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1991 (3) TMI 39 - MADHYA PRADESH HIGH COURT
Firm, Reassessment ... ... ... ... ..... o be without jurisdiction. In the present case also, the notice under section 148 of the Act does not disclose any reasons on the basis of which it was believed by the Income-tax Officers that income had escaped assessment. Reasons were not supplied to the petitioner despite a specific request being made, vide annexure to the petition. Moreover, the provisions of section 186 of the Act were also not followed before issuing notice to the alleged association of persons said to be including the petitioner/respondents Nos. 4 and 5 and others. We, therefore, have no option but to quash the notice dated March 15, 1990 (annexure C to the petition), issued by the Assistant Commissioner of Income-tax (Investigation Circle-II (Indore)). We, therefore, quash the aforesaid notice (annexure C to the petition) and all the proceedings instituted upon that notice. This petition is allowed with no order as to costs. The security deposit shall be refunded to the petitioner after verification.
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1991 (3) TMI 38 - ALLAHABAD HIGH COURT
Income, Perquisite ... ... ... ... ..... ai Road, Bombay, with an area of 3, 227 sq. ft. The Income-tax Officer valued the said perquisite under rule 3(1)(ii) at Rs. 17,574 and added the same to the income of the assessee. This addition was questioned by the assessee, unsuccessfully before both the Appellate Assistant Commissioner and the Tribunal. We are unable to see any question of law arising from the order of the Tribunal. It is not suggested that, while valuing the perquisite, any statute, rule or other provision was not followed. We do not also find that the valuation is, in any manner, unreasonable. Accordingly, the question referred, being essentially a question of fact, is answered in the affirmative, i.e., in favour of the Revenue and against the assessee. No costs.
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1991 (3) TMI 37 - CALCUTTA HIGH COURT
Depreciation ... ... ... ... ..... loyees, labourers, etc., the same would be assessable as business income. Since no provision of a statute can even be held to be otiose, the interpretation of section 32(1A) as suggested on behalf of the assessee may be accepted since this is the only reasonable interpretation of the said section. If an owner of a building gets the benefit of allowance if such building is used for the business, there is no reason why the lessee will be disentitled from such benefit. The benefit cannot be restricted only to the building wherefrom the business is carried on. The same benefit as is available to the owner under section 32(1) should avail to the occupant under a lease. That must be construed as the legislative intent, as it saves the provision from the anomalies arising from the Revenue s contention. Accordingly, we answer the question in the affirmative and in favour of the assessee and against the Revenue. There will be no order as to costs. BHAGABATI PRASAD BANERJEE J.-I agree.
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1991 (3) TMI 36 - KARNATAKA HIGH COURT
Articles, Investment Allowance ... ... ... ... ..... (b) in the second proviso make it clear that exclusion from the provision is only in respect of the machinery or plant or appliances connected with the administrative part of the business, i.e., those used in the office premises or residential accommodation of the assessee. Naturally, road transport vehicles referred to herein will have to be such vehicles which are made to carry the employees to the office and back home. The words road transport vehicles include vehicles like omnibuses, cars, etc., and, not dumpers and tippers which are directly used in the activity of the business at the place where the business is actually carried on. The dumpers and tippers are essentially machinery to carry on construction work. In view of the above, we are of the view that the assessee is entitled to investment allowance in respect of dumpers and tippers. The question referred to us will have to be answered in the affirmative and against the Revenue. References are answered accordingly.
