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Case Laws
Showing 81 to 100 of 264 Records
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1986 (1) TMI 184
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... ... ..... mbers has to be considered by the Department when the claim is so made. It would not be proper to consider and decide an issue which is not a subject-matter of appeal of the fear of some members making claim of a smaller HUF and for the reason that such a submission was made by the assessee before AAC. Since we are not concerned about whether there could be multiple small HUFs within the bigger HUFs or not, at this juncture deciding this issue in the present appeal, to my mind, appears to be unnecessary though this issue is realised by the Department and may be said to arise out of the order of the AAC but is not at all relevant to the issue of inclusion or exclusion of an item partially partitioned from the wealth of the assessee HUF and therefore to my mind the observation made by my ld. Brother should not be treated as binding on the other members of the HUF or the Department in the other case, if any, especially when the other member assessees are not in appeal before us.
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1986 (1) TMI 183
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... ... ..... has done. 4. My ld. brothers have been influenced by the observations of the Settlement Commission that the value shown for the purpose of export could not be considered as the market value and a substantial discount had to be allowed for ascertaining the market value at home. But what would be the percentage of this discount was never looked into by anybody and who knew as to what the actual deduction ought to have been. Obviously it were the assessees. 5. I am therefore, of the opinion that the Departmental ground raised in this behalf ought to have been allowed. However, since my respected and ld. brothers have taken a contrary view, in accordance with the general principal of jurisprudence and the provisions of s. 255 (4) of the IT Act which would apply to this case, because of s. 24 (11) of the WT Act, the view of the majority in case of difference of opinion should prevail, I therefore, respectfully concur with all the ultimate conclusions arrived at by my ld. brothers.
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1986 (1) TMI 182
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... ... ..... are to be computed in accordance with rr. 2 and 2A to 2G which provide for their computation in accordance with balance sheet subject only to certain variations. The result would be that the value of interest of each partner in the firm for he purpose of inclusion in his net wealth would be minus Rs. 50,000. Clearly this was not and cannot be the intention of the legislature. Since there are conflicting decision of various High Courts on subject it would have been better if we had chosen to take the view which is in accordance with the language of the Act as discussed above. 4. However, as there are two Special Bench decisions to this effect and my ld. and respected brethren have chosen to follow them and in accordance with s. 24(11) of the WT Act r/w s. 255 (4) of the IT Act, the case has to be decided according to the opinion of them majority of the members of the Tribunal who have heard the matter. I respectfully concur with the ultimate order proposed by my ld. brethren.
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1986 (1) TMI 181
Advance Tax, Interest Payable By Assessee ... ... ... ... ..... ppeal is not a substantive right and should not be easily whittled down. We, therefore, propose to decide this appeal on merits. 3. On a perusal of the all over facts and circumstances of the case we find that the assessee was not obviously assessed by way of regular assessment and, therefore, was not bound to file the estimate of its current income in Form No. 29 and, therefore, such estimate could be filed on or before the date on which the last instalment of advance tax was due. This date was 15-12-1979 and the estimate filed on 6-12-1979 was the only estimate filed in pursuance of legal obligation. The filing of any estimate earlier was not necessary. Therefore, if the assessee has made any own estimate earlier, it could not prejudice the assessee. It is really unfortunate that for a paltry sum of Rs. 610 which the assessee was never liable to pay, it had to be dragged in this protracted litigation. With these remarks, we accept the appeal and delete the levy of interest.
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1986 (1) TMI 180
Property Passing On Death ... ... ... ... ..... ere is every probability of a son being born to them and in view of the fact that she not having received any share in the partition with a pure intention that the husband would maintain her throughout her life goes to indicate that the property received by the husband was held by him in the capacity of the HUF. This particular decision of the Andra Pradesh High Court is exactly opposite to the decision arrived at by the Orissa High Court. We are inclined to follow the decision of the Andhra Pradesh High Court for the reason that to our mind the reasoning given by their Lordships of the Andhra Pradesh High Court appeals to our mind. We are, therefore, of the view that the property was held by the deceased in the capacity of a karta of the HUF by himself and his wife and consequent to his death only 50 per cent of the property passes. We, therefore, uphold the order of the Controller and dismiss the appeal of the department. Per Shri H. S. Ahluwalia, Judicial Member - I agree.
