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Case Laws
Showing 81 to 100 of 234 Records
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1982 (3) TMI 161
Interest On Borrowed Capital ... ... ... ... ..... siness purposes but the subsequent surplus cash is not applied for the repayment of the loan, interest would not be allowable under section 36(1)(iii), is not acceptable. It is now well settled that where an assessee borrows money for the purpose of its business and has also capital, any subsequent withdrawal for his personal use would be presumed to be out of his capital and would not entitle the department to disallow a part of the interest paid in the absence of evidence to show a direct link between the borrowing and personal use---CIT v. Gopikrishna Muralidhar 1963 47 ITR 469 (AP). 3. In the circumstances we are of the view that there is no justification for the disallowance of interest. 4. The assessee s next ground is that the AAC failed to consider the additional ground before him on 1-3-1980, regarding the property income. This point does not arise out of the AAC s order. It is open to the assessee to approach the AAC for redress. 5. The assessee s appeal is allowed.
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1982 (3) TMI 160
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... ... ..... es not depend on the quantification of the liability by assessment. We agree with the Commissioner (Appeals) that the gift-tax liability is a debt owed on the relevant valuation dates. The liabilities for gift-tax attaches as soon as the gift is made, though its quantification by assessment would necessarily take place after the close of the relevant accounting year. In the present case, the gifts in question were made long before the valuation dates, though the gift-tax assessments were pending as on the valuation dates under present consideration. The liability for gift-tax is, therefore, deductible. Our above view is supported by the Punjab High Court decision in Raja Sir Harinder Singh Brar Bans Bahadur v. WTO 1967 64 ITR 394 and the Gujarat High Court decision in CWT v. Kantilal Manilal 1973 88 ITR 125. This ground is hence, rejected. 6. This para is not reproduced here as it deals with a minor issue not covered in the synopsis. 7. The departmental appeals are dismissed.
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1982 (3) TMI 156
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... ... ..... hand the 1d. Dept1. Rep. Supported the AAC s order. 3. On a careful consideration of the rival submissions, we are of the view that that is a case where levy of penalty is not justified. The assessee in its covering letter has made it clear that the income returned by it was an estimated one with reference to the records available and the assessee has also admitted that it had no objection to the department making a correct assessment. It has been held by the Supreme Court in Amwar Ali s case (1970) 76 ITR 696 (SC) that penalty under s. 271(1)(c) can be levied only if it is established that the assessee had consciously concealed that particulars of its income and had deliberately furnished inaccurate particulars thereof. In a case like the present one where the assessee itself has resorted to estimate also putting the ITO on notice regarding the position, we are of the view that penalty would not be attracted. It is accordingly cancelled and this assessee s appeal is allowed.
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1982 (3) TMI 154
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... ... ..... e of the view that the multiple 12 times as applied by the assessee has to be accepted. The WTO is, therefore, directed to recompute the value taking the multiple 12 times. 2. The only contention regarding the self-occupied property of Shri Ranka is that in view of section 7 (4) of the Wealth-tax Act, 1957, the same value should be taken for the subsequent years as was adopted for the assessment year 1971-72. In several cases, this bench has held that section 7 (4) is retrospective in operation. We, therefore, agree with Shri Ranka that the value of self occupied property as taken for the assessment year 1971-72 has to be adopted for the subsequent years. We, therefore, direct the WTO to adopt the same for the self-occupied property for subsequent years as was taken for the assessment year 1971-72. 3 .Shri Ranka has not pressed his contention regarding value of the land relating to the assessment years 1970-71 and 1971-72. . In the result, the appeals are accordingly allowed.
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1982 (3) TMI 152
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... ... ..... building being taken on income capitalisation method will cover the value of the whole asset. Meaning thereby, the cinema building as well as the entire land. The assessee showed the value for the asst. yr. 1975-76, then the one as worked out by the valuation cell on income capitalisation method, we may accept the declared value without any hesitation. We, therefore, hold that for asst. yr. 1975-76 the value of the whole assets, meaning there by, the Cinema and the land will be taken at Rs. 8,23,000. Since for the asst. yr. 1974-75, the Tribunal already determined the value of such asset at Rs. 7,43,802 we hold that the value for the asst. yr. 1973-74, cannot in any case exceed the value taken for the asst. yr. 1974-75. So by the token of the Tribunal rsquo s order dt. 28th Jan., 1980, we fix up the value of this asset for the asst. yr. 1973-74 at Rs. 7,43,802. 12. In the result, both the appeals of the assessee are partly allowed and the appeals of the revenue are dismissed.
