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1982 (6) TMI 52
Hardboard - Intermediate product - Liability to duty ... ... ... ... ..... warrant. I have already pointed out that it is not necessary for the petitioner to show that the particular stock of goods was sold in untrimmed condition. Learned Counsel for the petitioner also attacks the statement Ext. P4 to the effect that the invoices do not indicate that the hardboard sold was untrimmed. According to him, the invoices do not also indicate that hardboard sold was trimmed. Ext. P4 is not based on any relevant material or evidence it ignores relevant material it also proceeds on a misconception of law. For these reasons, the order is vitiated Under these circumstances, Ext. P4 order deserves to be and is hereby set aside. The matter will go back for fresh consideration at the hands of the first respondent who will dispose of the revision in accordance with law after giving an opportunity to the petitioner and the department to produce such further materials as they may think fit. The O.P. is accordingly allowed but under the circumstances without costs.
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1982 (6) TMI 51
Classification - Full opportunity be given to party - Burden of Proof ... ... ... ... ..... ere illegally collected. This prayer for refund will also have to be considered while considering and deciding proceedings in pursuance of this order. The petitioners have, in pursuance of an interim order of this Court, furnished in favour of the Prothonotary and Senior Master of this Court a bank guarantee. Since this petition is now being disposed of, the petitioners should, in the very terms in which the petitioners furnished the bank guarantee in favour of the Prothonotary and Senior Master of this Court, furnish a bank guarantee in favour of the Collector of Excise, Bombay. This guarantee should be furnished within a period of two months from today. On the petitioners furnishing the said guarantee, the bank guarantee already furnished in favour of the Prothonotary and Senior Master of this Court shall stand revoked. 6. Rule earlier issued on this petition is made absolute in terms aforesaid. In the circumstances of the case, however, there will be no order as to costs.
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1982 (6) TMI 50
Capital Gains ... ... ... ... ..... inition of transfer contained in s. 2(47) of the Act. In the light of the above discussion, we have no doubt that when the company redeemed the preference shares held by the assessee, there was transfer within the meaning of s. 2(47) of the Act which would attract s. 45. In our opinion, the Tribunal was justified in holding that the assessee was liable to pay tax in respect of the capital gains on receipt of the amount equal to, the face value of the preference shares of the company, held by her. We, therefore, answer question No. (1) in the affirmative and against the assessee. Reference answered accordingly with costs. The learned counsel for the assessee makes an oral request for a certificate of fitness for appeal to the Supreme Court as envisioned by s. 261. In view of the fact that we are taking a view different from the view taken by the Madras High Court, we are of the opinion that this is a fit case for appeal to the Supreme Court. Certificate is, therefore, granted.
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1982 (6) TMI 49
... ... ... ... ..... business loss taking Rs. 60 per quintal as the final price and that has been given by the I.T. authorities. Based on the said allowance, the assessee claims that the payment of Rs. 4.49 per quintal during the year in question will go to reduce the losses allowed in the previous year. We do not see how the assessee could claim a business loss when the sale price for the goods exported has not been finally fixed. Whatever that be, we are of the view that the sum of Rs. 46,711 which represents the differential price of Rs. 4.49 per quintal does not cease to be the balance of the sale price for the goods exported. It is nothing but a revenue receipt in the year of account. Therefore, we are not inclined to agree with the view taken by the Tribunal on this part of the case as well. Thus, we have to answer the questions referred to us in the negative and in favour of the Revenue. The reference is answered accordingly. The Revenue will have its costs. The costs are fixed at Rs. 500.
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1982 (6) TMI 48
... ... ... ... ..... sumption that the amount deposited did not belong to the company and, therefore, the interest accrued thereon also will not belong to the assesseecompany, the same stands vitiated. In this view of the matter we have to answer the reference in the negative and in favour of the Revenue. The learned counsel for the assessee-company contends that even assuming that the interest accrued on the amount deposited by the Government is an income in the hands of the assessee-company, it is a windfall and will amount to a casual income which is not assessable to tax. This question does not appear to have been urged before the Tribunal and there is no reference to this aspect by the Tribunal. Since this question does not arise out of the order made by the Tribunal, we refrain from expressing any opinion on the same. In the result, we answer the reference in the negative and in favour of the Revenue. The Revenue will be entitled to its costs. Counsel s fee Rs. 500 (Rs. five hundred only).
