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1991 (1) TMI 45
Search And Seizure ... ... ... ... ..... of retention was said to have extended. Counsel for the petitioner, however, states that there was no similar order in between, i.e., between February 6, 1986, and March 29, 1988. With view to ascertain the correct state of facts, time was given to the respondents to Me a counter-affidavit but, in spite of giving repeated opportunities, no counter-affidavit has been filed till now. We do not think that any further time ought to be granted. In the circumstances, the books of account seized from the petitioner s premises on February 6, 1986, under section 132(1) of the Act shall be returned to the petitioner within a period of 30 days of the production of certified copy of this order by the petitioner. If the authority thinks that any of the account books or any portions thereof are relevant for their purposes, they are entitled to take photostat copies of such books or portions of the books and return them thereafter. The writ petition is disposed of with the above direction.
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1991 (1) TMI 44
... ... ... ... ..... ed earlier by the Tribunal and the applications under sections 256(1) and 256(2) have been dismissed. May be that the Revenue is approaching the Supreme Court against this Court s order under section 256(2) but that cannot be a reason for directing reference of the question which stands concluded by the earlier decision of this court. The applications are dismissed.
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1991 (1) TMI 43
Estate Duty, Gift ... ... ... ... ..... ct. We, therefore, answer the second question referred to us in the affirmative and against the accountable person. We may now take up the only question referred at the instance of the Controller of Estate Duty. That pertains to the inclusion of the value of the share of the lineal descendants. In V. Devaki Ammal v. Asst. CED 1973 91 ITR 24 (Mad), section 34(1)(c) of the Act was challenged as being discriminatory and violative of article 14 of the Constitution of India and that was upheld on the ground that section 34(1)(c) goes far beyond the charging section, making a discrimination between the coparceners who died leaving lineal descendants and others, in the imposition of tax burden and providing for a higher incidence of tax on the property passing on the death of the former. In view of this, the question referred to us at the instance of the Controller of Estate Duty is answered in the affirmative and against the Controller. There will be, however, no order as to costs.
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1991 (1) TMI 42
Investment Allowance, Plant ... ... ... ... ..... llation is a scientific apparatus or not, but the question is whether the plant is as defined under section 43(3). The definition is an inclusive definition, as the very definition indicates that articles like books are also included in the definition of plant. Further, it cannot be ruled out that a telephone installation for internal communication is not a scientific apparatus. Mr. Chanderkumar s contention is based on the definition of scientific research found in section 43(4). But that is an entirely different definition which has nothing to do with the concept of plant or scientific apparatus. The aforesaid decisions no doubt arise under section 33 of the Act but the principles will be equally applicable to cases falling under section 32A. The concept of plant will be the same whether it falls under section 32A or 33 (1). In these circumstances, we have no doubt that the answer will have to be in the affirmative and against the Revenue. Reference is answered accordingly.
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1991 (1) TMI 41
Capital Gains ... ... ... ... ..... . We are not in any manner concerned with such a question in this case and it is, therefore, unnecessary for us to further notice that decision. CGT v. A. M. Abdul Rahman Rowther 1973 89 ITR 219 (Mad), reiterates the principle that assignment of a portion of the share capital and realignment of shares in the partnership and the profit-sharing ratio by the assessee would amount to a gift chargeable to gift-tax. That decision again is rested on the definition of gift occurring in the Gift-tax Act, 1958, and does not in any manner assist the assessee. On a due consideration of the facts and circumstances of the case and the decisions relied on by counsel on both sides, we hold that the Tribunal was quite right in concluding that the sum of Rs. 25,000 received by the assessee cannot be regarded as capital gains for purposes of tax treatment. 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 40
Allowing Gratuity, Allowing Remuneration To Employees, Depreciation ... ... ... ... ..... y when the motor car and the jeep have the following common features (a) both the vehicles are mounted on wheels upon which they run over the surface of the land (b) both the vehicles are guided and controlled by a person riding upon or in them (c) both are designed and intended to carry one or more persons and (d) both are propelled by power not supplied from any source external to themselves but which is for the time being stored and generated within themselves and both are self-moving vehicles. In these circumstances, the Tribunal rightly held that jeeps are only motor cars for the purpose of depreciation and disallowed a sum of Rs. 4,493 being the excess cost of jeeps over Rs. 25,000. We, therefore, answer the second question referred to us in the affirmative and against the assessee. In the result, we answer both the questions referred to us in the affirmative and against the assessee. The Revenue will be entitled to the costs of this reference. Counsel s fee is Rs. 500.
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1991 (1) TMI 39
... ... ... ... ..... ction is made to the attachment or sale of any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed. In view of the said forum available, it is not necessary or proper for us to express any opinion on the several factual and legal contentions urged by both the sides. It is sufficient to direct that the Tax Recovery Officer shall proceed to investigate and adjudicate upon the objections filed by the petitioner on December 28, 1988 (annexure III to the writ petition) in accordance with law. The further steps to be taken against the said house shall depend upon the result of such inquiry. With the above observations, the writ petition is disposed of. There shall be no order as to costs.