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1986 (1) TMI 179
Acquisition Of Immovable Property, Preliminary Notice, Proceedings For ... ... ... ... ..... t aspect of the matter. In such circumstances and in the absence of any sale transaction mere arithmetical calculations based on certain Government circulars cannot determine the fair market value of a property. We do not know what were sizes of the plots leased out by the Government, what were their development conditions and what were the terms of the leases. Without such details and without evidence of actual transactions, in our view, the fair market value of the property in question could not be determined. We, therefore, hold that from the material on record it was not proved that the fair market value of the property in question as on the date of transfer was more than 15 per cent of the consideration shown in the instrument of transfer. The property in question, therefore, could not be acquired under section 269F. We may mention that no other point was pressed before us from either side. 20. In the result, the appeals are allowed and the order under appeal is quashed.
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1986 (1) TMI 178
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... ... ..... n that Padmapriya rsquo s signing the application for registration after she attained majority is a positive act showing how she exercised her option given to her by the Partnership Act. 7. Relying on a decision of the Andhra Pradesh High Court reported as Modern Stones vs. CIT (1985) 48 CTR (AP) 8, Shri Santhanam submitted that during the period prior to 19th May, 1979, i.e., during the period when she was a minor, profit had accrued and Padmapriya had been made responsible for losses, if any, for that period. This is an invalidity. Now, in our opinion, it is settled law that profit accrues only on the last day of the accounting year. This is laid down by the Supreme Court in the case of E. D. Sassoon and Co. Ltd. vs. CIT (1954) 26 ITR 27 (SC). So, since the profit accrued only on 30th June, 1979, and on that day Padmapriya was a major, there was no question of any minor being saddled with a possible loss which may accrue to the firm. 8. In the result, the appeal is allowed.
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1986 (1) TMI 177
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... ... ..... on-resident. The above ratio squarely applies to the instant case. The design machinery was supplied and the erection was supervised by Wean United engineer and this would clearly prove the business connection between the assessee and Wean United of USA. 7. In our view, the assessee is not entitled to exemption under section 10(6)(vi) because the payment was made to Wean United of USA as per the agreement with them. The payment is not made to Mr. George Sweet directly. If it is a payment to Mr. George Sweet then only the provisions of section 10(6)(vi) would apply. Since the payment is not to him the payment is not entitled for exemption under section 10(6)(vi). Hence, the assessee has to deduct tax at source at the prescribed rate on remittances made to Wean United. The ITO is justified in not issuing no-objection certificate till the tax is deducted. We reverse the order of the Commissioner (Appeals) and restore the order of the ITO. 8. In the result, the appeal is allowed.
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1986 (1) TMI 176
Reassessment, Time Limit For Completion of, Development Rebate, Conditions For Allowance Of ... ... ... ... ..... ourt in the case of CIT v. Southern Sea Foods (P.) Ltd. 1983 140 ITR 855. In that case, the assessee attempted to bring the case under sub-clause (viii) of section 35B(1)(b). This was rejected by the High Court. The High Court had also observed at page 859 that no other sub-clause in section 35B(1)(b) would be applicable and no argument was submitted on that point. The Special Bench decision of the Tribunal, on which reliance has been placed by the Bench disposing of the assessee s appeal for the assessment years 1975-76 and 1976-77 had pointed out that this commission agents provided the assessee information regarding foreign market and, insofar as they tried to canvass orders, they also in a way advertised their goods. Therefore, this expenditure will be coming under sub-clause (i) or sub-clause (ii) of section 35B(1)(b). So, the decision relied on by the department does not require any reconsideration of our earlier findings. 27. In the result, the appeals stand dismissed.
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1986 (1) TMI 175
Charitable Or Religious Trust ... ... ... ... ..... d of repayment of loan. Such recovery thereof was, therefore, also dependent on the successful implementation of the project and the due recovery of the loan. 20. The most fundamental point is that no one proposing to take up any activity for profit would venture to take up the activity that the foundation is involved in. In the very nature of the working of the foundation, the question of any profit from the activity does not arise at all. 21. Therefore, holding that the foundation is engaged in an object of general public utility and its activities do not involve the carrying on of an activity for profit, I hold that the basis of assessment under section 143(3) in respect of the assessment year under question was correct and the learned Commissioner wrongly and unjustifiably assumed jurisdiction under section 263 for withdrawing the exemption under section 11. I accordingly vacate the Commissioner s order and restore the assessment. 22. In the result, the appeal is allowed.
