to six sons) Shri G.M. Raut was unhappy and he started litigation and made a point that there was no partition in the year 1960 and that all the properties were jointly held and enjoyed by the three co-parceners. 11. We have gone through the authorities relied upon by both sides and we hold that (1966) 63 ITR 416 (SC) helps the case of the assessee and that on considering the facts before us, we hold that there was a partition and that 1960. Therefore order of CWT(A) do not requires interference at our hands, they are upheld. We agree with his reasoning. The departmental appeals are dismissed.
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1981 (8) TMI 165
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... ... ..... 1976-77 disallowed Rs. 15,000 which had been allowed by the AAC on appeal. 8. This issue has been discussed above for the asst. yr. 1976-77 and it has been held that the expenditure incurred on drags was revenue expenditure. Hence the AAC was justified to delete the addition of Rs. 15,000. 9. In the cross objection the assessee has taken the ground that the Department was not justified to file combined appeal. This point was verified in course of the argument and the Department has cured the irregularity committed earlier. Further, the assessee has claimed that the relief of Rs. 1,000 each should be allowed in the asst. yrs. 1976-77 and 1977-78 on the ground of disallowance out of drag expenses. The total drag expenses claimed by the assessee had been allowed in full and, therefore, there is no merit in the cross objections of the assessee. 10. In the result, the Deptl. appeals are allowed for statistical purposes, whereas, the cross objections of the assessee are dismissed.
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1981 (8) TMI 164
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... ... ..... to Rs. 18,651. The ld. counsel for the assessee has also filed a copy of the assessment order for the asst. yr. 1975-76 relating to the assessee which shows that the ITO calculated the total loss of Rs.16,637. As it is a legal issue and no additional evidence was required, we have allowed the ld. counsel for the assessee to argue ground No. 6 in the asst. yr. 1976-77 although the ld. Deptl. Rep. has submitted that ground No. 6 did not arise out of the order of the CIT (A). The ITO has not mentioned as to why the loss of Rs. 16,637 determined in the asst. yr. 1975-76 was not carried forward in the asst. yr. 1976-77. We, therefore, direct the ITO to decide this issue about the carry forward of the loss determined by him in the asst. yr. 1975-76 to the asst. yr. 1976-77. Accordingly, we allow ground No. 6 of the assessee in the asst. yr. 1976-77 on the lines indicated above. 14. No other grounds have been pressed before us. 15. Both the appeals are, accordingly, allowed in part.
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1981 (8) TMI 163
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... ... ..... in these years. In these years only book entries about the credit balances of the parties are appearing in the books. But the book entry will not bring fund for the utilisation of the assessee. The fact is that the interest was allowed for the asst. yr. 1972-73 by the ITO on his satisfaction that the loans taken by the assessee were genuine and they were utilised for the purposes of the business of the assessee. Once the amounts were utilised during the asst. yr. 1972-73, the same fund cannot be utilised in the shape of loan in any other years unless the loan is refunded back and is taken again. Under the above circumstances, this question that the loans had both been utilised during the years under appeal appears to be infructuous. As the points raised by the Deptl. Rep. had full been clarified above, the findings of the AAC though on different reasoning are maintained. 11. In the result, the Deptl. appeals are dismissed and the cross objections of the assessee are allowed.
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1981 (8) TMI 162
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... ... ..... stimate of the AAC was very excessive. The Deptl. Rep. on the other hand, very strongly supported the estimate of the AAC and urged that the assessee furnished rooms on 4th and 5th floors and, therefore, the cost estimated at Rs. 40,000 by the AAC was fair and the same should be maintained. 13. The assessee maintained books of account. The expenditure incurred by the assessee on furnishing rooms on 4th and 5th floors had duly been debited in the books of accounts of the assessee. However, an Inspector has visited the place and has estimated the investment of Rs. 45,500, which has been reduced to Rs. 40,000 by the AAC. Even if the report of the Inspector is partially accepted as correct, the investment estimated by the AAC appears to be little excessive which is restricted to Rs. 34,000. 14. Other grounds of the appeal were not pressed by the assessee The ITO directed to modify the assessments of the assessee and its partners. 15. In the result, the appeals are partly allowed.
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1981 (8) TMI 157
Appeal To AAC, Limitation ... ... ... ... ..... tive assessment is made, assessment proceedings against the party ultimately found to be liable may become time barred but the department cannot recover the tax from both the assessee in respect of the same income. Therefore, even though the income was assessable under section 64(1)(iii), unless the ITO was sure that the income earned by the minor had been subjected to tax in the hands of the guardian, it was open to him to assess the income on protective basis and the assessee was not to suffer as both demands from the minor and the guardian could not be recovered from the same income. Therefore, even on merit, the AAC was not justified to annul the assessment made by the ITO. The order of the AAC is set aside and the protective assessment made by the ITO is maintained. As the appeal of the department is allowed, there is no force in the cross-objection of the assessee. 8. In the result, the departmental appeal is allowed and the cross-objection of the assessee is dismissed.
