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1987 (10) TMI 93 - ITAT DELHI-A
Validity Of Gifts, Hindu Undivided Family, Orders Of Appellate Tribunal ... ... ... ... ..... even though he chose to rely upon a document which he collected after the hearing was over in his Chamber with out giving any opportunity to the other side to express their comments on this letter. I feel that as a Third Member my role under the law is confined to expression of opinion on the point referred to the Third Member but not to give a direction to the Bench in any manner. A direction can be given to the Bench only when the Third Member exercise either appellate or revisional jurisdiction. The Income-tax Act does not revisional jurisdiction. Therefore, giving such a direction by the Third Member to the Bench is in my opinion, beyond the power of the Third Member. He may, however, suggest for consideration of the Bench. 10. For the reasons abovementioned, I express my agreement with the view of the learned Accountant Member. 11. The matter will now go before the regular Bench, which heard the appeal originally, for disposal of the appeal according to majority opinion.
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1987 (10) TMI 92 - ITAT DELHI-A
Income From Other Sources, Deduction ... ... ... ... ..... and guidelines issued by the Institute of Chartered Accountants of India could be relied upon in arriving at the actual cost for the purposes of the Income - tax Act. But now I find that subsequent to the decisions of the Special Benches, two High Courts have expressed a contrary view. The Karnataka High Court in the case of Cap Steel Ltd. after considering the Supreme Court decision in the case of Challapalli Sugars Ltd. expressed the view that the decisions would have no application to a case of this nature. The Karnataka High Court clearly laid down the rule that interest received on short term deposits during construction period construction period constitutes income of the assessee and is liable to be taxed as income and could not be deducted from the cost of construction. In view of this direct decision of the Karnataka High Court, I felt that the view expressed by the earlier Special Benches was not proper. I therefore subscribe to the view taken by my other brothers.
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1987 (10) TMI 91 - ITAT CHANDIGARH
... ... ... ... ..... Tribunal s order dt. 30th Oct., 1985 was recalled for fresh disposal. Against the above background it is not understood how the Revenue can be said to be aggrieved when its own application had been accepted. In fact, the Tribunal never considered the issue on merits so far as the order in M.P. No. 37 of 1986 is concerned. The issues involved were, however, considered by the Tribunal in its order of the same dt. In ITA No. 508 and C.O. No. 22 of 1984. The revenue has not filed any reference application arising out of the order of the Tribunal dt. 29th Decision., 1986 in I.T.A. No. 508 and C.O. No. 22 of 1984. The reference application is against the order in M.P. No. 37 of 1986. We have noted above that the issues involved do not arise out of the Tribunal s order in M.P. No. 37 of 1986 as by that order only the earlier order of the Tribunal was recalled. The reference application is, therefore, rejected as infructuous. 4. In the result, the reference application is dismissed.
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1987 (10) TMI 90 - ITAT CALCUTTA-D
... ... ... ... ..... n that event the ITO should have allowed deduction as per the Board s instruction No. 1432 F, No. 200/155/80-IT (AI) dt. 26th Nov., 1981. The AAC observing that the Board s instructions are binding on all officer subordinate to it held that the deduction should have been allowed when the ITO has treated the amount of Rs. 35,041 as income. However, since the AAC held that the aforesaid amount does not constitute income and directed deletion of the addition, the ground raised before him in the alternative, become redundant. The grievance raised by the assessee in his cross objection is that the AAC should have recorded a finding on the ground raised before him relating to the admissibility of the deduction from the total prize money. The cross objection is rendered infructuous as the departmental appeal is to be dismissed. 9. In the result the departmental appeal fails and is hereby dismissed. The cross objection filed by the assessee becomes infructuous and is also dismissed.
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1987 (10) TMI 89 - ITAT CALCUTTA-D
... ... ... ... ..... by the forest authorities for infraction of law. The assessee paid Rs. 5,213 as fine in forest centre. The ITO was of the view that since the fine was imposed for infraction of law, the same was not allowable as deduction. He accordingly disallowed the claim. On appeal the CIT(A) deleted the disallowance. 31. We have heard learned authorised representatives for the parties. Similar issue came up before the Tribunal in the appeal for the asst. yr. 1979-80. A perusal of para 6 of the Tribunal s order in the said case shows that the Tribunal following its earlier order for the asst. yr. 1979-80, restored the matter to the file of the ITO. Following the order of the Tribunal for the asst. yr. 1979-80, we restore this particular issue to the file of the ITO in this year also for decision afresh in the light of the directions given by the Tribunal for the asst. yr. 1979-80. 32. In view of what has been said above, both the appeals are partly allowed to the extent indicated above.