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1986 (1) TMI 174
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... ... ..... lments in terms of the Explanation aforeasaid. 3. The next ground mentioned in the appeal is about the disallowance on account of entertainment expenses amounting to Rs. 1,000 and repairs and maintenance repairs amounting to Rs. 3,000 respectively. The grievance mentioned in the memorandum of appeal is that the learned AAC erred in not deciding the ground of appeal in that regard. At the hearing before us the learned counsel for the assessee did not address any argument on the point and there is nothing before us to show that such a ground was actually raised and pressed before the learned AAC. This ground, therefore, is to be rejected. In the result the appeal is partly allowed. The ITO is directed to allow deduction for interest paid or payable by the assessee on funds borrowed and utilised for the assessee on funds borrowed and utilised for the construction of the house property for the period prior to1st March 1980in terms of section 24(1)(vi) and the Explanation thereto.
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1986 (1) TMI 173
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... ... ..... of the Tribunal in the case of ITO vs. Sriram Memoraial Foundation referred to above. The distinction sought to be made by the ld. CIT(A) on the basis of the facts is, in our opinion, incorrect and illusory. A letter dt. 15th Feb., 1980 written by Shri Sathya Sai Central Trust to the assessee has been placed on record and from perusal thereof if appears that the said Shri Sathya Sai Central Trust had requested the assessee trust to contribute to it for a specific purpose, namely, for purchasing of land for setting up a Secondary School. Donation for the above purpose in our opinion amounts to a donation for a charitable purpose. To hold otherwise would be unjustified on the basis of the facts on record. We accordingly accept the assessee rsquo s appeal and held that the donation of Rs. 2,55,075 made by the assessee trust to Shri Sathya Sai Central Trust was utilisation of the income of the trust for charitable purpose. 14. In the result, we allow the assessee rsquo s appeal.
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1986 (1) TMI 172
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... ... ..... riginal shares issued before1st Jan., 1954sold in 1959 and bonus shares issued in 1967 in relation to old shares. 12. In Addl. CIT vs. Raj Kumar Bangur and Chandri Devi Bangur (1987) 61 CTR (Raj) 97 (1985) 154 ITR 868 (Raj) again the issue before the Rajasthan High Court was computation of capital gains method of valuation of shares right shares where price of right shares can be averaged with price of original shares where bonus shares were ranking pari passu with the original shares. 13. Form the discussion as above it can safely be inferred that he reliance of the parties on the case law before the lower authorities as also before us is distinguishable on fact. The net result is that order of the ld. lower authorities computing the net capital gain in the hands of the assessee stands reversed, since no capital gain is assessable on facts and in law. The returned version of the assessee stands accepted. We hold and direct accordingly. The appeal succeeds and stands allowed.
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1986 (1) TMI 171
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... ... ..... o contrary decision of any Other High Court had been brought to our attention) were given with reference to the language of cl. (iii) of sub-s. 2 of s. 17 of the IT Act, 1961 and when the matter is covered squarely by the language of the said cl. (iii), we see no reason as to why we should not give effect to the plain language of such section which is unambiguous and we should change our instance merely because the amendment brought in by the Taxation Law (Amendment) Act, 1984 had subsequently been withdrawn by Finance Act, 1985. The effect of the aforesaid amendments may be relevant for consideration in respect of asst. yrs. 1984-85 and 1985-86 but not in respect of 1978-79 and 1979-80. In respect of these years the matter has to be considered in terms of cl. (iii) of sub-s. (2) of s. 17 and not in terms of the amendment introduced by the Taxation (Amendment) Law or Finance Act, 1985. 14. In the result the Departmental appeals are treated as allowed for statistical purposes.
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1986 (1) TMI 170
Income, Assessable As ... ... ... ... ..... the assessee. He also pointed out that against the Commissioner (Appeals) s order for the assessment year 1979-80 an appeal was pending before the Tribunal. However, on behalf of the assessee the order of the Commissioner (Appeals) was supported. 28. We have considered the rival submissions. Since the ITO did not examine the admissibility of weighted deduction on the various items of the expenses under the provisions of section 35B(1)(b), we see no justification for any interference with the order of the learned Commissioner (Appeals). 29. The third objection relates to the inclusion of Rs. 63,773 under section 41(1). It has already been dealt along with the third ground of appeal in assessee s appeal in IT Appeal No. 5718 (Delhi) of 1984 and has not been accepted. 30. In the result, assessee s appeals IT Appeal No. 5718 (Delhi) of 1984 and IT Appeal No. 2614 (Delhi) of 1985 are partly allowed whereas the department s cross-objection C.O. No. 108 (Delhi) of 1985 is rejected.