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1982 (6) TMI 47
Appeal To AAC, Loss, Return ... ... ... ... ..... loss. In the facts and circumstances of the case, the appropriate answer would be to say that it is for the Tribunal either to determine whether there has been any loss and the assessee is entitled to carry forward the said loss for the purpose of set-off in the assessment of the subsequent year or to direct the ITO or the AAC to compute the loss and notify the loss to the assessee, in case it was found that there has been a loss. Question No. 2 is, therefore, answered in the manner as aforesaid, viz., that the Tribunal was justified in holding that the return filed by the assessee was a valid return but the Tribunal should itself either find whether there is any loss as claimed by the assessee or would direct the ITO or the AAC to compute the loss and if, in fact, there is a loss found, the Tribunal shall notify the loss to the assessee in accordance with law. In the facts and circumstances of the case, parties will pay and bear their own costs. SUHAS CHANDRA SEN J.-I agree.
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1982 (6) TMI 46
Total Income ... ... ... ... ..... such a conclusion either on the wording of s. 64(1)(iii) of the I.T. Act or on any principle of law. On the contrary this provision was inserted by the T.L. (Amend.) Act, 1975, to bring all such income to tax with a View to plug the evasion of tax by the assessees by transferring assets to the minors or by deriving income admitting the minors to the benefits of partnership in a firm. We are, therefore, not persuaded to accept the contention of the assessee-petitioner. The order of the ITO is justified not only on the ground that the major portion of the income returned by the assessee himself cannot be excluded from the computation of the assessee-petitioner s income, but also on the ground that such amount was properly included in arriving at his income for the assessment year 1976-77 and on the further ground that in an application under s. 154 of the I.T. Act that item cannot be directed to be excluded. The writ petition, therefore, fails and it is accordingly dismissed.
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1982 (6) TMI 45
Assessed Tax, Penalty ... ... ... ... ..... essed by treating it as unregistered firm. We are thus in respectful agreement with what has been stated by this court in Maskara Tea Estate 1981 130 ITR 955 (Gauhati) and we do not propose to burden this opinion with all that has been noted in that decision. Learned standing counsel could not bring anything to our notice to take a different view in the matter. Another reasoning would also lead to the same conclusion. The idea behind the imposition of penalty is also to take care of the Revenue., apart from penalising the wrong-doer. Now, if a person had paid in advance the full amount of the tax payable, there would be no logic in penalising him in so far as the interest of the Revenue in the collection of tax is concerned. Because of all the above, we are of the opinion, that the present was not a case on its facts which attracted the mischief of s. 271(2) of the Act. Being of this view, we answer the question referred to us in the negative, i.e., in favour of the assessee.
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1982 (6) TMI 44
Donation For Charitable Purposes, Increase Of Capital Of Firm ... ... ... ... ..... Revenue. Before we part, we must mention that the learned counsel for the assessee desired that the assessee should be given an opportunity to prove that in substance the donation was in cash and not in kind. We are afraid we cannot permit the assessee to make out a totally new case at this belated stage which would run counter to the stand taken before the authorities below. The statement of case clearly shows that the assessee donated shares and not cash. We, therefore, cannot accede to the assessee s request to permit her to a second round of litigation by remanding the case with a view to giving her an opportunity to make out a case, hitherto not pleaded, that the donation, though ex facie of shares, was in substance of cash. For the above reasons, both the questions formulated by the Tribunal for our opinion reproduced earlier are answered in the negative, that is, against the assessee and in favour of the Revenue and the reference is disposed of accordingly with costs.
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1982 (6) TMI 43
Penalty, Reduction Or Waiver, Wealth Tax ... ... ... ... ..... ecedent for an exercise of the power under s. 18(2A) were fulfilled. In spite of that he has not waived the penalty but simply reduced it by 25 per cent. He has given no reason whatsoever for not waiving the penalty in full. Under such circumstances, the order of the Commissioner cannot be sustained. Our above reasons are also fortified by a decision of the Division Bench of this court in Civil Rules Nos. 450-553 of 1975 (Baidya Nath Sarma v. CWT, decided on February 4, 1982- 1983 140 ITR 801) and also a Single Bench decision of this court in Civil Rule Nos. 356-361 of 1975 (Sardar Kartar Singh v. CWT, decided on July 9, 1981 reported in 1982 135 ITR 379). Accordingly, the impugned order passed by the Commissioner of Wealth-tax is set aside. The Commissioner of Wealth-tax is directed to pass fresh orders in accordance with law in the light of the observations made above. In the result the petitions are allowed and the rules are made absolute. But we pass no order as to costs.