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1987 (10) TMI 88 - ITAT CALCUTTA-B
... ... ... ... ..... r s. 57(iii). He has only looked to the decisions in the cases of Sherwani Brothers Co. Ltd. vs. CIT(1953) 23 ITR 51 (All) and S.P.V. Bank Ltd. vs. CIT (1981) 20 CTR (Ker) 31 (1982)126 ITR 773 (Ker) which dealt with deductions admissible under s. 10(2)(xv) of the Indian IT Act, 1922 and s.37(1) of the IT Act, 1961 respectively. So, we set aside the order of the CIT(A) and the order of the ITO and restore the matter back to the ITO. He shall look into the details of expenditures claimed by the assessee and deal with their allowability from the law point of the necessity of the assessee company to retain its status as a company under the Companies Act, 1956 and the expenditure directly on indirectly incurred for earning the income which has been assessed under the head other sources in the light of the principles laid down by the High Court the Tribunal in the above cases of 129 ITR 58 and 13 CTR 549. 7. In the result, the appeal is treated as allowed for statistical purposes.
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1987 (10) TMI 87 - ITAT CALCUTTA-B
... ... ... ... ..... orce in the contention of the assessee. No doubt the cost of liquidation is payable out of the assets of the company in priority but thereby it cannot, however, be presumed that all the costs and the expenses are legally deductible under s. 57 of the IT Act. At the same time, a company in liquidation has to maintain its existence as a company in liquidation and for that purpose it has to incur certain expenses on establishment and other necessary expenses to maintain such establishment. The items of expenditure pressed in full by the assessee herein are salary and wages amounting to Rs. 50,785 and rent amounting to Rs. 11,726 as against which the amounts allowed by the ITO are Rs. 7,223 and Rs. 2,819 respectively. 9. In the circumstances of the case and for the reasons aforesaid, the above two items of expenses have to be allowed in full and we direct the CIT(A) to compute the deduction of these items of expenses accordingly. 10. In the result, the appeal is allowed in part.
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1987 (10) TMI 86 - ITAT BOMBAY-D
Depreciation, Carry Forward And Set Off Of Unabsorbed Depreciation ... ... ... ... ..... arry forward u/s. 72 as a business loss. We are not impressed with the argument of the learned Departmental Representative that when the depreciation was allowed in assessment year 1970-71 it was allowed u/s. 32 which section is within section 28 to 43A and therefore prohibited by the non obstinate provision of sec. 44B. The reason is that section 44B does not deal with the carried forward loss of the earlier years and such loss though computed as per other provisions of the Act is only dealt with sec. 72 of the Act. 18. In view of the aforesaid discussion, we are of the opinion that the assessee s claim for the unabsorbed depreciation of Rs. 46,666 should be allowed to be set off u/s. 72 of the Act. The authorities below were not justified in rejecting this claim of the assessee. However, the remaining loss of Rs. 8,57,659 which pertains to assessment year 1969-70 lapsed and was rightly not allowed set of by the authorities below. In the result, the appeal is partly allowed.
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1987 (10) TMI 85 - ITAT BOMBAY-D
Capital Gains ... ... ... ... ..... e Supreme Court in Sunil Siddharthbhai s case. Assessee s first ground of appeal in ITA No. 3493 (Bom.) /84 is allowed. (2) We do not agree that CIT (A) erred in setting aside the assessment made by the ITO merely because he held that section 52(1) was not properly established. since he had given directions for reference to the Valuation Officer, he was justified in setting aside the assessment order. We do not accept the assessee s claim that having given the finding in respect of section 52(1) in favour of the assessee, CIT (A) should have ipso facto allowed the assessee s appeal. Therefore, assessee s first appeal, being ITA No. 3493 (Bom.) /84, is allowed in part. (3) Assessee s second appeal, being ITA No. 5106 (Bom.) /86, is allowed in full since, as stated earlier, we have already given a finding on merits in favour of the assessee following a Supreme Court decision in Sunil Siddharthbhai s case. (4) The departmental appeal, being ITA No. 5752 (Bom.) /86, is dismissed.
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1987 (10) TMI 84 - ITAT BOMBAY-C
Capital Gains, Chargeable As ... ... ... ... ..... rate returns and they have been individually assessed under section 143(3). In the circumstances, we are of the view that the assessment framed by the ITO jointly against the legal heirs of Ramrao K. Rupji was not proper. The final order of the CIT (A) has to be sustained although for a different reason. 15. With regard to the cross-objections, the grounds do not survive in view of the finding we have recorded in the revenue s appeal. Even so, we may state that the question whether the lands were agricultural or not was not before the authorities below at any time. The ground does not emerge either from the order of the ITO or from the first appellate order. With regard to the jurisdiction, we have already held that a joint assessment against all the heirs was not proper and, as such, no specific finding need be recorded on the first ground raised in the cross-objections. 16. In the result, both the appeal by the revenue and the cross objections by the assessee are dismissed.