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1981 (8) TMI 154
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... ... ..... ovisions appears to us a reasonable one also bearing in and s. 5(1A) was to widen the area of investments in financial asset. The shares held by the assessee fully satisfy the conditions stipulated in s.5(1)(xxiii). On the other hand the department s plea is that sub-cls. (xx) and (xxiii) are mutually exclusive and once the assessee has enjoyed exemption under s.ub-cl(xx), such shares would fall outside the pale of sub-cl. (xxiii). No authority to support this proposition is placed before us. In any event if two interpretations are possible the one which is favourable to the assessee will have to be adopted, having regard to the ratio of the Supreme Court decision in CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177 (1973) 88 ITR 192 (SC). We would, therefore, hold that the assessees in question are entitled to exemption in respect of their share holdings under s. 5(1)(xxiii) r/w s. 5(1A) for the assessment years in question. In the result, the assessee s appeals are allowed.
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1981 (8) TMI 153
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... ... ..... modern purposive approach is to consider the policy behind the enactment (d) to avoid wholly unreasonable result and to actualise obvious intentions of the legislation, the proper construction of the section is to read it as enabling the disallowance of the expenditure incurred after 1st April, 1976 (e) this construction is consistent with the provisions of the Act and the definition of interest (f) two constructions of the section being possible, we are bound to adopt that which is in favour of the assessee. In the circumstances, we are of the considered opinion that the provisions of s. 40A(8) could be applied only for disallowance of interest incurred after 1st April, 1976 and since in the present case the expenditure was incurred prior to that date, the disallowance was not warranted. 20. We, therefore, reverse the orders of the authorities below and direct the ITO to recompute the income after deleting the addition of Rs. 37,427. 21. In the result, the appeal is allowed.
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1981 (8) TMI 150
Business Expenditure ... ... ... ... ..... e Government in its trading wing. Both are activities of the same Government. So this expenditure incurred by a public sector undertaking is not incurred wholly and exclusively for the purpose of business. If the assessee were in the private trade, very likely we would have allowed the expenditure under commercial expediency. But that does not exist for a public sector undertaking. These contributions made by a public sector undertaking as a trading concern do not contribute either to the benefit or the non-contribution or non-co-operation to the detriment of the business of the assessee. But similar contributions by private trade may very likely be to the benefit of the business and non-contribution and non-co-operation to its detriment. That is the distinction we make between the private trade and public sector undertaking, to which class this assessee belongs. We agree in full with the reasonings and conclusions of the income-tax authorities. 3. Both appeals are dismissed.
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1981 (8) TMI 148
Income, Accrual Of ... ... ... ... ..... oreover, the declaratory Act is made to remove existing doubts as to the meaning or effect of a statute and, therefore, declares the law as it is and as it had been from the date of its commencement. This principle equally applies to the notification declaring the intention of the Government to treat the salaries paid by Commonwealth Secretariat on a par with the salaries paid by the United Nations. If the revenue had any doubts about the real intention of the Government, one would have expected the revenue to have obtained the clarification from the Ministry of External Affairs and after ascertaining the real intention taken up a specific ground of appeal supported by the clarification from the External Affairs Ministry. We do not think we should allow the revenue to deny the immunity specifically granted by the Government in this offhand fashion. 4. We, therefore, see no reason to interfere with the order of the AAC and the Commissioner (Appeals). The appeals are dismissed.
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1981 (8) TMI 147
Capital Or Revenue Receipt ... ... ... ... ..... he wants an extra pound 500 and they agree to pay it. In such a case, the pound 500 is not a payment for his services as an organist for seven months. It is a payment for relinquishing what he considered to be an advantage to him . It was held that such a payment for giving up an advantage was a capital sum for there was a permanent asset in his hands. In the same way, the value received by encashment of unavailed earned leave is a payment received for giving up an advantage and is, therefore, a capital receipt and not income which could be taxed under the Income-tax Act. In this view, it is unnecessary to consider the ground of appeal of the revenue that relief under section 89 should not have been granted. We, therefore, set aside the orders of the authorities below and direct the ITO to recompute the total income after excluding the amount of Rs. 12,823 which is a capital receipt and not income. 5. In the result, the cross objection is allowed and the appeal is dismissed.
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1981 (8) TMI 146
Capital Gains ... ... ... ... ..... ion is that the words land appurtenant thereto has been utilised in the section to mean the lands which are taken as a unit along with the house. From this point of view there is no scope of bifurcating the land which formed a unit along with the building as a portion appurtenant to the building and a portion which is not. Apart from all these, a reference to the sketch or the property makes it amply clear that the land forms one unit with the house and out-house which are built in such a way as to have only strips of land surrounding them and formed one unit with the result that no part of the strips of land surrounding the building could have any independent value other than being appurtenant to the house. 4. We are, therefore, convinced that the AAC was right in granting relief under section 54 in respect of the entire capital gains arising from the sale of the property treated as one unit. We have, therefore, no hesitation in confirming his order. The appeal is dismissed.