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1991 (1) TMI 38
Bad Debt, Interest Credited But Not Received ... ... ... ... ..... ments to be fulfilled under section 36(1)(vii) of the Act. It has been pointed out by the Division Bench that section 36(1)(vii) of the Act requires that the debt should have been established to have become a bad debt in the previous year concerned and that the information of the assessee whether the debt had become bad and if so when is not decisive for enabling the assessee to claim allowance, but that the satisfaction of the Income-tax Officer on evidence that the debt had actually become bad during the accounting year is necessary. The Tribunal, in this case, had merely proceeded to act upon the information of the assessee in this regard and, as pointed out earlier, has not considered the facts and circumstances having a bearing upon the bona fide belief of the assessee that the debt in question had become bad. We, therefore, answer questions Nos. 1 and 2 referred to in T. C. No. 233 of 1990 in the negative and in favour of the Revenue. There will be no order as to costs.
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1991 (1) TMI 37
Search And Seizure, Writ ... ... ... ... ..... o be made in due course. Under the circumstances, it would not be appropriate to go into the several contentions raised, namely, whether the authorities had material before them to enable them to form the requisite belief which alone empowers the authority to take action under sub-section (1) of section 132, or whether the authorities were justified in not releasing the amount for payment as requested by the petitioner. A copy of the order passed under section 132 has been placed before us according to which the total tax liability is more than Rs. 15,00,000, and if the penalty amount is included, then the liability is more than Rs. 20,00,000. In these circumstances, we are of the opinion that no order can be passed except to observe that it will be open to the petitioner to urge all such points available to him in law in the appeal provided by law against an order passed under sub-section (5) of section 132 of the Act. The writ petition is, accordingly, dismissed. No costs.
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1991 (1) TMI 36
Export Market Development Allowance, Weighted Deduction ... ... ... ... ..... n agents at U. A. E., England and Australia. Mr. Bagchi, appearing for the Revenue, has fairly drawn our attention to the decision of the Kerala High Court in CIT v. Pooppally Foods 1986 161 ITR 729. In that case, the facts found by the Tribunal were that the payment was made to an agent outside India and that it was in the nature of commission. There, the Kerala High Court held that the commission paid to an agent in a foreign country for promotion of export trade would attract any one of the sub-clauses (ii), (iii) (iv) and (viii) of clause (b) of section 35B(1) of the Act. In our view, on the facts of this case, the expenditure, having been made by way of commission to agents in foreign countries for promotion of the business, would fall within the purview of sub-clause (iv) of section 35B(1)(b). For the reasons aforesaid, we answer all the three questions in the affirmative and in favour of the assessee. There will be no order as to costs. SHYAMAL KUMAR SEN J. - I agree.
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1991 (1) TMI 35
Application To Direct Reference, Export Market Development Allowance, Limitation, Revision, Weighted Deduction
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1991 (1) TMI 34
Business, Interest, Other Sources ... ... ... ... ..... the Income-tax Officer must consider the expenditure in connection with carrying on business, otherwise, he would be allowed only the expenditure which was incurred in connection with earning of the interest income. Thirdly, the Tribunal found as a fact that earning, of the interest income arose from the utilisation of commercial assets. The Tribunal found that the funds utilised in making fixed deposits with the bank were the business funds lying temporarily in surplus with the assessee. On these facts, the income derived from the utilisation of the commercial assets would be income from business. In our view, on these facts as found by the Tribunal, the conclusion is inevitable that the interest income from fixed deposits was properly directed to be assessed under the head Business . 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 33
Capital Gains, Deduction ... ... ... ... ..... he suits instituted by Swaminathan and Amarnath in O. S. Nos. 31.8 and 319 of 1972 so that, on the sale by the assessee of the properties at Nos. 52 and 53, Lalbagh Road, Bangalore, he had an unfettered right over the sale proceeds of Rs. 85,000. No material was also placed before this court to show that the view taken by the authorities below that out of the amount of Rs. 15,000 claimed by the assessee as expenses, a sum of Rs. 3,119 was inadmissible, as that amount was spent in connection with the litigation launched by the wife of the assessee is, in any manner, incorrect. We have carefully considered the order of the Tribunal and we find that the Tribunal had taken into account all the relevant facts to conclude that the claim made by the assessee cannot be sustained. We agree with the conclusion of the Tribunal and answer questions Nos. 1 to 3 in the affirmative and against the assessee. The Revenue will be entitled to the costs of this reference. Counsel s fee Rs. 500.
