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1991 (1) TMI 65
Exemptions, Wealth Tax ... ... ... ... ..... is by itself ? It is brought to our notice that both the questions are concluded in favour of the assessee and against the Revenue by the decision of this court in CWT v. Mubarakali Khan and CWT v. Mujahid Ali Khan 1980 123 ITR 101, wherein it has been held that preparation of biris from tendu leaves and tobacco can be called manufacturing or processing of goods within the meaning of section 5(1)(xxxii) of the Wealth-tax Act.If it is manufacturing or processing of goods, it would also constitute an industrial undertaking. Accordingly, the two questions are answered in the affirmative, that is, in favour of the assessee and against the Revenue. No costs.
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1991 (1) TMI 64
Business Expenditure, Interest On Borrowed Money ... ... ... ... ..... of the income of the business and that all the transactions were carried on in the same place of business, to hold that the business of dealing in shares and the business of manufacture of sugar and other commodities constituted the same business within the meaning of section 24(2) of the Indian Income-tax Act, 1922. On the facts found by the Tribunal and referred to in detail earlier, we do not have the slightest hesitation in upholding the legal inference drawn by the Tribunal that the transport business as well as the other businesses carried on by the assessee formed one single composite business. We may observe that our attention was drawn to certain other decisions, but we are of the view that none of those decisions would be of any assistance to the Revenue, on the factual findings recorded by the Tribunal and referred to earlier. We, therefore, answer the question referred to us in the affirmative and against the Revenue. There will be, however, no order as to costs.
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1991 (1) TMI 63
... ... ... ... ..... . It cannot operate in an impossible situation like the one before us, where one partner has been expelled and further the injunction of the High Court restrains him from exercising his right as a partner. In our view, the prescribed declaration in terms of rules 24 and 22(5) must be signed by those partners who are, admittedly, partners of the firm at the material time and not by person who has been expelled from the partnership in accordance with the provisions of the partnership deed and who is otherwise also prevented from acting as a partner. In our view, therefore, the conditions prescribed for continuation of registration under section 184(7) in this case have been satisfied and the Tribunal was right in holding that the assessee-firm was entitled to continuation of registration. For the reasons aforesaid, we answer the question in this reference in the affirmative and in favour of the assessee. There will be no order as to costs. BHAGABATI PRASAD BANERJEE J. -I agree.
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1991 (1) TMI 62
Firm, Reference ... ... ... ... ..... ask for different questions to be referred in his application under section 256(2) than the questions which he asked to be referred in his application under section 256(1). Probably, he may reframe the questions but even then he must state the said facts expressly in his application. Sri S. P. Gupta, learned counsel appearing for the assessee, stated before us that the questions which are at variance with the questions asked for reference before the Tribunal may be ignored and only one question which is stated as question No. 1 in this application may be referred. He has mainly placed reliance on a decision of the Punjab and Haryana High Court in Jagan Nath Pyare Lal v. CIT 1973 92 ITR 207. Having heard counsel for both the parties, we are of the opinion that question No. 1 does arise from the order of the Tribunal and, accordingly, the applications are allowed in part. The Tribunal is directed to state question No. 1 aforementioned under section 256(2) of the Act. No costs.
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1991 (1) TMI 61
HUF, Wealth Tax ... ... ... ... ..... marriage expenses (at the case may be), and when no such right survives, the status as a member of the family also vanishes. This contention of learned counsel is based on the assumption that the membership of the family depends upon the existence of a right to maintenance we find no such principle stated in Hindu law. The position is that, if a female is a member of a joint family, as incidental thereto, she has the right to be maintained and, in the case of unmarried daughters, claim to marriage expenses out of joint family properties (Vide Mayne s Hindu Law, 12 th Edn., page 147, regarding marriage expenses). A female is a member of a joint family, not because of any inherent right over the joint family properties, but by virtue of a particular relationship with the male members of the family. In view of the above, we agree with the ultimate conclusion of the Appellate Tribunal. The answer to the question referred, therefore, is in the affirmative and against the assessee.
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1991 (1) TMI 60
Estate Duty, Notice, Reassessment ... ... ... ... ..... ndents were called upon to file a counter. They have filed a counter-affidavit. We have perused the same. We find that there is neither any allegation that there was any failure to disclose the facts or suppression of material facts nor is there any allegation that the authorities received some information on the basis of which they formed the opinion that property chargeable to estate duty has escaped assessment or was under-assessed. Indeed, the counter-affidavit says in paragraph 7 that the reason for issuing the notice under section 59 was mentioned in the said notice specifically , when the notice does not contain any such reasons and, as stated above, is in the prescribed proforma only. All this shows that the notice has been issued mechanically and without there being relevant material giving rise to a reasonable belief in the authority. The impugned notice must, accordingly, be held to be bad and is quashed herewith. The writ petition is allowed accordingly. No costs.