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1982 (3) TMI 151
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... ... ..... tum appeals and there is difference of opinion amongst the Members on the Miscellaneous Application, we are of the opinion that part of the demand should be stayed in the peculiar circumstances. Taking into consideration all the facts as pointed out above, we stay demand of Rs. 85,919 for the asst. yr. 1975-76 till the decision of the third Member on the Miscellaneous Application. The balance of the unpaid demand of Rs. 1,21,838 for the remaining two years, i.e. 1973-74 and 1974-75 shall be paid by the assessee. The assessee shall furnish adequate securities for the demand stayed till the decision of the 3rd Member to the satisfaction of the WTO. If the assessee failed to pay the demand of Rs. 1,21,838 by 31st May, 1982 the stay shall stand automatically vacated. As pointed out above, we have granted this stay taking into consideration the peculiar circumstances of the case. This would not, however, from the precedent. 5. In the result, the Stay Application is partly allowed.
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1982 (3) TMI 150
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... ... ..... business will not determine the principal or the subsidiary business. The business started in the beginning cannot be said to be the principal business and the business started later on cannot be labelled as subsidiary or ancillary one. In my view, the authorities below failed to appreciate the facts of the case in the right prospective. It is not a case where the assessee started the business of manufacture without the intention of carrying on such business. The assessee did start the business of manufacture with the intention to carry on the same but as the product was found to be unmarketable, the manufacturing was discontinued. On these facts, it cannot be said that the machinery was not installed for the purposes of business of manufacture. For the reasons, I hold that the assessee is entitled to initial depreciation as it carried on the business of manufacture during the year under appeal though n a small and for a small period. 3. In the result, the appeal is allowed.
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1982 (3) TMI 149
Rectification Of Mistakes, Apparent From Record ... ... ... ... ..... d, therefore, the entire value of the property should have been exempted and orders rectified under section 35. The learned departmental representative, on the other hand, supported the orders of the AAC. 2. We have given a careful consideration to the rival submission. It is a common ground between the parties that deduction under section 5(1)(iv) is admissible in respect of a house, whether used for self residence or for commercial purpose. The deduction under section 5(1)(iv) is also statutory inasmuch as this section lays down that wealth-tax shall not be payable by an assessee in respect of one house or part of a house belonging to the assessee. This, in our opinion, is a mistake of law apparent from record and should have been rectified by the WTO. Under the circumstances, we are unable to sustain the orders of the authorities below. The WTO is directed to rectify the orders under section 35 and allow necessary relief. 3. In the result all the three appeals are allowed.
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1982 (3) TMI 148
Valuation Of Assets ... ... ... ... ..... lue to Rs. 2,66,000 as was determined by him for the assessment year 1971-72. The revenue is aggrieved against the value fixed by the Commissioner (Appeals). The learned departmental representative has relied upon the order of the WTO. The learned counsel of the assessee, on the other hand, has relied upon the order of the Commissioner (Appeals) and has further submitted that in view of the Board s circular, the value once declared should not be disturbed for the next 2 years unless there were extenuating circumstances to disturb the same. He submitted that no such circumstances have been pointed out by the WTO and, therefore, the order of the Commissioner (Appeals) deserves to be sustained. We are in agreement with the learned counsel of the assessee. In view of the Board s circular the value fixed at Rs. 2,66,000 by the Commissioner (Appeals), in our opinion, is reasonable and no interference with his order is called for. 5. In the result all the five appeals are dismissed.
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1982 (3) TMI 147
Depreciation, Initial Depreciation ... ... ... ... ..... s will not determine the principal or the subsidiary business. The business started in the beginning cannot be said to be the principal business and the business started later on cannot be labelled as subsidiary or anciliary one. In my view, the authorities below failed to appreciate the facts of the case in the right perspective. It is not a case where the assessee started the business of manufacture without the intention of carrying on such business. The assessee did start the business of manufacture with the intention to carry on the same but as the product was found to be unmarketable, the manufacturing was discontinued. On these facts, it cannot be said that the machinery was not installed for the purposes of business of manufacture. For the reasons, I hold that the assessee is entitled to initial depreciation as it carried on the business of manufacture during the year under appeal, though on a small scale and for a small period. 3. In the result, the appeal is allowed.
