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1991 (1) TMI 25
Depreciation ... ... ... ... ..... missioner of Income-tax (Appeals) who directed the Income-tax Officer to treat the technical know-how payment as a revenue expenditure ? The first question is covered, against the Revenue, in the decision of this court in CIT v. Bangalore Turf Club Ltd. 1984 150 ITR 23. The second question is covered, also against the Revenue, in the decision of this court reported in Mysore Kirloskar Ltd. v. CIT 1978 114 ITR 443 FB . Consequently, both the questions are answered in the affirmative and against the Revenue.
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1991 (1) TMI 24
Depreciation ... ... ... ... ..... law in upholding the order of the Commissioner (Appeals) who directed the Income-tax Officer to treat the technical know-how payment as a revenue expenditure ? These questions will have to be answered in the affirmative and against the Revenue following the decision of this court rendered in Income-tax Reference Case No. 138 of 1986 (dated January 9, 1991) (CIT v. NGEF Ltd. 1992 195 ITR 360 (Kar)), wherein the earlier decision has been referred. Answered accordingly.
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1991 (1) TMI 23
Rectification, Review ... ... ... ... ..... question. The modification was thus made on the common request made on behalf of both the sides. In CIT v. Sunil Synchem Ltd., Alwar (Misc. Application No. 299 of 1988), the point involved was exactly similar to the point in CIT v. Indian Dairy Entrepreneurs. Since the question whether Order 47, rule 1, or section 151 or 152, CPC, could be invoked after reference under section 256 of the Income-tax Act, 1961, has been answered by the High Court was neither raised nor decided in these two cases, the order dated August 25, 1988, passed therein would not assist the Revenue. In view of the above discussions we hold that the three D. B. Civil Miscellaneous Applications Nos. 332 of 1988, 331 of 1988 and 329 of 1988 for rectification/modification or review of this courts order dated 2nd, 3rd and 6th May, 1988, respectively, passed by this court in D. B. Incometax References Nos. 135 of 1981, 79 of 1982 and 85 of 1981 do not lie and are, consequently, dismissed. No order as to costs.
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1991 (1) TMI 22
Assessment, Draft Assessment Order U/S 144B, Limitation ... ... ... ... ..... tant Commissioner concerned was a maximum of 180 days which commences from the day the Income-tax Officer forwards the draft assessment order and ends on the day when the Income-tax Officer receives instructions from the Inspecting Assistant Commissioner concerned. The Appellate Tribunal found that the entire exercise was completed by the Inspecting Assistant Commissioner concerned and by the Income-tax Officer who passed the assessment order within the time prescribed. We are, therefore, of the view that the assessment order was made within the time prescribed in clause (iv) of Explanation 1 to section 153(3). The view we have taken is also supported by the decision of the Andhra Pradesh High Court in the case of K. Venkata Ramana and Buddha Appa Rao v. CIT 1987 168 ITR 747. For the foregoing reasons, we answer both the questions in this reference in the affirmative and in favour of the Revenue. There will be no order as to costs. BHAGABATI PRASAD BANERJEE J. (sic)-I agree.
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1991 (1) TMI 21
Draft Assessment Order U/S 144B ... ... ... ... ..... not complete when only a proceeding under section 144B is pending. In fact, under section 144B, only a draft order is prepared. The assessment is to be completed only after the Inspecting Assistant Commissioner issues an appropriate direction under section 144B(4), after which the Income-tax Officer will have to complete the assessment. Similarly, under section 144A(1), the directions that may be issued by the Inspecting Assistant Commissioner is to enable the Income-tax Officer to complete the assessment. Until an assessment is completed, the proceeding for assessment will have to be treated as pending. For the reasons stated above, we cannot agree with the contention of learned counsel for the assessee and we are of the view that the provisions of section 144A can be invoked even while exercising the power under section 144B subject to the assessee being heard in the matter. Consequently, the question referred to us is answered in the negative and in favour of the Revenue.
