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1991 (3) TMI 19
Limitation, Power Under Chap. XX-C ... ... ... ... ..... e month in which the statement was received in accordance with the proviso to sub-section (1), the jurisdiction of the appropriate authority to direct purchase of the property by the Central Government stands extinguished and the petitioners are entitled to secure the no objection certificate as contemplated by subsection (3) of section 269UL of the Act. The submission is correct and deserves acceptance. We hope and trust that hereafter the appropriate authority will exercise jurisdiction As conferred by the Act and shall not enter into enquiry which is de hors or extraneous to the provisions of the Act. In our judgment, the petitioners are entitle d to the relief sought. Accordingly, the rule is made absolute in terms of prayers (a) and (d). The appropriate authority shall issue a no objection certificate to transfer the property in favour of respondent No. 4. within a period of four weeks from the date of service of writ on the authority. There will be no order as to costs.
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1991 (3) TMI 18
Advance Tax ... ... ... ... ..... 214 of the Income-tax Act, 1961, or any other relevant law from April 1, 1970, until the date of the correct fresh assessment order to be passed as per my order herein on the total sum of Rs. 56,54,927. The Income-tax Officer shall, after setting down the said interest in place of the cancelled figure of Rs. 5,80,705, compute the total refundable amount and substitute the same in place of the figure of Rs. 38,68,312. This exercise of correction shall be completed within a period of six weeks from date. It is expected that the payment will follow expeditiously. Mr. Maitra has prayed for a stay of operation of this order in view of certain differences in judicial opinion (on the point involved) in this country. Since I have permitted a period of six weeks for the putting into operation of this order, I think there is already an inbuilt stay, and no other further stay is required. Therefore, the prayer for stay is rejected. The application succeeds to the extent indicated above.
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1991 (3) TMI 17
Charge, Wealth Tax ... ... ... ... ..... l Board of Direct Taxes in exercise of its rule-making power. It clearly manifests the legislative intent. It gives an indication of the legislative recognition of the principles embodied in the erstwhile rule 1D. It is, in essence, declaratory of the validity of rule 1D. Parliament must be presumed to be aware of the conflicting decisions of the High Courts, but even then, by incorporating rule 1D in the Schedule to the Act, it has given recognition to the views of the High Courts that rule 1D is mandatory in its application to the valuation of unquoted shares of non-investment companies. Subsequent legislation may be looked at in order to see what is the proper interpretation to be put upon earlier rules where the earlier rules are capable of more than one interpretation. For the reasons aforesaid, we answer the question for the assessment years 1981-82 to 1983-84 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 16
Business Expenditure, Ex Gratia Payment To Workers ... ... ... ... ..... racter of additional wages or emoluments and these are in fact ex gratia and not bonus as it is understood. In this connection, we may refer to the decision of a Division Bench of this court in I. T. Reference No. 35 of 1983 (CIT v. Shaw Wallace and Co. Ltd. 1991 190 ITR 455), where the judgment was delivered on August 22, 1989. There the Division Bench of this court held that, if the payment is made in excess of 8.33 per cent. such payment will be allowed as deduction under section 37 of the Act. In that case also, ex gratia payment was made to the employees for maintaining industrial peace and the facts are also similar. We are, therefore, of the view that, on the facts and in the circumstances of the case and on an interpretation of the agreement in question, the Tribunal came to a correct conclusion. We, therefore, answer all 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 15
Estate Duty ... ... ... ... ..... lso add that it is true that the accountable person did not prefer any appeal against the rectification order dated December 28, 1972, as the appeal against the rectification order passed on July 18, 1972, was already before the Tribunal and the accountable person was not aggrieved inasmuch as the value was reduced from Rs. 165.27 to Rs. 162.27. The Tribunal has also, on the application of the accountable person, recorded that it was in fact an appeal which was decided by them against the order dated July 18, 1972, read with the order dated December 28, 1972, in other words, against the operative order dated December 28, 1972, which was considered by the Tribunal. For the foregoing reasons, we are of the view that the Tribunal was right in holding that there was no mistake borne out from the record. Accordingly, the question in this reference is answered in the negative and in favour of the accountable person. There will be no order as to costs. SHYAMAL KUMAR SEN J. -I agree.
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1991 (3) TMI 14
Firm, Gift, Gift Tax ... ... ... ... ..... sort is made to determine the value by capitalising the rent which the property would fetch if let out or is fetching if already let out. Resort is also made to an estimate by an expert on the basis of value of the land and building. It is usual to value the properties by more than one method so as to cross-check and adopt an average. This is resorted to when there is great disparity between the valuation arrived at by different methods. These observations cannot be ignored on the ground that the observations were not necessary for the purpose of the said case. The principle involved had to be stated though, having regard to the facts of the said case, there was no occasion to apply the particular observation. Even otherwise, we are of the view that the view expressed by this court is quite reasonable and we do not find any reason to depart from the earlier view. For the reasons stated above, the question referred to us is answered in the affirmative and against the Revenue.