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1991 (1) TMI 59
Arbitration Award, Effect Of Mention Of Wrong Provision ... ... ... ... ..... amount had been allowed as expense in the earlier years, section 41 ( 1 ) was not applicable. Question No. 2, however, is a question of law especially in view of the fact that the Tribunal has decided, as a point of law, that the Revenue was not entitled to agitate that the assessee was liable to be taxed even de hors section 41(1) of the Act. The question proposed is wide enough to include the said contention. In view, however, of the fact that this contention of the Revenue was not decided by the Tribunal on merits, we would reframe question No. 2 and direct the Tribunal, accordingly, to state the case and refer the following question to this court Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the Revenue could not contend that the amount of Rs. 6,50,000 was taxable as income for the assessment year 1979-80 even without invoking the provisions of section 41(1) of the Act ? The petition stands disposed of. No order as to costs.
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1991 (1) TMI 58
Firm, Partners ... ... ... ... ..... owever, refused to accede to the said plea and included the entire income from the said business in the individual assessment of the assessee. On appeal, the Appellate Assistant Commissioner allowed the appeal holding that inasmuch registration has been granted to the aforesaid partnership firm, the assessee s share must be only half of the income arising from the said business. This view has been affirmed by the Tribunal. The assessment relating to grant of registration to the firm has become final. Indeed, a reference arising in that behalf (Income-tax Reference No. 151 of 1979 CIT v. Moradabad Gun House 1991 192 ITR 211 (All)) has been answered by us holding that the order refusing to condone the delay in filing the application for registration of the firm is an appealable order. In this view of the matter, the Tribunal s order is perfectly in order. The question referred is answered in the affirmative, that is, in favour of the assessee and against the Revenue. No costs.
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1991 (1) TMI 57
Appeal To AAC, Firm ... ... ... ... ..... Nagarmal Bisheshar Lal 1991 190 ITR 468, the question referred must be answered in the following words The order of the Income-tax Officer refusing to condone the delay in filing the application for registration of the firm is appealable inasmuch as in fact, it amounts to refusing to register the firm and thus falls under section 185(l) (b) which is expressly made appealable. The question is answered accordingly. No costs.
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1991 (1) TMI 56
Business Expenditure, Entertainment Expenditure ... ... ... ... ..... ses and hence were allowable deduction under section 37(2B) of the Income-tax Act, 1961 ? In view of the Full Bench decision of this court in Phool Chand Gajanand v. CIT 1989 177 ITR 265, this question has to be answered in the negative, that is, against the assessee and in favour of the Revenue. Answered accordingly. No costs.
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1991 (1) TMI 55
Charitable Purpose, Exemptions ... ... ... ... ..... tax Act, 1961 ? It is brought to our notice that, in the case of this very assessee, for the previous assessment year, this court has dealt with and answered an identical question in I. T. R. No. 747 of 1978, disposed of on December 18, 1990 (CIT v. Panchayati Akhara Nirmal 1991 190 ITR 121 (All)). Following the said judgment, the question referred is answered in the negative, i.e., in favour of the Revenue and against the assessee. No costs.
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1991 (1) TMI 54
Advance Tax ... ... ... ... ..... not mentioned therein that the accounts had to be prepared as on June 30, 1977, from the books of account which were closed on October 31, 1977. This explanation was not put forth before the tax authorities. Secondly, in the documents which were filed before the Tribunal giving the explanation with regard to the underestimation of the income, it is only a figure of Rs. 7,76,000 has been mentioned. It is mentioned that this income could not be anticipated. With regard to the other expenses, there is a mention of overestimation and with regard to other incomes, there is a mention of underestimation. Merely because there has been an overestimation and underestimation or merely because the Tribunal has referred to a figure of Rs. 7,76,000, it cannot be regarded as an explanation justifying such a variation between the figures of the income returned and the estimate filed. The conclusion of the Tribunal is a pure question of fact and we do not see any question of law. Dismissed.
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1991 (1) TMI 53
Accounting, Business Expenditure ... ... ... ... ..... d is 1968-69. By that year, section 43B had not come into force. The assessee was maintaining his accounts on the mercantile basis therefore, purchase tax collected by him, which was payable by him but not paid during the relevant accounting year, is all the same deductible as held by this court in CIT v. Poonam Chand Trilok Chand 1976 105 ITR 618 (All) and Addl. CIT v. Durga Prasad Kamta Prasad 1991 188 ITR 573 (All). Accordingly, the question referred is answered in the affirmative that is in favour of the assessee and against the Revenue.
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1991 (1) TMI 52
... ... ... ... ..... ch by the Revenue is necessary in the matter of recognising the nature of an account maintained by the assessee so that the basis of a concluded assessment would not be ignored without actually reopening the assessment. The principle is similar to the cases where it has been held that debt which had been treated by the Revenue as a good debt in a particular year cannot subsequently be held by it to have become bad prior to that year. Sri K. R. Prasad, learned counsel for the assessee, referred to a decision of this court in Bit Tul (P.) Ltd. v. CIT (ITRC 141 of 1977 dated 29-7-1980) wherein it was held that there should be material to justify the conclusion that any borrowed money by the assessee in a year to which interest had been paid had been diverted for non-business purpose. For the purpose of this reference, it is unnecessary to apply the said principle. Accordingly, we answer the question referred to us in the affirmative and against the Revenue. Answered accordingly.
