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Case Laws
Showing 61 to 80 of 178 Records
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1984 (5) TMI 138
Appeal Against Assessment, Business Income, Penalty For Concealment, Total Income ... ... ... ... ..... ppeal against the penalty order, the Commissioner (Appeals) cannot come to a different total income contrary to the conclusion given in the quantum appeal. Further, such a conclusion was neither correct nor was in accordance with the actual facts as discussed above. We hold that the Commissioner (Appeals) was not correct in holding on the facts of the case that there was no profit element on the turnover represented by cost of materials supplied. 9. Grounds of appeal Nos. 2 and 3 of the department, therefore, are allowed. 10. As far as ground of appeal No. 4 is concerned, according to the finding given above in this order, the reduction in the amount of penalty allowed by the Commissioner (Appeals) is cancelled and the amount of penalty levied by the ITO at Rs. 48,680 is restored. 11. In the result, the appeal of the department is allowed and the cross-objection of the assessee is rejected. The appeal of the assessee has already been rejected as mentioned above in this order.
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1984 (5) TMI 136
Penalty For Late Filing Of Return ... ... ... ... ..... ed is not a continuing default also answers the argument of the AAC, that the period of default subsequent to 25-3-1977 being the date on which the returns under section 148 were due, should be considered separately and penalty should be levied with reference thereto under the amended provisions. There is absolutely no warrant for bifurcating the periods as done by the AAC and calculating the penalty under the new provisions with reference to the second period of default. The provisions of law in this regard, both under the 1957 Act and the 1961 Act are more or less the same mutatis mutandis. Hence, the decision of the Supreme Court is squarely applicable to the facts of the case. The maximum penalty leviable being 50 per cent of the assessed tax, namely, Rs. 4,887 in each year under consideration, we reduce the same to this figure. Accordingly, the penalty is reduced to Rs. 4,887 in each of the years under appeal. 7. The appeals filed by the assessee are accordingly allowed.
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1984 (5) TMI 133
Let Out, Rule 1BB, Valuation Date ... ... ... ... ..... assessee for freezing the value of the house as relevant to the assessment year 1971-72 under section 7(4). 9. As regards the other claim of the assessee that rule 1BB should have been applied, we uphold the claim of the assessee in this behalf, as properties which are wholly or mainly used for residential purposes should be valued as per the provisions of this rule. Relying on the decision of the Delhi Bench A (Special Bench) of the Tribunal in Biju Patnaik v. WTO 1982 1 SOT 623, we direct that this rule should be applied while ascertaining the value of this property as applicable for the assessment year 1971-72 under the provisions of section 7(4). 10. The appeal filed by the department in WT Appeal No. 150 (Nag.) of 1983 is dismissed. The cross-objection of the assessee for this year as well as the appeals filed by the assessee relating to the assessment years 1977-78 and 1978-79 in respect of the HUF and that by the individual for the assessment year 1978-79 are allowed.
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1984 (5) TMI 131
Advertisement Expenditure ... ... ... ... ..... /22/68-IT(A-I), dated 23-7-1969 see Taxmann s Direct Taxes Circulars Vol. 1, 1985 edn., p. 854 . On the facts of the case available on record, there is nothing to show that the assessee s business is an industrial undertaking and he has incurred the publicity expenditure in the capacity of a producer in the year of manufacture. Consequently, we are of the considered opinion that the provisions of section 37(3D) were not applicable and consequently the limitation of expenditure contained in sub-section (3A) of section 37 was rightly attracted. In this case there is no dispute regarding the quantum of disallowance but the dispute is with regard to the applicability of section 37(3A) and section 37(3D). For the reasons stated by us, we have no hesitation in setting aside the order of the AAC as it is not justified in law and in the circumstances of the case and upholding the order of the ITO which is in accordance with law. 5. In the result, the appeal of the revenue is allowed.
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1984 (5) TMI 129
Valuation Of Assets ... ... ... ... ..... ascertained before rejecting the assessee s claim, what we have to consider is whether a purchaser in the open market will reckon on these amounts as part of the assets of the companies in offering a price for the shares. A prudent purchaser will certainly not take into account amounts shown as of doubtful recovery or not realisable in determining the price to be offered for the same and would exclude such amounts. Moreover, it is seen from the order of the AAC that the provision of unrealisable debts was made because they were due from sick mills and also from companies whose finances were in the red. Whatever be the position, as we have already noticed, a prudent purchaser would not take into account the amount shown as doubtful of recovery or unrealisable and exclude them from the total value of the assets in fixing the price of shares even under rule 1D. We, therefore, find no merit in the department s objections which are, accordingly, rejected. The appeal is dismissed.