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1982 (3) TMI 146
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... ... ..... both the sides and going through the papers place before us, it is seen that there is force in the submissions made on behalf of the assessee. The assessee has given a written reply to the show-cause notice which was noted by the ITO who did not discuss any part of the submissions as it could be apparent from the penalty order, from the order of the AAC certain facts transpired that the delay was due to the counsel s default. Even the AAC did not ask the assessee to produce any material to support the submissions made before rejecting the contentions made before him. Atleast, this has not been shown to have been done. Having regard to the facts of the case, we are of the opinion that the penalty has been imposed without bringing adequate materials and facts on record and we find no application of the mind by the ITO in the present case. The order of the AAC impugned before us cannot be sustained which we hereby cancel. 6. In the result, the appeal by the assessee is allowed.
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1982 (3) TMI 145
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... ... ..... orted in (1980) 126 ITR 333 (Bom.) in which a similar claim of the assessee was allowed. It is submitted, therefore, that the admissible relief claimed under s. 80J should be allowed. 9. The revenue, on the other hand, resists the submissions while contending that the ratio of the decisions relied on by the assessee is not applicable as in those cases the claim was made before the lower authorities, while in the present case the assessee did not raise this point before the ITO even. It is submitted that this claim of the assessee should be rejected. Having regard to the rival contentions of both the sides and having regard to the facts of the case, with reference to the decisions relied on behalf of the assessee,. We feel that in the interest of justice this point may be examined by the AAC after giving reasonable opportunity to both the sides and to dispose of the claim of the assessee in accordance with law. 10. In the result, the appeal is allowed for statistical purposes.
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1982 (3) TMI 144
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... ... ..... fact that in the business a turnover has gone down considerably, certain reliefs are called for. It may be mentioned that the assessee has disclosed a GP of 19.8 per cent and 21.5 per cent for both the years under appeal. We consider that it would be fair and reasonable to apply a GP rate of 20 per cent for the asst. yr. 1975-76 also on the estimated sales of Rs. 3,40,000. For the second year under appeal the GP rate disclosed by the assessee was 21.5 per cent on the total turnover of Rs. 4,31,929. Having regard to the particular line of business carried on by the assessee and in view of the facts as discussed briefly in the preceding paragraphs, we are of the view that it would be proper and reasonable to apply a GP rate of 22 per cent on the estimated sales of Rs. 4,40,000. The ITO would please work out the relief admissible to the assessee accordingly. Consequential relief to the partners may also be given. 5. In the result, the appeals by the assessee are partly allowed.
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1982 (3) TMI 143
Assessment Year, Civil Court, Land Acquisition, Right To Receive Compensation, Valuation Date
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1982 (3) TMI 142
Civil Court, Net Wealth, Valuation Date ... ... ... ... ..... lakhs. If the figure of Rs. 88,000 is aggregated with the figure of Rs. 1.38 lakhs, we arrive at a figure of Rs. 2.26 lakhs. We consider that taking the value of the land at Rs. 2.25 lakhs in round figures would take into consideration all the factors, viz., the depressing effect of the notification as also the point urged by the learned departmental representative that what we have to take into consideration is land value because the asset was a land in question. We would direct the WTO to make a recomputation by excluding from the wealth returned the element of the value of land, i.e., Rs. 1.06 lakhs in 1969-70 and Rs. 1.44 lakhs in 1970-71 and include thereafter the value of the land as fixed by us, i.e., Rs. 2.25 lakhs for each of the assessment years 1969-70 and 1970-71. To this extent the appeals of the department would succeed because the AAC had directed adoption of the value as returned by the assessee himself. 20. The result is, all the appeals are allowed in part.