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1987 (10) TMI 83 - ITAT BOMBAY-C
Hindu Undivided Family ... ... ... ... ..... on, the ratio of this decision squarely covers the issue against the assessee and in favour of the department, particularly when we see that the family of Bharat consisted of himself and his wife, the source of earning of partnership income was the gift received by him very which, as a coparcener, he had complete control and likewise he had complete control over the income that was generated from out of the investment of those funds as long as he did not get a son. For the years under appeal, we would hold that the income by way of share of profits from the partnership firm would be assessable in the hands of Bharat B. Shah in his individual capacity. We may state in passing that the AAC, who passed the second order, completely failed to consider.the import of the directions of the Tribunal which have been reproduced hereinabove. We would, therefore, decide the issue on the material produced before us as indicated above. 5. In the result, the departmental appeals are allowed.
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1987 (10) TMI 82 - ITAT BOMBAY-C
Valuation Of Assets, Immovable Property ... ... ... ... ..... ted in respect of the Versova property that.even under the Urban Land Ceiling Act, the maximum rate of compensation available would be Rs. 10 per sq. metre. The area of this land is 32,381 sq. yards. The area in terms of sq. metres has not been indicated. Therefore, it would not be unfair to the assessees if we direct that the property should be valued Rs. 10 per sq. metre. The WTO may obtain from the assessees the figures of its area in terms of sq. metres for such valuation. In this context, it may be stated that the argument advanced by Shri Mukherji about plot No. 17/A1 is not acceptable because no evidence of the fact that this was adversely possessed was produced before us to controvert what has been stated by the CWT (A) in this behalf in para 22 of his order for the assessment year 1977-78. .10 In respect of other properties, the valuation made by the CWT (A) which was not seriously pressed by Shri Mukherji is confirmed. The appeals will be treated as allowed in part.
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1987 (10) TMI 81 - ITAT AMRITSAR
... ... ... ... ..... J.M. It is settled law that the order of the Honourable High Court within the jurisdiction of which, the Bench of the Tribunal is functioning, is binding on it. Whatever doubts about the applicability of this decision for the mercantile system of accounting has been raised, were raised by the counsels of the parties before their Lordships of Punjab and Haryana High Court in the case Sirsa Industries were removed, leaving no chance for any doubt as therein it is held that the sales-tax collected is a revenue receipt and if it is not paid in the previous year, relevant for the assessment year under consideration, then deduction for it is not allowable, even if the system of accounting is mercantile, when this is so, then question does not arise in the case to accept the claim of the assessee. Be that as it may, the amount involved is meagre which is not worth for difference of opinion and as such, I agree with the conclusion arrived at by my ld. brother Shri. P.K. Mehta, A.M.
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1987 (10) TMI 80 - ITAT ALLAHABAD
Powers Of Tribunal ... ... ... ... ..... g regard to the entirety of the facts and circumstances of the case. The fact that the assessee has been unsuccessful in the second appeal as well goes to indicate that no prima facie case exists for the grant of stay as claimed. Therefore, we turn down the request of the assessee to stay the recovery proceedings. 7. We have turned down the assessee s request on merits. That apart, there is yet another aspect of the case on account of which the assessee is not entitled to the stay as claimed by him. The petition for stay was moved along with the application for reference under section 256(1) of the Act. The application for reference is still pending and no reference has yet been made to the Hon ble High Court. Unless a reference is made to the High Court, it is not possible to hold that the appeal by the assessee is pending with the Tribunal, and unless there is an appeal pending, no stay can be granted. 8. In the result, the petition moved by the assessee is hereby rejected.
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1987 (10) TMI 79 - ITAT AHMEDABAD-C
... ... ... ... ..... c.). Sec. 229 pertains to the recovery of penalties, fine, interest, and other sums and therefore, is irrelevant to the controversy. 5.1. With regard to the levy of penalty, we have no hesitation in confirming the action of the authorities below. Even before us though it is stated in ground No. 3 that a reply was given yet no copy thereof was submitted before us. In the interest of justice, therefore, we confirm the levy of penalty. However, the amount of penalty shall have to be worked out only on the amount of the tax remaining payable as finally determined after giving appeal effect and therefore, we restore the case to the file of the ITO who shall work out the penalty to the extent of 10per cent of the tax remaining payable by the assessee and by doing so he shall exclude any other amount in respect of interest payable by the assessee. We, therefore, modify the order passed by the Commissioner(A). 6. In the result, the appeal is allowed in part for statistical purposes.