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1991 (1) TMI 32
Actual Cost, Depreciation, Developement Rebate ... ... ... ... ..... sel. A Bench of this court in CIT v. Relish Foods 1989 180 ITR 454, held that the subsidy received by a person, in the position of the respondent/assessee, from the Government for setting up an industry in a backward area is really an incentive and it has nothing to do with the cost of a particular asset. In this perspective, this court held that the subsidy amount so received by an assessee cannot be deducted from the cost of assets for the purpose of allowing depreciation, development rebate, etc. In the light of the Bench decision aforesaid (180 ITR 454), the Appellate Tribunal was justified in confirming the order passed by the Commissioner of Income-tax (Appeals) for both the years holding that the assessee is entitled to the relief of depreciation, investment allowance and other deductions without deducting the subsidy amount from the cost of the assets. We answer the question referred to this court in the affirmative, against the Revenue and in favour of the assessee.
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1991 (1) TMI 31
Gift, Gift Tax ... ... ... ... ..... cing the share of the assessee from 35 per cent. to 20 per cent. ? and 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in coming to the conclusion that it is not necessary to go into the valuation of the gift ? Both the questions are to be answered in the affirmative and against the Revenue following the decision of this court in Shah (D. C.) v. CGT 1982 134 ITR 492. Reference is answered accordingly.
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1991 (1) TMI 30
Deduction, Net Wealth, Wealth Tax ... ... ... ... ..... that had already escaped assessment for the previous years. We are, therefore, of the view that there cannot be any distinction in principle regarding the deductibility of the tax paid on the income disclosed voluntarily which relates back to the respective valuation dates for which such disclosure was made. If the assessee had discharged his liability in respect of the concealed income under the Income-tax Act, he is entitled to the benefit of deduction of tax and such tax must, necessarily, be held to be a debt owed on the respective valuation date in respect of which such disclosure was made. In our view, therefore, the assessee is entitled to claim deduction of the tax liability in respect of the disclosure made under section 3(1) of the Voluntary Disclosure of Income and Wealth Act, 1976. 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. SHYAMAL KUMAR SEN J. -I agree.
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1991 (1) TMI 29
Income From House Property ... ... ... ... ..... nit is that which is used as a residence. A distinction has been made between a residential unit in the occupation of the owner for the purposes of his own residence and a residential unit let out to tenants. Where the residential unit referred to in the second proviso to section 23(1) is in the occupation of the owner for the purposes of his own residence, he does not get the concession as provided therein. Where, however, a residential unit is not in the occupation of the owner but has been let out to tenants for the purpose of their residence, the concession as admissible under the second proviso to section 23(1) will be available to the owner of the residential unit. The expression residential unit , in the context in which it is used, necessarily denotes a dwelling unit for residence. For the foregoing reasons, we answer the question in this reference in the negative and in favour of the Revenue. There will be no order as to costs. BHAGABATI PRASAD BANERJEE J. - I agree.
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1991 (1) TMI 28
Business Expenditure, Remuneration ... ... ... ... ..... r view, this case does not support the contention raised by Mr. Prasad on behalf of the Revenue. The question involved in that case was essentially whether the liability in respect of the earlier years which became enforceable in the year of account could be allowed as a deduction or not. Although the liability might have accrued earlier, the court allowed that liability as a deduction. In our view, therefore, whether the principles laid down in Kedarnath Jute Manufacturing Co. Ltd. 1971 82 ITR 363 (SC) or in Shalimar Chemical Works Pvt. Ltd. 1987 167 ITR 13 (Cal), are applied, the fact remains that the assessee is entitled to the deduction for the bonus which was also statutorily payable by the assessee in respect of the employees taken over from the Indian undertaking of the sterling company. For the foregoing reasons, we answer the question in this reference in the affirmative and in favour of the assessee. There will be no order as to costs. SHYAMAL KUMAR SEN J.-I agree.
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1991 (1) TMI 27
... ... ... ... ..... m to which reference has already been made, it is evident that the fixed deposit receipt were transferred in favour of the shareholders who alone are entitled to receive the interest. As a matter of fact, the term deposit receipts were physically handed over to different shareholders who alone were entitled to the interest thereon. If that be the position, it cannot be said that the interest on the fixed deposits would still remain the income of the company in liquidation. In any event, the company in liquidation was merely a trustee for the shareholders to whom the fixed deposit receipts had been transferred and the interest income would be assessable only as income of the beneficiaries and not as that of the trustee. For the reasons aforesaid, we answer the first question in the negative and in favour of the assessee. The second question is answered 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 26
Loss, Speculative Transactions ... ... ... ... ..... Mr. Sarangan contended no company would throw away large sums of money by purchasing shares and later sell the same at a loss and then claim the said loss to reduce the tax burden because the loss sustained in the process will be far more than the actual tax relief. Unless it is conclusively established that the assessee entered into the transaction clearly as a speculative venture, the courts cannot infer that the transaction was a speculative venture only because the assessee derived subsequently the benefit of tax reduction. In fact, the crucial time and the stage is the time when the assessee purchased the shares and if possible to find out the intention behind such a purchase, and not to draw an inference of speculation from the fact that subsequently the shares were sold at a low price. For the reasons stated above, we cannot agree with the finding of the Appellate Tribunal. Therefore, the answer to the question referred to us is in the negative and against the Revenue.
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