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1991 (3) TMI 35 - CALCUTTA HIGH COURT
Business Loss ... ... ... ... ..... a sum of Rs. 26,56,561, the unrealised amount of Rs. 21,96,390 was written off by the assessee-company as a bad debt and/or a trading loss. When the debt was written off, the directors report for the year ending March 31, 1957, also may be looked into. We may add in this connection that the case of the assessee came up for hearing before this court-see CIT v. Gillanders Arbuthnot and Co. Ltd. 1982 138 ITR 763. There, a Division Bench of this court held that the assessee was engaged in the business of financing its subsidiaries or that, at any rate, financing the subsidiaries was incidental to the assessee s main business activities which were diverse in nature. For the foregoing reasons, it must be held that the loss incurred by the assessee in financing its subsidiary must be allowed as a business loss. We, therefore, answer both the questions 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 (3) TMI 34 - ALLAHABAD HIGH COURT
Exemptions, Income Tax ... ... ... ... ..... ous receipts, they are more or less in the nature of rent received from warehousing. Once this is so, it is evident that though called miscellaneous receipts, they are in truth income derived from letting warehousing for storage, processing and facilitating the marketing of commodities. So far as the commission received by the assessee is concerned, it is dealt with in para 4 of the Tribunal s order. The Tribunal held that commission was received both for procuring and storing wheat and other food articles on behalf of the Food Corporation of India. It appears from the order of the Tribunal that it is one single indivisible activity. The dominant activity is storage. If so, this income also falls within and satisfies the second limb of clause (29). Here too, the name given, viz., Commission on procurement of wheat -is really a misnomer. For the above reasons, both the questions are answered in the affirmative, i.e., in favour of the assessee and against the Revenue. No costs.
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1991 (3) TMI 33 - CALCUTTA HIGH COURT
Assessment, Estate Duty, Limitation ... ... ... ... ..... he Controller is required to do is in a regular manner, upon receipt of such account or copy of the application. Therefore, in such cases there cannot be any commencement or initiation of proceedings for the levy of duty. (emphasis supplied). In our view, whether or not the accountable person makes an application for the grant of representation at the time when the proceedings were pending on the basis of the return filed by the accountable person, the principles laid down by the aforesaid decision will equally apply to the facts of this case inasmuch as the initiation or commencement of the proceedings for the levy of estate duty was not at the instance of the Controller. It was only in consequence of the proceedings commenced on the basis of the return filed voluntarily by the accountable person. For the reasons aforesaid, 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 (3) TMI 32 - ALLAHABAD HIGH COURT
Reassessment, Writ ... ... ... ... ..... does not sit in judgment over the adequacy or sufficiency of reasons recorded. This is a matter to be gone into in reassessment proceedings. This court will interfere only in cases where no reasons are recorded or where the reasons recorded are ex facie irrelevant. Applying the above principles to the case in hand, it must be held that, in cases where the assessees have filed their returns or revised returns, as the case may be, in response to the notice under section 148(1) and have also raised a contention that the very initiation of the reassessment proceedings is not in accordance with law, the Assessing Officer shall communicate the reasons recorded by him under section 148(2) to the assessee, subject, of course, to the necessity of protecting his sources/informants if he thinks such protection is necessary in any given case. Suffice it to say that he shall proceed in accordance with the principles enunciated above. The writ petitions are disposed of in the above terms.
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1991 (3) TMI 31 - CALCUTTA HIGH COURT
... ... ... ... ..... and accepts the rent received from such property cannot contend that the corporation may levy tax by revising the assessment on the basis of the rent disclosed. In the case of a tenanted property, one has to take the actual rent received or receivable or the annual value determined by the local authority, whichever is higher. The assessment under the Municipal Act is not made on the basis of the actual rent. The annual value may be lower or higher than the rent received or receivable. The gross rent received, therefore, may not have any bearing on the levy of municipal taxes. In our view, therefore, when the rental method is adopted in valuing the property and the rent receivable is taken into account, the municipal taxes levied can only be deducted in arriving at the market value of the property. For the reasons aforesaid, the question in this reference is answered 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 (3) TMI 30 - KARNATAKA HIGH COURT
Business Expenditure, Fines And Penalties ... ... ... ... ..... atory in nature and not a penalty and consequently deduction was permitted. We do not find any difference in principle between the said decision of the Supreme Court and the facts of the instant case. The decision of this court in CIT v. Mandya National Paper Mills Ltd. 1984 150 ITR 26, again highlights these principles. Under section 13(2) of the Karnataka Sales Tax Act, for delayed payment of sales tax, penalty is levied. This penalty under section 13(2) of the Sales tax Act was held to be interest payable for delayed payment and, consequently, this court held that the same was deductible under section 37 of the Income-tax Act, 1961. We are of the view that this is a stronger case in favour of the assessee, applying the principle stated by the Supreme Court in Mahalakshmi Sugar Mills Co. s case 1980 123 ITR 429. Consequently, we are of the view that the questions referred to us are to be answered in the affirmative and against the Revenue. Reference is answered accordingly.