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1991 (1) TMI 51
Debt Owed, Net Wealth, Wealth Tax ... ... ... ... ..... learly show that the outstanding amount was being held by the assessee for and on behalf of the tenants. It was, in other words, a debt due to the tenants because the Tribunal has found that if the tenancy was determined, then the amount had to be returned and could not be retained by the assessee. In view of these findings of fact, the answer to the question proposed is self-evident. It was then contended by Mr. Rajindra that the entire amount of advance rent could not be regarded as debt being due to the tenants. We, however, find that, in the order dismissing the application under section 27(1) of the Wealth-tax Act, 1957, it has been observed by the Tribunal that it is only the unadjusted amount which will remain as a liability which can be allowed as a deduction under the Act. Even in the order of the Tribunal, the reference is to the outstanding amount which could be regarded as a debt due. In our opinion, no reference is called for. We, therefore, dismiss the petition.
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1991 (1) TMI 50
Business Expenditure, Disallowance, Entertainment Expenditure ... ... ... ... ..... . Following the rule in Heydon s case 1584 76 E. R. 637, it appears to us that to construe the true import of sub-section (2B) of section 37 which starts with a non-obstante clause, it is not only legitimate but convenient to refer both to the former Income-tax Act and the state of uncertainty brought about due to conflict of views between the different High Courts and that Explanation 2 seeks to provide a remedy by not only explaining but by removal of doubts declaring that entertainment expenditure includes expenditure or provision on hospitality of every kind by the assessee to any person whether by way of provision of food or beverages or in any other manner whatsoever. In view of the above discussion, we have no hesitation in following the ratio of the decision of the Full Bench of the Kerala High Court in Reddiar s case 1977 106 ITR 610. We, accordingly, answer questions Nos. 1 and 2 in the negative, that is, in favour of the Revenue and against the assessee. No costs.
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1991 (1) TMI 49
Advance Tax, Penalty ... ... ... ... ..... more than the tax demanded under section 210 of the Act and that the penalty was imposed only because the estimate was filed late by two days, and that this was only a technical default. It has come to the conclusion that, on the facts of this case, penalty proceedings should not have been initiated. In our opinion, the said conclusion is a finding of fact and no question of law arises. The petition is, accordingly, dismissed.
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1991 (1) TMI 48
Appeal To AAC, Firm ... ... ... ... ..... n Income-tax Officer the power to condone the delay in filing the application for registration, if he is satisfied that the firm was prevented by sufficient cause from making the application before the prescribed date. An order passed under this proviso is, however, not made appealable under section 246. Since such an order in fact amounts to an order rejecting registration, courts have treated such an order as one under section 185(1)(b) which is expressly made appealable under section 246. Learned counsel for the Revenue, however, relies upon a decision of the Orissa High Court in New Orissa Traders v. CIT 1977 107 ITR 553, wherein a contrary view is taken. It is held by the Orissa High Court that an order made under the proviso to section 184(4) is not appealable. But, in the light of the decision of this court, we cannot agree with the Orissa view. For the above reasons, the question is answered in the affirmative, i.e., in favour of the assessee and against the Revenue.
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1991 (1) TMI 47
... ... ... ... ..... allowed the appeal. So far as the position obtaining under section 271(1)(c) read with the Explanation then in force is concerned, there can be no quarrel. It is authoritatively set out by the Supreme Court in CIT v. Mussadilal Ram Bharose 1987 165 ITR 14. On a perusal of the judgment of the Tribunal, however, we are satisfied that the approach adopted by it is in no way contrary to the principle of the said judgment. As a matter of fact, the Tribunal did not go by the rule of burden of proof at all. It dealt with the grounds given by the Inspecting Assistant Commissioner for imposing the penalty separately and specifically and negatived each of them. We do not think that there is any error in the approach of the Tribunal. Accordingly, question No. 1 is answered in the negative, that is, in favour of the assessee and against the Revenue. For the same reasons, question No. 2 is answered in the affirmative, that is, in favour of the assessee and against the Revenue. No costs.
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1991 (1) TMI 46
Question Of Law ... ... ... ... ..... No. 3 (for the year 1983-84) and question No. 4 (for the year 1985-86) are concerned, they are identical. They relate to proper opportunity of hearing said to have been denied to the assessee. But the Tribunal has observed in its order that no such argument was addressed before it nor dealt with by it in its order. It cannot, therefore, be said that the questions arise from the order of the Tribunal. So far as the other questions are concerned, they are all questions of fact. It appears that a raid was conducted in the premises of the assessee and certain jewellery, cash and other properties were seized, which, inter alia, showed certain investment in construction of a house property. Since the assessee practically gave no explanation, additions were made on that account. The mere fact that the assessee is an 80-year old man cannot be an explanation for non-participation or for not making an attempt to establish his contentions. The applications are, accordingly, dismissed.
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