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1982 (6) TMI 42
Business Expenditure, Legal Expenditure ... ... ... ... ..... sessee in this case was claiming that be was in lawful occupation not only of his own half share of the salt pans, but also of the half share belonging to John Samuel, he could not consistent with that stand, be expected to claim an allowance in his income-tax assessments of a deduction in respect of the so-called mesne profits as having accrued year by year. It is only when the court gave its verdict on the unlawful nature of his possession that the income accruing from the half share of lands took upon itself the character of mesne profits. Therefore, it was only when the judgment was rendered in this regard that the liability itself has properly accrued. We, therefore agree with the conclusion of the Tribunal that the sum of Rs. 8,000 was properly allowable in the year of account relevant to the assessment year 1962-63. Since we have answered both the questions in this reference in favour of the assessee, the Department will pay the assessee s costs. Counsel s fee Rs. 500.
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1982 (6) TMI 41
Closely Held Company, Company ... ... ... ... ..... and has pointed out that in arriving at the assessable profits the ITO may disallow many expenses actually incurred by the assessee and in computing his income, he may include many items on notional basis, but the commercial or accounting profits are the actual profits earned by the assessee calculated on commercial principles. Even on the principles laid down by the Supreme Court, the commercial or accounting profits in the instant case must be taken at Rs. 3,72,999.49 as disclosed by the P and L a/c. It is not the case of the assessee that this profit was so small that it would not have been possible to declare a larger dividend than what has been declared. Having regard to the view which we have taken the questions referred are answered as follows Question No. (i) In the affirmative and against the assessee. Question No. (ii) In the negative and against the assessee. Question No. (iii) In the negative and against the assessee. Assessee to pay the costs of this reference.
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1982 (6) TMI 40
Best Judgment Assessment, Firm ... ... ... ... ..... the assessing authority was apparently not conscious of the discretion vested in him and failed to exercise the discretion. I may incidentally mention that the assessing authority also thought that the failure to produce the original instrument of partnership was also sufficient to refuse registration, but this view has been found against by the Commissioner. Under these circumstances, that part of Ex. P-1 order, dealing with refusal of registration, and also Ex. P-3 order are quashed. Consequently, the assessment made under Ex. P-4 may have to be revised suitably. The first respondent is directed to consider the question of grant or refusal of registration under s. 185 of the I.T. Act, 1961, afresh exercising his judicial discretion on the basis of the relevant materials already on record and such materials as the assessee may choose to produce hereafter. The petition is allowed in this manner and to the above extent. Under the circumstances, parties will bear their costs.
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1982 (6) TMI 39
Representative Assessee ... ... ... ... ..... idual rates of tax applicable separately to the total income of each beneficiary. In view of the aforesaid legal position, under the facts and circumstances of the case, the Tribunal was right in holding that the income from the trust property has to be allocated among the beneficiaries according to their respective shares, and inclusion of the same in the total income of the HUF is not justified. In these circumstances and for the reasons mentioned above, our answers to the three questions referred to us are answered in the affirmative, in favour of the assessee, and against the Department. For the same reason, we also answer all the three questions referred in each of the Income-tax Reference No. 5 of 1978, Income-tax Reference No. 6 of 1977 and Income-tax Reference No. 11 of 1977 in the affirmative, in favour of the assessee and against the Department. The petitioner shall pay to the respondent-assessee one set of costs which we assess at Rs. 200. K. N. SAIKIA J.-I agree.
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1982 (6) TMI 38
Industrial Company ... ... ... ... ..... d mechanically pressing the same is similar to processing camphor powder into camphor cubes. Loose cotton in bulk quantity with lighter density is as a result of pressing converted into cotton bales and to that limited extent it certainly undergoes a change. In view of the Supreme Court having approved the view taken by the Calcutta High Court in the aforesaid case, our task is made easy. There can be no doubt that if camphor powder pressed into cubes can be said to have undergone some sort of processing, loose cotton too can be said to have been processed when mechanically pressed and converted into cotton bales. We are, therefore, of the opinion that the Tribunal was right in coming to the conclusion that the assessee-company falls within the definition of an industrial company because it processes cotton into cotton bales. We, therefore, answer the question framed for our opinion in the affirmative. Both these references are answered accordingly with no order as to costs.