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1984 (5) TMI 127
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... ... ..... Nadar s case as the same has been approved by the same High Court in Ali Hussain M. Jeevaji s case. 10. In the light of the two authorities of the Madras High Court, i.e., A.A. Annamalai Nadar s case and Ali Hussain M. Jeevaji s case which squarely cover the point at issue before us and which are binding on us, it is not necessary to discuss the other authorities cited by the learned representative for the department, i.e., Ganapathy Moothan s case and CGT v. K.P.S.V. Duraiswami Nadar 1973 91 ITR 473 (Mad.). 11. In view of the above discussion, we hold that since both the new partners contributed capital and Shri G. Parthasarathy also agreed to bear the losses of the business, the AAC has rightly held that the relinquishment of their shares by Smt. G. Saraswathi Ammal and Shri A.M.S. Guruswamy Nadar in favour of their sons did not constitute gifts liable to tax under the Act. We, therefore, confirm the impugned orders of the AAC. 12. In the result, the appeals are dismissed.
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1984 (5) TMI 126
Previous Year, Subject Matter ... ... ... ... ..... gnised by the revenue itself since under rule 9A of the Income-tax Rules, 1962 ( the Rules ) relating to the computation of income from feature films, in sub-rule (10), it is stated that for the purpose of that rule, the rights of exhibition of a feature film shall be deemed to have been sold only on the date when the positive print of the film was delivered to the film distributor, which is possible only when the film is certified for release by the Board of Film Censors. In the present case, the film was certified for release only on 6-4-1979 and it was released on 14-4-1979. Hence, the income from these transactions accrued only in the previous year ended 31-3-1980 and such income could not be assessed in the assessment year relevant to the previous year ended 31-3-1979. The assessment made by the ITO was, therefore, correct in law and was not required to be disturbed by the Commissioner. We must, accordingly, cancel his order made under section 263. The appeal is allowed.
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1984 (5) TMI 125
Residential House Property ... ... ... ... ..... if we should go by the area occupied by the assessee, it is obvious that substantially the flat purchased is only for the purposes of the residence. Moreover, a reading of section 54 indicates that it is the object with which the purchase is made that is relevant and not the actual subsequent user. For instance, if after purchasing the flat for the residence, the assessee should after some time let out that property, it could not mean that the benefit of section 54 could be withdrawn because there is no provision for such an eventuality. That also indicates that the benefit is intended to apply where one residential unit is substituted by another residential unit and whatever capital gains enures from the sale of the residential house is reinvested in the purchase of another residential house. In the circumstances, we accept the claim of the assessee and direct the ITO to grant the relief under section 54 and recompute the capital gains exigible to tax. The appeal is allowed.
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1984 (5) TMI 124
Financial Year, Previous Year ... ... ... ... ..... income from salary if accounts are maintained, a previous year difference from the financial year could be adopted, can it be said that the statement of accounts furnished by the assessee showing salary received and supported by a certificate given by the company in which he is employed, constitutes accounts for the purpose of section 3(1)(b) ? Since there is no prescription of accounts in the Act, it must be left to the assessee to maintain accounts in a manner as he chooses, and the manner he chose to depict the income from salary cannot be said to be not an act of recording of transactions relating to salary, though it may be unskilful art or a badly executed art, still it is an art. I am, therefore, inclined to agree with the view expressed by the learned Judicial Member and hold that the assessee s contention must prevail. 12. The matter will now go back to the regular Bench which heard the appeals for passing necessary orders in accordance with the view of the majority.
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1984 (5) TMI 115
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... ... ..... Sajjan Raj had joined the firm in his capacity as Karta of the HUF of Sajjan Raj. The assessee paid interest to the HUF of Sajjan Raj which the ITO is disallowed under s. 40 (b). The High Court held that the interest was paid by way of interest to the HUF which was the creditor of the firm and the fact that the Karta of the HUF was a partner of the assessee firm was not relevant because under s. 40(b) it was only the interest paid to the partner which was not allowed to be deducted and interest paid to any creditor of the firm could not be disallowed under the provisions of s.40(b). we may add this decision of the Gujarat High Court has become final, the Supreme Court having dismissed the Department s Special Leave Petition against this judgment (144 ITR (St.) 15). Having regard to the above position we agree that the provision of s. 40(b) would not apply to the interests in question. Hence this ground is rejected. 4. In the result, the Department rsquo s appeal is dismissed.