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1991 (1) TMI 20
Exemptions, In This Behalf ... ... ... ... ..... mount in this behalf . Under clause (10C), a similar terminology is used. Several sub-clauses under section 88(2) which require issuance of a notification by the Government also refer to the specification in the notifications in this behalf . From the above, we are of the view that the approval under section 10(15)(iv)(c) by the Central Government will have to be a specific approval concerning the subject stated therein and not a general approval for any other purpose. The letter of the Government of India, Ministry of Industry and Supply, dated April 26, 1965, referred to by the Commissioner of Income tax (Appeals) expresses an approval for the importation of machinery, etc. It is not an approval with reference to section 10(15)(iv)(c) of the Act at all. Therefore, we cannot agree with the contention of learned counsel for the assessee that it is an approval in regard to that provision. Consequently, our answer to the question is in the affirmative and against the assessee.
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1991 (1) TMI 19
Exemptions, Owner, Wealth Tax ... ... ... ... ..... Officer could not have included the value of such property in the net wealth of the assessee. The Wealth-tax Officer can only include such property or asset as belongs to the assessee. If the flat in question belongs to the assessee as an asset for the purpose of assessment, in that event, the exemption under section 5(1)(iv) cannot be denied to the assessee as admissible to such an asset. The flat which has been allotted to the assessee by the promoter of the multi-storeyed building against payment and of which the assessee had the full user and possession and from which the assessee cannot be evicted by the promoter must be held to be belonging to the assessee. In our view, the principles laid down in the case of Madgul Udyog 1990 184 ITR 484 (Cal) will equally apply to the facts of this case. 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 18
Bonus Shares, Business, Shares And Securities ... ... ... ... ..... t and cannot alter the original cost to the assessee. The frame of the section does not permit such a theory to attribute the cost to the assessee in respect of the original shares to fluctuate with the value of the shares subsequently by the happening of such an event like the issuing of bonus shares or otherwise. There, this court followed the decisions in Shekhawati General Traders Ltd. v. ITO 1971 82 ITR 788 (SC) and Sutlej Cotton Mills Ltd. v. CIT 1979 119 ITR 666 (Cal) in holding that the issue of bonus shares would not decrease the cost of acquisition of the original shares for purposes of computation of capital gains on the sale of such shares. This case has no application to the facts and circumstances of the present case and, in our view, the Tribunal has come to a correct conclusion. For the reasons aforesaid, we answer the question in this reference in the affirmative and in favour of the Revenue. There will be no order as to costs. SHYAMAL KUMAR SEN J..-I agree.
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1991 (1) TMI 17
Export Market Development Allowance, Weighted Deduction ... ... ... ... ..... ip-owners as well as exporters of goods, by reason of which deals were struck and the assessee got brokerage or commission. The question was whether the assessee was entitled to weighted deduction under section 35B. The court held that it did not find anything in the section which debarred a broker or agent who supplied services or facilities as distinct from goods from getting the deduction under section 35B. The court referred to an earlier judgment dated June 13, 1978, in Income-tax Reference No. 375 of 1977 (CIT v. Indian Hotels Co. Ltd.), where it was held that the assessee whose business was merely to extend facilities and render services was entitled to the deduction under section 35B. This judgment, in our view, supports the alternative ground upon which the assessee is entitled to the deduction under section 35B. In this view of the matter, the question that is posed to us is answered in the negative and in favour of the assessee. There shall be no order as to costs.
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1991 (1) TMI 16
Perquisite, Salary ... ... ... ... ..... led to rent-free accommodation. Accordingly, it is not proper to apply section 17(2)(iv) of the Income-tax Act, 1961, instead of section 17(2)(i). The company being the employer of the assessee has been paying rent directly to the landlord as the assessee is entitled to rent-free accommodation as an employee which the company was under an obligation to provide under the terms of the agreement of the company with the assessee. Accordingly, there is no scope for the application of the provisions of section 17(2)(iv) of the Act. The assessee s computation of the perquisite value of the accommodation under section 17(2)(i) of the Act was correct and the contention of the learned advocate for the Revenue that the assessee, being a tenant of the premises occupied by him, is under an obligation to pay rent cannot be accepted. Accordingly, both the questions are answered in the affirmative and in favour of the assessee. There will be no order as to costs. AJIT K. SENGUPTA J.-I agree.