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1982 (3) TMI 141
Rectification Of Mistakes, Apparent From Record ... ... ... ... ..... rs under consideration, is to usurp the powers of the AAC to enhance the penalty. Therefore, the WTO s order in rectifying the earlier order which has already merged with the order of the AAC is clearly hit by the doctrine of merger as enunciated by the judgment of the Supreme Court in the case as reported in Amritlal Bhogilal and Co. This is not a cage which falls under the explanations set out in section 35(2). Thus by considering the facts of these appeals in the light of the decision of the Supreme Court as reported in Amritlal Bhogilal and Co. and also the judgment of the Madras High Court in the case of Indian Auto Stores, we are of the view that the order of rectification passed by the WTO under section 35 is erroneous and, consequently, we annul the same and direct the WTO to give effect to the direction which has been given by the AAC in this order dated 24-8-1977. 15. In the result, the orders passed by the authorities below are annulled and the appeals are allowed.
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1982 (3) TMI 140
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... ... ..... with proper reasons adopted by him in his valuation report. It was further submitted that in the case relied upon by the Department there was a large compound attached to that building and in that case it was not a case of a property but of merely a shed in a vast compound. It was further submitted that the loans were being raised at interest of 18 per cent. The interest receivable inthe market was of 14 to 15 percent and even dividends were fetching 12 to 13 per cent. In the case of commercial property a rate of 5 per cent or even of 6 per cent could not be applied for capitalisation. We find merit in his contention but at the same time we find that in the past the assessee had been himself showing the value of this property at Rs. 1,87,000 and odd. We are of he view that it would be fair if the value of the property was taken at Rs. 1,75,000. It is ordered accordingly. The same value shall be adopted for all the seven years. 6. In the result, the appeals are partly allowed.
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1982 (3) TMI 139
Net Wealth, Computation Of, Valuation Of Assets ... ... ... ... ..... Calcutta High Court in Gopichand Gupta v. CWT 1981 132 ITR 308 that . . the judgment of the probate court must be presumed to have been obtained in accordance with the procedure prescribed by law and it is a judgment in rem, and so long as the order remains in force, it is conclusive as to the execution and validity of the will, not only upon all the parties who might be before the Court but also before all other persons whatever, in connection with all proceedings arising out of the will or claim under or enacted therewith. The tax authorities are not entitled to go into the question and consider the genuineness of a will in regard to which the Court has granted probate or letters of administration. In view of the above authority, we direct that the value of the 780 shares held by Smt. Shant Duggal should be excluded from the net wealth of the assessee. 11. In the result, the appeal filed by the assessee is partly allowed, while the appeal filed by the department is allowed.
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1982 (3) TMI 138
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... ... ..... the case of present appellant, who does not maintain any books of account at all. A method of accounting postulates the maintenance of proper books of accounts for its business transaction by an assessee. Here the assessee totally denies the maintenance of books of accounts. Therefore, this argument of the ld. counsel has to be rejected. I, therefore, confirm the estimate of gross receipts at Rs. 2,74.390 of the contract receipts as taken by the Deptl. authorities. 8. The next ground is against the determination of the assessee rsquo s status as an AOP. This is closely linked with the question of registration of the assessee firm. I have already sent the matter back to the AAC in the registration appeal. In view of that, I set aside the order of the AAC on this point and restore the matter to the file of the AAC for fresh disposal in the light of his findings in the connected registration appeal. 9. For statistical purposes, both the appeals shall be treated as party allowed.
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1982 (3) TMI 137
Hindu Undivided Family, Assessability Of ... ... ... ... ..... hat the income derived from out of the wholesale business was already rightly assessed in the hands of the HUF by the ITO, Distt. I(3),Delhi, for the assessment years 1977-78, 1978-79. In our opinion, the orders of the learned Commissioner were quite unsustainable and erroneous in law and, therefore, we set aside the same and restore the assessment of the ITO, Distt. I(3),New Delhi, for the assessment years 1977-78 and 1978-79 dated26-2-1980and25-3-1981. A copy of the assessment order finalised by the ITO, Distt. I(3), New Delhi, for the assessment year 1979-80 is not put in the paper compilation and so we are not giving the date of the assessment order for the assessment year 1979-80 which is confirmed. However, we should be taken to have held that the assessment order of the ITO, Distt. I(3), New Delhi, for the assessment year 1979-80 made against the HUF, whatever its date may be, should be taken to have been confirmed. 8. Consequently, all these three appeals are allowed.
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