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1982 (6) TMI 37
Capital Employed, New Industrial Undertaking, Relief, Relief From Income Tax ... ... ... ... ..... is specifically provided that it is the intention that the expression notes shall have the same meaning as debentures in Indian law. However, as noted earlier, the notes issued as per both the agreements are worded identically except for some minor changes. And as we have pointed out earlier, the Revenue has no case that the notes issued as per the 1964 agreement are in any way different from the notes issued as per the 1967 agreement. The notes are transferable. They are in a series. The transferability of each note is assured from the agreement and from the wording of the note . In the circumstances, the Tribunal was right in treating the dollar loans as debentures for the purpose of granting relief under s. 80J of the I.T. Act, 1961. Therefore, we answer question No. 1 in favour of the assessee and against the Revenue. A copy of the judgment under the seal of the High Court and the signature of the Registrar will be sent to the Income-tax Appellate Tribunal, Cochin Bench.
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1982 (6) TMI 36
Penalty, Question Of Law, Reference ... ... ... ... ..... income of the assessee represented the assessee s real income which was concealed . It is apparent that the sufficiency or otherwise of the evidence to establish whether it was a case of concealment, is a pure question of fact and not a question of law. A catena of authorities is not required on this proposition. However, reference in this connection may be made to Basant Lai Om Parkash v. CIT 1972 83 ITR 356, where it was laid down by this court that case for imposition of penalty has to be found on the material on record and it is essentially a question of fact whether in a certain case penalty is called for or not. It was further held that the Tribunal having given valid reasons for supporting its order, no question of law arose for consideration by this court. In the circumstances noticed above, the Tribunal was quite correct in refusing to refer the proposed question to this court for opinion. The present petition is, therefore, dismissed, but with no order as to costs.
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1982 (6) TMI 35
Company, Rebate, Surtax ... ... ... ... ..... ged in the manufacture of iron bars and rods out of ingots manufactured from scrap in its own electric furnace and also billets purchased from outside and had claimed deduction under s. 80-I of the Act as a priority industry on its total manufacture. The Allahabad High Court has held in that case that if iron bars and rods manufactured or produced by the assessee are covered by entry 1, the source of the raw material was entirely irrelevant and immaterial, and, therefore, the assessee could not be denied relief under s. 80-I of the Act in respect of the turnover of iron rods and bars manufactured or produced from billets purchased from outside. We are, therefore, of the view that we are unable, to find any infirmity in the order of the Tribunal. Accordingly, questions Nos. 1 and 2 will have to be answered in the affirmative and in favour of the assessee. As already pointed out, questions Nos. 3 and 4 are not required to be answered. Commissioner to pay costs of the reference.
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1982 (6) TMI 34
... ... ... ... ..... it clear that it did so only for obtaining the best price possible and not for engaging itself in real estate trade. As a matter of fact, the sale of the laid-out plots took place not at the time when the layout was sanctioned in 1964, but at the time when the assessee was heavily involved in debts, and, therefore, the motive for the sale of the land was to discharge its debts. Hence, the total impression which we get from all the relevant facts and circumstances proved in this case is that the assessee sold the land, which was one of its capital assets, to discharge its debts that the sale was not that of a stock-in-trade and that the sale was not in the course of the carrying on of an adventure in the nature of a trade. In this view of the matter, we have to agree with the finding of the Tribunal and answer the question referred to us in the affirmative and against the assessee. The reference is answered accordingly. The Revenue will have its costs. Counsel s fee Rs. 500.
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1982 (6) TMI 33
Search And Seizure ... ... ... ... ..... on was proper, but the order is vitiated. In these circumstances we do not want to issue any direction by way of return of the money seized. That may be decided by the ITO in accordance with law, taking note of our decision. But we make it clear that this is an appropriate case where the second proviso to s. 132(5) must operate. Now that there is no order in force it is only fair that the amount is refunded. Since that may prejudice the Revenue in case it is proposed to pursue action and the interest of the Revenue would be sufficiently safeguarded by resort to the second proviso to s. 132(5) we direct that in case the petitioner either furnishes security to the satisfaction of the Revenue or bank guarantee for the amount to be returned, the ITO, D-Ward, Cannanore, shall with the previous approval of the Commissioner release the amount which has been retained. We direct that this shall be done within two months from the date the bank guarantee or other security is furnished.
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