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1981 (8) TMI 139
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... ... ..... s that the dividend income can only be assessed with the financial year as the previous year and not according to the previous year of the choice of the assessee. But this contention is untenable in view of the decision of the Andhra Pradesh High Court in the case of Addl. CIT vs. K. Ramachandra Rao (1981) 20 CTR (AP) 60 (1981) 127 ITR 414 (AP) where it was pointed out that u/s 3(3) an assessee may have different previous years in respect of each source of his income and the adoption of the pervious year is at the choice of the assessee. On the facts of the present case, when the assessee had admittedly maintained the accounts for dividend income also adopting the year ended June as the previous year and had also been assessed on that basis for earlier assessment years, there is no warrant for the ITO to disturb the previous year for dividend income alone. In the circumstances, we see no reason to interfere with the order of the AAC. 4. In the result, the appeal is dismissed.
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1981 (8) TMI 138
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... ... ..... in the hands of that HUF. As a consequence that income cannot be assessed in the hands of the divided members of that HUF. In the circumstances, the action of the ITO in assessing the income from the property in the hands of the branches of the joint family is inconsistent with the order passed u/s 171 which did not recognise the partition of the house property. As long as that order u/s 171 stands, the income from the property cannot be treated as belonging to the branches because it is to be treated as belonging only to the HUF which is deemed to continue. Therefore, even though the assessee had returned such income their claim to exclude the same from the total income has to be accepted. We, therefore, reverse the order of the authorities below and direct the ITO to recompute the total income of the assessee after excluding the income from house property which was not recognised as partitioned amongst the members of the main HUF. 5. In the result, the appeals are allowed.
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1981 (8) TMI 137
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... ... ..... oceedings in the same letter. Since we find that there was no failure on the part of the assessee to disclose any material fact then the only plea of the revenue that survives is that a reassessment could be made u/s 17(1)(a) the escapement must be the consequence of the assessee rsquo s failure to disclose material facts and not a consequence of any omission on the part of the WTO to take note of such facts. Though the order of reassessment quotes s. 17 as the source of power, we are satisfied that it cannot have recourse to s. 17(1)(a) and must, therefore, be considered only by a reference to s. 17(1)(b). That being the position, the reassessment made beyond four years form the end of the assessment year is barred by limitation as one made u/s 17(1)(b) of the Act. Thus, the reassessment is unsustainable either u/s 17(1)(a) restored. In the circumstances, whatever be the view on merits, the conclusion of the AAC has to be confirmed. 5. In the result, the appeal is dismissed.
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1981 (8) TMI 136
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... ... ..... g the pendency of litigation was subject to the hazards of litigation as pointed out by the Supreme Court in the case of Mrs. Khorshed Shappro Chenai vs. Asstt. CED, A.P.(1989) 14 CTR (SC) 356 (1989) 122 ITR 21(SC). As the CWT had cancelled the assessments on the ground that the asset itself did not exist before the litigation ended, he had no occasion to value the asset. Since we find that the asset did exist from the asst. yr. 1969-70 onwards, the valuation of that asset has to be gone in to. We therefore, deem it fit to set aside the orders of the CWT for the asst. yr. 1969-70 to 1974-75 and restore the appeals to his file for fresh disposal in accordance with law. For the asst. yr. 1967-68 and 1968-69, however, we decline to interfere with his order. In the result, appeals 189 and 190 are dismissed and 191 to 194 and 370 and 371 are treated as allowed. 6. Since no relief against the order of the CWT (A) has been asked for the cross objections are dismissed as incompetent.
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1981 (8) TMI 129
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... ... ..... inion, does not create an enduring right. It was made for securing a mere tenancy and not for acquiring the property. In Ramakrishna and Co. vs. CIT (1973) 88 ITR 406 (Mad) the assessee had acquired a lease of a cinema theatre for a period of four years with a right to renew for a further period of two terms of four years each. Along with the premises the assessee also received the rights under a licence for exhibiting cinema films issued to the lessor. It is under these circumstances that the Madras High Court had held against the tax payer. Facts in assessee rsquo s case are more comparable to the facts in the case of CIT vs. S.B. Ramakrishnan (1969) 74 ITR 761 (Mad) where the payment was made to the landlord for obtaining lease of premises. This was found to be deductible. There is no reason why a different view should be taken in assessee rsquo s case, where the payment is actually to a third party and the tenancy is at will. In the result, the Deptl. Appeal is dismissed.
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1981 (8) TMI 127
Deductions, Winnings From Lotteries ... ... ... ... ..... a loser. If the subscribers have purchased a chance of winning a prize, the scheme would be a lottery, whether the prizes are paid circuitously from the interest earned on the subscribers, contributions or are paid directly from those contributions . In the circumstances, it is not possible to agree with the contention of the revenue that the prize received by the assessee could not be regarded as winnings from a lottery as contended by the assessee. It follows that the AAC was right in allowing the deduction under section 80TT, in respect of the amount obtained by the assessee as lottery winnings. Though the assessee had taken a ground before the AAC that the receipt was capital in nature, it appears that it was not pressed and is not raised before us either. Therefore, we confine ourselves to the question of deduction under section 80TT, on the undisputed basis that the amount is taxable as income. We, therefore, confirm his order. 4. In the result, the appeal is dismissed.
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