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1991 (3) TMI 29 - CALCUTTA HIGH COURT
Income, Initial Depreciation ... ... ... ... ..... ovided for was not in fact necessary and it was an excess provision. No longer was there any liability. Another fact is also relevant. It has been held that smallness of the amount involved in individual cases would furnish a reasonable basis for holding that such creditors were not interested in realising such small amounts or dues and in fact a smaller amount than due was accepted by them in full discharge of the whole amount. In this case also, as we have indicated, from 1971-72 onwards, small amounts had accumulated and, in the three assessment years, the assessee wrote back the liabilities after a lapse of 6 or 7 years. For the foregoing reasons, all the three questions relating to the liabilities written back for the assessment years 1976-77, 1977-78 and 1978-79 in Income-tax Reference No. 73 of 1985 and Income-tax Reference No. 38 of 1987 are answered 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 (3) TMI 28 - CALCUTTA HIGH COURT
Bonus Shares, Burden Of Proof, Business, Business Expenditure, Company, Donation For Charitable Purposes, Expenditure On Transit House, Export Incentive Scheme, Foreign Exchange, Foreign Loan Liability, Income, Special Deduction
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1991 (3) TMI 27 - MADRAS HIGH COURT
Agricultural Income Tax, Inclusions In Total Income, Total Income ... ... ... ... ..... and the appellate authority did not return any finding on facts to the effect that some agricultural income of the wife was derived from the membership of the wife in firm of which her husband is a partner, it was not permissible to invoke section 9(2)(a)(i) of the Act with a view to compute the total agricultural income of the assessee. In the absence of any factual data to invoke the provisions of section 9(2)(a)(i) of the Act, the view taken by the Tribunal in favour of the assessee cannot be said to be so unreasonable as to require any interference at our hands. It is axiomatic that, when two views are possible on a given state of affairs, the one in favour of the assessee has to be preferred. The Tribunal, therefore, was right in setting aside the orders of the appellate authority as well as the assessing authority and, for the reasons that we have noticed above, we sustain the order of the Tribunal. Consequently, the tax revision case fails and is dismissed. No costs.
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1991 (3) TMI 26 - KARNATAKA HIGH COURT
Bonus, Business Expenditure ... ... ... ... ..... erring to the provisions of section 31A of the Payment of Bonus Act, 1965. Further, it is necessary to mention the two decisions of the Kerala High Court which support the contentions advanced by Sri Sarangan in support of the claim made by the assessee they are reported in CIT v. P. Alikunju, M. A. Nazir, Cashew Industries 1987 166 ITR 611 (Ker) and CIT. v. P. Balakrishna Pillai, International Cashew Traders 1990 182 ITR 449 (Ker). A few more decisions were cited which it is not necessary for us to refer to at present. Since the Appellate Tribunal has not examined the appeal before it by referring to the appropriate provision of law, we direct the Appellate Tribunal to rehear the appeal by permitting the assessee and the Revenue to raise all contentions. The matter is remitted to the Appellate Tribunal as was done by the Kerala High Court in the case reported in CIT v. P. Balakrishna Pillai, International Cashew Traders 1990 182 ITR 449. Reference is disposed of accordingly.
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1991 (3) TMI 25 - BOMBAY HIGH COURT
Developement Rebate, Firm ... ... ... ... ..... erve amongst the partners on the dissolution of the firm did not amount to the utilisation thereof for a purpose which was not the purpose of the business of the undertaking within the meaning of section 155(5)(ii)(c) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal ought to have deemed the development rebate allowed as wrongly allowed and direct the computation of the total income of the assessee for the relevant previous year with the necessary amendment as contemplated under section 155(5) of the Income-tax Act, 1961 ? Counsel are agreed that, in view of the Supreme Court judgment in the case of Malabar Fisheries Co. v. CIT 1979 120 ITR 49, the first question is to be answered in the affirmative and in favour of the assessee. Counsel are also agreed that the second question is consequential and requires to be answered in the negative and in favour of the assessee. The questions are so answered. No order as to costs.