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1991 (1) TMI 15
Actual Cost, Depreciation, Developement Rebate ... ... ... ... ..... 1, the view expressed by the Tribunal that the subsidy received from SIPCOT did not go to reduce the actual cost of the plant and machinery for allowing depreciation and development rebate is right in law ? In view of the recent decision of this court in Srinivas Industries v. CIT 1991 188 ITR 22, the question referred to us is answered in the affirmative and against the Revenue. There will be no order as to costs.
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1991 (1) TMI 14
Actual Cost, Depreciation ... ... ... ... ..... Computing the actual cost of the capital assets entitled to depreciation and investment allowance ? Recently, we had occasion to consider an identical question while deciding Srinivas Industries v. CIT 1991 188 ITR 22 (Mad), and it is not in dispute that the answer rendered there would be applicable to this reference as well. In view of this, the question referred to this court is answered in the affirmative and against the Revenue. There will be no order as to costs.
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1991 (1) TMI 13
Firm, Offences And Prosecution ... ... ... ... ..... The learned judge in the above-quoted judgment observed that a perusal of the complaint shows that the allegation so far as these petitioners are concerned are vague and they are impleaded just because they are directors of the company. It is not even averred in the complaint as to the part played by the petitioners in the business. There are not even allegations regarding the part played by these petitioners in the business except that they are mere directors. None of them is managing director, and the managing director, if any, has not been impleaded as an accused. In these circumstances, the prosecution against the petitioners, who are mere directors, is not sustainable. In the instant case, there is no specific allegation as against the petitioner in the complaint itself for invoking the provisions under section 278B of the Income-tax Act. In this view, the proceedings in C.C. No. 365/87 are quashed as against the third accused/petitioner herein. The petition is allowed.
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1991 (1) TMI 12
Income From Undisclosed Sources, Penalty ... ... ... ... ..... referred in T. C. No. 72 of 1979. The Tribunal, in the course of its order deleting the penalty imposed, referred to its order in the assessment proceedings to the effect that Rs. 2,32,750 was not the income of the assessee, to hold that the very foundation for penalty had disappeared and the levy of penalty cannot be sustained. In view of the answer returned by us on questions Nos. 1 and 2 in T. C. No. 71 of 1979, it follows that the Explanation to section 271(1)(c) of the Act would apply and having regard to the difference between the income assessed or the correct income and returned income and the failure of the assessee to offer any explanation despite the issue of notice by the Inspecting Assistant Commissioner, it follows that the case of the assessee is a fit one for levy of penalty. We, therefore, answer the question referred in T. C. No. 72 of 1979 in the negative and in favour of the Revenue. The Revenue will be entitled to its costs. Counsel s fee Rs. 500 one set.
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1991 (1) TMI 11
Depreciation ... ... ... ... ..... ribunal to have referred to section 80 of the Act. Presumably for the purpose of emphasising the importance of the detemination of the claim for depreciation and a direction for its carry forward in the course of the assess ment order itself, as in the case of loss, a casual reference to section 80 had been made. We find that the reasoning of the Tribunal had proceeded entirely on the basis of the claim of the assessee for depreciation allowance and carry forward of the unabsorbed depreciation and the question of carry forward and set-off of loss as such does not appear to have figured and, under these circumstances, it was unnecessary for the Tribunal to have referred to section 80 of the Act for the purpose of arriving at the conclusion it did. We, therefore, hold that it is unnecessary to answer the third question referred to us and we return the reference on the third question unanswered. The Revenue will be entitled to the costs of this reference. Counsel s fee Rs. 500.