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1984 (5) TMI 112
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... ... ..... st, salary, bonus, commission or remuneration made by the firm to a person of the firm would not be deducted in computing the income chargeable under the head profit and gains of business or profession, which does not support the contention of the Revenue that the partner of the firm is not entitled to salary but s. 40(b) merely provides that no deduction for the same will be made in the case of the firm while computing of the income chargeable under the Head profit and gains of business or profession. In view of the above, we set aside the order of the AAC and direct the ITO to allow the claim of the assessee. 5. In the result, the appeal is allowed . Following respectfully the aforesaid decision of the Tribunal, we accept the ground taken by the assessee and claim for standard deduction and set aside and reverse the orders of the authorities on this point and direct the ITO to allow standard deduction under s. 16(1) of the IT Act, 1961. In the result, the appeal is allowed.
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1984 (5) TMI 109
Revised Return ... ... ... ... ..... this point is concerned, both Hopeville Estate s case and Dasaprakash Bottling Co. s case, do not conflict with each other. 13. The Special Bench has summarised its decision at the end of its judgment and laid down four propositions which were also noticed by the Commissioner (Appeals) and referred to in his order. Following, with respect, those propositions, with which we agree, we hold that the view expressed by the Commissioner (Appeals) is correct and rational and should be endorsed. We direct accordingly. 14. In view of our decision on this question, we do not think it necessary to consider the decision of the Supreme Court in the case of Kedarnath Jute Mfg. Co. Ltd. because there is nothing in common with that decision of the Supreme Court and the contention before us. The other conclusions reached by the Commissioner (Appeals) as a consequence of allowing the assessee s claim, are also upheld. 15 to 20. These paras are not reproduced here as they involve minor issues.
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1984 (5) TMI 108
Public Policy ... ... ... ... ..... ed under section 37 of the Act is clearly satisfied and the Commissioner was right in allowing the deduction of this amount. The revenue harps upon the fact that there was a contravention of the provisions of the Companies Act but it has to be remembered that the payment of the interest was not the consequence of that contravention. If at all any liability could arise out of that contravention, it would be the penalty which may be payable and any claim for deduction of the penalty may require the consideration of the question whether such a penalty paid in contravention of the statutory provisions would be an allowable business expenditure. But, this is not the issue before us and since we are only concerned with the allowability of the liability to pay interest, which is a normal business expenditure of the assessee, we see no reason to interfere with the order of the Commissioner (Appeals) allowing that deduction. His order is, therefore, confirmed. The appeal is dismissed.
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1984 (5) TMI 105
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... ... ..... uation date. If it can be assessed and the law does not compel assessment of the higher net wealth existing at the first moment of the valuation date, the Court can assess only the former. 6. Rom the above it becomes very clear that as on the valuation date the jewellery was not the proerty of the HUF and as such cannot be included in the wealth of the HUF. We have already observed earlier that we are compelled to take a contrary view to that taken by Cuttack Bench in the assessee s own case wherein erroneous facts have been observed. In view of the ratio available as cited above and on the facts and circumstances of the case, we, therefore held that the jewellery that was partitioned during the asst. yr. 1975-76 account be included as wealth of the HUF. Accordingly the amount of Rs. 92,763, Rs. 1,05,790, Rs. 1,25,242, Rs. 1,68,517 and Rs. 2,08,047 would be deleted from the total wealth of the assessee HUF. 7. In the result the assessee s appeals for al the years are allowed.
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1984 (5) TMI 104
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... ... ..... e included in the partner s hands and not in the firm s hands, specially when the ITO himself has observed that this amount apparently invested by the partner in his individual property. The DR relied on the orders of the authorities below. After hearing both the parties, we hold that the inclusion of Rs. 5,597 as undisclosed income of the firm is totally unjustified, specially in view of the provisions contained in s. 69 of the IT Act. We accordingly delete the inclusion of Rs. 5,597 from the income of the assessee. 7. Regarding the disallowance out of car expenses and car depreciation for personal use to the tune of 1/4th by the authorities, Shri Ranka argued that it is excessive and should have been limited to 1/5th only. The departmental representative supported the orders of the authorities below. After hearing both the parties, we are of the view that the disallowance if restricted to 1/5th would be reasonable. 8. In the result, the assessee s appeal is allowed in part.