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1987 (10) TMI 78 - ITAT AHMEDABAD-C
Business Expenditure, Allowability of ... ... ... ... ..... sale-deed. And without acquiring transferable rights in the agricultural land at Thaltej the company could neither treat it as an asset, in acquiring of which it could be held entitled to any expenditure, nor as a stock of trade (even if it be assumed for the sake of arguments only) so as to claim the interest payment on borrowings therefor as business deduction. Since it was not acquired either as an asset or as a stock of trade (for argument only) it was not reflected in the Balance Sheet, and rightly so, to our mind. It is the admitted case that acquisition of the said land has now become an impossibility and the contract has frustrated. Even if the transaction had materialised the interest payments would have capitalised the value of the land acquired and income therefrom would have been exempted income being agricultural income. We thus find ourselves in full agreement with the views of the ITO. 13. In any event we find no substance in this appeal and reject it outright.
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1987 (10) TMI 77 - ITAT AHMEDABAD-C
Bad Debts, Business Expenditure, Assessment, Res Judicata ... ... ... ... ..... eductibility as a bad debt or allowability as a business expenditure or as a business loss . For, each assessment is to be decided on its own merits and is independent of the assessment preceding or succeeding it. An observation on a fact which was not in issue in earlier year can hardly be pressed into service as precedent in subsequent year. Where facts of two assessment years materially differ and the questions having arisen for the consideration of the Tribunal also differ in their very nature, as is found by us in this case, doctrines of res judicata and/or estoppel, which are by themselves not applicable to proceedings under the Act, cannot be applied and certain observations of the Tribunal, made in an earlier year, with regard to the possibility of the existence of a fact, which had not directly arisen for its consideration, can seldom partake the character of precedent for subsequent year. 0. In the result we find this appeal without any force and dismiss it as such.
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1987 (10) TMI 76 - ITAT AHMEDABAD-C
... ... ... ... ..... facts and circumstances of the case and material on record. The respondent is thus found no less than a part of a device for evading taxes. 22. In the final analysis we find absolutely no reasons at all to sustain the order under appeal. We, therefore, set aside the same accordingly. In our opinion the respondent was not at all a validly and legally constituted assessable entity but we cannot go beyond the order of the ITO, making protective assessment. Under these circumstances we can do no better than to restore his order. 23. The appeal is allowed. Per Shri P.J. Goradia Accountant Member -- I agree with the reasoning and conclusion arrived by my learned brother. There is no AOP in existence in this year within the meaning of sub-clause (v) of section 2(31) of the IT Act, giving the meaning of person on which charge is created under section 4 of the Act. Hence the return of income even if filed is required to be treated as non est and ignored as in substance done by the ITO
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1987 (10) TMI 75 - ITAT AHMEDABAD-B
... ... ... ... ..... as computed in accordance with ss. 22 to 25 shall be included in the total income of the respective owners. Therefore, the charge of tax itself is avoided. Such AOP is not an AOP in law. There is no question of any representative assessment. Therefore, the return of income even if filed should have been treated as non-est and should not have been acted upon. The assessment made on the basis of such return is null and void ab initio. Therefore, no addition can be sustained on the basis of so-called assessment as is done in this case. Therefore, in effect the decision taken by the AAC directing the ITO to accept the value of the construction shown by the co-owners is confirmed though on different reasoning and, therefore, no consequently, orders are required to be passed in the case of co-owners i.e. tenants-in-common. If at all anything is required to be done the name of assessee is required to be struck off from the register of the assessees. In the result the appeal fails.
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1987 (10) TMI 74 - ITAT AHMEDABAD-B
Benami Transactions, Firm, Registration ... ... ... ... ..... income really accrued to the old firm but having been applied subsequently for the benefit of the new firm. We would again clarify that we are not upholding the finding of the Income-tax Officer that the business of the old firm in respect of the carting was diverted to the new firm and therefore, part and parcel of the old firm. The business intended to be undertaken by the new firm is a new business altogether. 12. In view of our aforesaid discussion and decisions, we uphold the decision of the Commissioner (Appeals) regarding grant of registration to the new firm but set aside the decision on the issue of addition of income of the.new firm in the hands of the old firm by holding that whole income of the new firm is required to be added and taxed in the hands for the old firm. The Income-tax Officer is directed to pass appropriate orders in the case of the firm as also partners. 3. In the result, the appeal ITA No. 2267 is allowed while the appeal ITA No. 2268 is dismissed.
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