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1991 (1) TMI 10
Industrial Company ... ... ... ... ..... e principles, it was held that the assessee was not an industrial company . There is nothing on record to show that the facts pertaining to the activity of the assessee are different in the instant case. The statement of the case as well as the finding recorded by the first appellate authority indicate that the activity of the assessee is similar to the one referred to in I.T.R.C. No. 67 of 1982 (Hind Nippon Rural Industries Pvt. Ltd. v. CIT 1993 201 ITR 581 (Kar)). The observation of the assessing authority has given rise to some argument but that cannot be taken note of having regard to the actual finding which is the basis of the appellate orders. Under these circumstances, we find it not possible to take a view different from the view stated in I.T.R.C. No. 67 of 1982 (Hind Nippon Rural Industries Pvt. Ltd. v. CIT 1993 201 ITR 581 (Kar)). Consequently, the questions referred to us will have to be answered in the affirmative and against the assessee. We answer accordingly.
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1991 (1) TMI 9
Initial Depreciation, Investment Allowance ... ... ... ... ..... iia) nor section 32A requires that the machinery or plant has to be put into use in the year in which it is acquired for the purpose of claiming additional depreciation allowance or investment allowance. Our attention has been drawn to the decision of the Punjab and Haryana High Court in the case of CIT v. Jaideep Industries 1989 180 ITR 81, where it has been held that the assessee is entitled to the benefit of section 32A, if the machinery or plant is installed after April 1, 1976. For the reasons aforesaid, we answer the first question in this reference in the affirmative and in favour of the assessee. So far as the second question is concerned, it is now concluded by a decision of this court in the case of this assessee in I.T.R. No. 92 of 1988, where the judgment was delivered on November 21, 1990. Following the said decision, we answer the second question 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 8
Agricultural Income Tax, Deduction ... ... ... ... ..... ng authorities found it difficult to accept the claim of the assessee, for not disallowing the entire expenses. In fact, the assessing authority disallowed 50 per cent. of the car expense as for personal use which was affirmed by the Assistant Commissioner. The Tribunal took rather a lenient view and, on a mere conjecture, brought down the disallowance to 25 per cent., in favour of the assessee. We find no reason to differ from the finding aforementioned in favour of the assessee as, doing so, will mean accepting the assertion of the assessee without any evidence whatsoever. For the reasons aforesaid, the application is allowed in part. The respondents are directed to exclude replanting subsidy of Rs. 5,475 received from the Rubber Board during the assessment year from the taxable income. The order of the Tribunal in so far as disallowance of 25 per cent. of the expenses on motor car belonging to the company used by the manager of the company is, however, affirmed. No costs.
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1991 (1) TMI 7
Net Wealth, Wealth Tax ... ... ... ... ..... n owner let out the flat and has been earning rental income of Rs. 2,000 per Month. The assessee has acquired a right under the agreement of purchase to let out the flat without being the owner thereof by virtue of a registered deed of conveyance. This right is an asset and has to be valued for the purpose of assessment under the Wealth-tax Act. The assessee has a right to get the conveyance executed and registered in her favour. In such a case, the value of the asset cannot be the amount of investment made in the acquisition of the flat, but the rents, issues and profits derived from such an investment have to be taken into account for determining the value of such an asset. In our view, therefore, the Commissioner of Wealth-tax was justified in invoking the provisions of section 25(2) of the Act. 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. SHYAMAL KUMAR SEN J.-I agree.
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1991 (1) TMI 6
Company, Deduction, Other Sources ... ... ... ... ..... ure which is incurred towards salary and wages of the staff and the rent would be an expenditure incurred wholly and exclusively for the purpose of earning income assessable under the head Other sources . It does not appear from the facts which have been stated by the Tribunal that how many of its staff were engaged by the company in liquidation, and what is the quantum of salary or wages payable to them. In our view, only the actual expenditure incurred for payment of the salary of the accountant, typist and stenographers and sub-staff should be allowed as deduction. Similarly, actual rent paid for the office of the company in liquidation should also be allowed. For the reasons aforesaid, we answer the question by saving that only the actual expenditure incurred on the salary and wages of the staff mentioned in the judgment and the rent should be allowed as deduction in computing the income from other sources. There will be no order as to costs, SHYAMAL KUMAR SEN J.-I agree.
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