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1984 (5) TMI 103
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... ... ..... nt consideration by not less than 15 per cent of the value declared, the Revenue has to establish that the assessee actually received more than what is declared by him. In view of this authority the Revenue, even if the report of the Valuation Officer is accepted, can be said to have established only one of the conditions and not the other. The other condition cannot be said to have been established by establishing the first condition that the fair market value of the capital asset exceeds the full value of the consideration by more than 15 per cent. This being so, we do not see any point in going into the question whether the fair market value was rightly assessed by a Valuation Officer. Even if that is assumed to be correctly done, the provisions of s. 52(2) cannot be invoked in the light of the Supreme Court decisions as the Revenue has not been able to establish the second condition of s. 52(2). For the reasons, we uphold the order of the CIT (A). The appeal is dismissed.
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1984 (5) TMI 102
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... ... ..... e Bombay High Court held that the manger of the HUF was a partner in representative capacity and interest having not been paid to the HUF who was a partner in the firm through its representative, s. 40(b) could not be applied to the interest paid on the personal loan of the partner who represented his HUF in the firm. So there are diverse view of the High Court on this issue and therefore, we follow the golden rule that where more than one plausible views are available, then the view which is more favourable to the assessee should be taken. the view taken by Hon rsquo ble Bomaby High Court in (1983) 37 CTR (Bom) 17 (1984) 146 ITR 547 (Bom) being more favourable to the assessee has to be accept. We, therefore hold that the interest paid to Shri Purshottam Das on his personal loan, who represented the HUF in the firm, could not be disallowed under s. 40 (b) as the partner in the firm was the HUF to whom the impugned interest was not paid. In the result, the appeal is dismissed.
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1984 (5) TMI 101
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... ... ..... attempt to reclaim the bad debts and as such he did not allow the same. the AC notes that out of the claim for bad debts in including sum as due for reputed concerns like Sita World Travels and the like, he was of view that it would be wrong to say that these organisations have refused to pay the pettily amounts as illustrated by the counsel. He allowed various small petty items and restricted the disallowance to Rs. 763. The ld. AR argued that the amounts which are due from parties who have been booked by the travel agents such as Sita World Travels etc., and that being petty in nature should have been fully allowed. The ld. Departmental Represenative supported that views expressed by the ITO and the AAC. After considering both the parties, we find that the amount which was of petty nature should have been allowed in fully by the ITO and we, therefore, order that bad debits of Rs. 763 should be allowed as such. 4. In the result, the assessee rsquo s appeal is allowed partly.
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1984 (5) TMI 100
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... ... ..... , be fully allowed. The ld. CIT (A) agreed with the views of the assessee and allowed the appeal of the assessee. Before us the ld. Departmental Represenative again pressed that it was not the expenditure of the assessee and the ld. CIT (A) was wrong in stating in his order that the expenses incurred by the assessee were in the interest of business, and in allowing the same. The ld. AR argued that it takes considerable time to get the power sanction and once there is a disconnection, it would have meant total disruption of the business of the assessee. The amount was paid only to retain the power line and power connection. it was, therefore, clearly in the interest of the business and the expenditure incurred was due to commercial expediency of the assessee. After hearing both the parties, we are in total agreement with the views expressed by the ld. AR and we accordingly uphold the order of the CIT (A). 5. In the result, the Departmental appeals for both years are dismissed.
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1984 (5) TMI 99
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... ... ..... by the assessee in his failure to return the correct income nor was he grossly or wilfully negligent . 10. Bearing in mind the above observations when we examine the case before us, we find that the assessee has not been found in a position where it could be said that the difference between the assessed income and the returned income was due to any fraud or gross or wilful neglect on his part. In fact, the explanation of the assessee was simple and the addition was on mere difference of opinion of various persons as to what should be the cost of construction. This even if we were to consider the applicability of the Explanation, as mentioned by the AAC, we find that the Explanation has no application to the facts of the case before us. On none of the counts, therefore, the penalty is imposable upon the assessee. The authorities below erred in penalising the assessee in the manner done by them. We cancel their order and allow the appeal of the assessee. 11. Appeal is allowed.
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