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1986 (1) TMI 169
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... ... ..... f enduring benefit, following the ratio of the decision of their Lordships of Delhi High Court in the case of Triveni Engg. Works Ltd. vs CIT (1982) 136 ITR 340 (Del). In view of the above discussion, we hold 1/3rd of Rs. 10 lacs be regarded as the payment for acquisition of a capital asset and that the remaining sum be regarded as having been laid out wholly and exclusively for the purpose of the assessee rsquo s business on revenue account. 30. In respect of the capital expenditure, the assessee would be entitled to get investment allowance and depreciation on the same terms and conditions as can be made available to books . 31. In accordance with the opinion expressed above, we reject the contention of the Revenue to the effect that the entire payment was on capital account and that no depreciation and investment allowance was allowable thereon. The assessee rsquo s appeal on this point is accepted partly as above. 32. In the result, both, the appeals stand partly allowed.
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1986 (1) TMI 168
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... ... ..... interest in respect of asst. yr. 1979-80. We are unable to give such a finding because the appeal for the asst. yr. 1979-80 is not before us. The ratio of the decision of Kapur Chand Sri Mal, is not that we should issue directions with regard to an assessment year of which the appeal is not before us. On the contrary their Lordships of the Supreme Court have categorically stated that any finding of the Tribunal not arising out of the subject matter of appeal would not be a bindings finding. See ITO vs. Murlidhar Bhagwan Das (1964) 52 ITR 335 (SC). This being so, the order of the ITO appears to us to be correct and we are unable to sustain the finding of the ld. AAC that the interest for more than 12 months should have been allowed during the previous year under consideration. Interest for 12 months had already been allowed by the ITO and that fulfilled the requirements of the law. We, therefore, reverse the order of the AAC and restore that of the ITO. The appeal is allowed.
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1986 (1) TMI 167
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... ... ..... before the ld. Lower authorities. Here also the assessee fails. 10. As regards the impugned orders for both the years being barred by limitation, this also fails in view of the amendment brought by substitution w.e.f.1st Oct., 1984by the Taxation Laws (Amendment) Act, 1984 in sub-s. (3) of s. 25 of the WT Act. 1957 and after amendment the said sub-section reads, no order shall be made under sub-s (2)after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. The amendment is procedural in nature since it dells with procedure, pure and simple and it came into being as from 1st Oct., 1984 and the impugned orders for both the years have been made on 20th March, 1986 hence are within the statutorily provided period of limitation. This contention of the assessee also fails. 11. In the net result, the impugned orders of the ld. CIT/CWT made under s. 25(2) of the WT Act, 1957 for both the years stand upheld. The appeals fail.
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1986 (1) TMI 166
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... ... ..... nterference is, however, on quite a different aspect. It has, in fact, nothing to do with the assessment of the assessee-trust. It has everything to do with the assessment of the settlors. Whether the ITO describes the assessment of the trust here as a protective assessment or not, the Department rsquo s freedom of action as regards the settlors is unfettered. Merely because the ITO failed to describe the assessment, here as a protective assessment, the CIT rsquo s hands will not be tied in the matter of taken appropriate action (if he is so advised) in the cases of the settlors. As the Tribunal observed for the asst. yr. 1979-80, this issue of assessing the settlors under s. 64(1) is totally irrelevant so far as the assessee-trust is concerned. Remedial action, if there has been any loss of revenue, lies elsewhere under the appropriate statutory provision. It is certainly not s. 263 in the instant case. We, therefore, set aside the order of the CIT. 8. The appeal is allowed.
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1986 (1) TMI 165
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... ... ..... r of law or fact is manifest in that order. There is no such mistake apparent in that order. Secondly, in the order of the Tribunal in S. K. Virmani (P) Ltd., the decision in New International Chemicals (P) Ltd. relied upon by Smt. Kapila was also noticed and yet that decision was not followed by the Tribunal. Thirdly, even if there are two possible interpretations of s. 40A(8) in the present factual context, the one favourable to the assessee has to be preferred and indeed that is the settled law. Looked at from any angle, therefore, the assessee rsquo s claim succeeds. We delete the disallowances and the assessment shall be modified accordingly. 8. One other objection for each of the two years relates to claim made by the assessee under s. 80J. However, Shri Bhalla submitted that he did not wish to press this claim for the two years in view of the retrospective amendment of s. 80J. These objections are, therefore, rejected. 9. In the result, the appeals are allowed in part.
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