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1991 (3) TMI 24 - BOMBAY HIGH COURT
Business Expenditure, Disallowance, Perquisite ... ... ... ... ..... f the assessee for the accounting period relevant to the assessment year 1973-74 under section 40A(5) of the Income-tax Act, 1961 ? Counsel are agreed that a similar question came up for consideration before this court in the assessee s own case in Income-tax Reference No. 230 of 1976 and Income-tax Reference No. 245 of 1976 and that our court answered the question in the affirmative and in favour of the assessee, vide judgment dated December 9, 1988. Following that judgment, the question herein is, accordingly, answered in the negative and in favour of the assessee. No order as to costs.
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1991 (3) TMI 23 - BOMBAY HIGH COURT
Company, Reserves, Surtax ... ... ... ... ..... s of the case, the Appellate Tribunal was right in directing the Surtax Officer to include in the computation of capital for the three years the entire balance in the general reserve account as standing on the first day of the accounting year without reducing therefrom the dividend declared in the relevant previous year? Counsel are agreed that in view of our court s judgment in CIT v. Hindustan Lever Ltd. 1986 160 ITR 700 and CIT v. Pfizer Ltd. 1989 177 ITR 140, the first question requires to be answered in the affirmative and in favour of the assessee. It may be mentioned that the decisions were delivered by our court following the Supreme Court decision in Vazir Sultan Tobacco Co. Ltd. v. CIT 1981 132 ITR 559. Counsel are also agreed that in view of the Supreme Court decision in Vazir Sultan Tobacco Co. Ltd. v. CIT 1981 132 ITR 559, the second question requires to be answered in the negative and in favour of the Revenue. The questions are so answered. No order as to costs.
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1991 (3) TMI 22 - KARNATAKA HIGH COURT
Burden Of Proof, Business Expenditure, Commission ... ... ... ... ..... evenue to establish that no services were rendered and the payment of commission was unauthorised or not warranted by any business considerations. We have, no doubt, in our mind that the commission in the instant case should have been paid and accordingly the board resolved to make the payment in September, 1978. Mr. Chanderkumar, learned counsel for the Revenue, however, contended that the question is essentially one of fact and does not call for any consideration by this court. This contention cannot be accepted since the finding of the Appellate Tribunal as well as that of the Commissioner of Income-tax is based on an erroneous approach. The findings recorded by the Tribunal is the result of a misdirection and ignoring the basic idea involved in the payment of the commission. The burden was wrongly cast on the assessee in the instant case. In the circumstances, we answer the question referred to us in the negative and against the Revenue. Reference is answered accordingly.
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1991 (3) TMI 21 - DELHI HIGH COURT
Business Expenditure ... ... ... ... ..... ax Department. The Tribunal then observed that the question proposed by the Revenue was misconceived and no question of law arose. The petitioner has not alleged in the petition under section 256(2) that the Tribunal was wrong in observing that the contention giving rise to the question was, in fact, raised but not dealt with by the Tribunal. If a contention is raised but not dealt with, then a question of law can arise, but if a contention is neither raised nor dealt with, then a question of law cannot arise. The Tribunal having held that the contention had neither been raised nor dealt with by it, it was incumbent upon the petitioner to satisfy this court that a contention had been raised. In the absence of such an averment, it has to be accepted that the petitioner did not raise the contention before the Tribunal and, therefore, the Tribunal was right in coming to the conclusion that the question of law did not arise from its order. This petition is accordingly dismissed.
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1991 (3) TMI 20 - KARNATAKA HIGH COURT
Deduction For New Industrial Undertaking, Export Market Development Allowance, New Industrial Undertaking, Weighted Deduction
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