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1991 (3) TMI 13
Appeal To AAC, Penalty, Wealth Tax ... ... ... ... ..... r imposable upon him for such default. The assessee admits his default but asks for reduction or waiver of penalty. Therefore, the quantum of penalty is the only question pertinent. No further question as to whether the assessee made any default, nor whether there was any reasonable cause for delay in filing the return or not, in other words, no further question as to whether penalty was imposable or not under section 18(1)(a) would arise. The Commissioner as well as the Wealth-tax Officer would only be concerned with the quantum of penalty. Whether the Commissioner should have waived the penalty if all the conditions of section 18B were satisfied is a different question altogether. We are of the view that no appeal lies against any order passed, pursuant to the order made tinder section 18B of the Act. For the foregoing reasons, we answer the reframed question 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 (3) TMI 12
Deduction, Wealth Tax ... ... ... ... ..... Division Bench decisions in CIT v. M. N. Rajam 1982 133 ITR 75 (Mad) and CWT v. Ch. Satish 1982 133 ITR 834 (Mad). We are in respectful agreement with the view taken by the Full Bench of the Madras High Court in Vaidyanathan s case 1985 153 ITR 11. In the instant case, the finding of the Tribunal is . . . . the assessee has other assets too which were liable to exemption and the total claim was limited to Rs. 1,50,000 only and, as is shown above, either no exemption has been granted to the assessee in respect of the asset in question or it has been granted on a small portion thereof only. Our answer to the question referred, therefore, is that, on the facts and in the circumstances of the case and in terms of section 2(m)(ii) of the Wealth-tax Act, the debt in question must be disallowed only in proportion to the exempted value of the asset or the property securing the debt, i.e., the fixed deposit receipt. Reference answered accordingly. There shall be no order as to costs.
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1991 (3) TMI 11
... ... ... ... ..... inimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose the penalty when there is a technical breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out. In our opinion, the said judgment and decision in the aforesaid case will have no application to the facts of the instant case. Under such circumstances, there is no merit in the contention of the assessee. Question No. 1 as reframed is answered in the negative and in favour of the Revenue. Question No. 2 is answered in the affirmative and in favour of the Revenue. There will be no order as to costs. AJIT K. SENGUPTA J. -I agree.
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1991 (3) TMI 10
Agricultural Income Tax, Deduction, Messing Expenditure For Employees ... ... ... ... ..... tural income of the petitioner-assessee as found by the Tribunal, in our opinion, the advertisement charges, as claimed by the assessee in the instant case, on the basis of the materials on record, cannot be said to be expenditure incurred wholly and exclusively for the purpose of the land either. The analogy drawn from the Income-tax Act in respect of permissible deduction is wholly irrelevant for the purpose of considering the permissible deduction under section 5(e) of the Tamil Nadu Agricultural Income-tax Act, 1955. The order of the Tribunal disallowing the advertisement charges amounting to Rs. 9,292, therefore, does not call for any interference at our hands. In view of the aforesaid discussion, this tax revision case partly succeeds and is allowed to the extent of disallowance by the Tribunal of the mess expenses, and fails with regard to the grievance projected on the disallowance of the advertisement charges. There will be no order as to costs in this revision case.
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1991 (3) TMI 9
Business Expenditure, Company, Disallowance, Investment Allowance ... ... ... ... ..... ct that the Department is treating the petitioner-company as the manufacturer and making it liable for excise duty precludes it from taking the plea that the petitioner is a dummy company or a benamidar for the customer companies. It may be borne in mind that the customer companies are not shareholders of the petitioner company, they are alleged to be subsidiaries of the shareholder companies. In our view, under sections 3 and 4 of the Central Excises and Salt Act, 1944, and rule 9 of the Rules framed thereunder, the liability to pay excise duty rests only on the manufacturer or the producer of the goods and not on the purchaser. On the facts and in the circumstances of this case, the liability claimed by the assessee is a contingent liability which cannot be allowed as a deduction For the reasons aforesaid, we answer the fourth question in this reference in the affirmative 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 8
Income, Interest ... ... ... ... ..... on could not be decided by us. In the case of State Bank of Travancore 1986 158 ITR 102, the Supreme Court clearly pointed out that these circulars in question were executive in character and were in the nature of concessions and, as such, the same could not alter the provisions of the law. The principle of contemporaneous exposition could not be applicable on the basis of the circulars which were issued for the purpose of giving certain concessions. The Supreme Court, after considering the scope and effect of the said circulars, had laid down the law on the question of taxability of interest on sticky loans and advances by the bank and, as such, it is not open to us to take a contrary view. We are not inclined to accept the submissions made by learned counsel on behalf of the assessee. For the foregoing reasons, we answer the first and second questions in the affirmative 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 7
Firm, Gift, Gift Tax ... ... ... ... ..... ompany agreed to pay Rs. 10 lakhs to OSCL in full and complete settlement of all the claims which OSCL had under the decree of this court or in anywise OSCL to meet its cost of litigation expenses. There cannot be any doubt that this amount mentioned in the terms of settlement was agreed to be paid in consideration of the fact that OSCL would forgo all its right, title and interest which had accrued in its favour in the said property or assets in terms of the decree of the court. Under such circumstances, the amount of Rs. 10 lakhs and the expenses of Rs. 1,05,019 incurred in respect of the said litigation was capital expenditure and not a revenue expenditure towards the cost of litigation which were meant for the protection or preservation of its assets and as such should be treated as capital expenditure. Accordingly, both the questions Nos. 1 and 2 are answered in the affirmative and in favour of the Revenue. There will be no order as to costs. AJIT K. SENGUPTA J.-I agree.
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1991 (3) TMI 6
Debt Due, Deduction, Exemptions, Wealth Tax ... ... ... ... ..... has been taken away by the Explanation which has been added to section 5(1A) with effect from April 1, 1989. This Explanation provides that, where a debt is secured on, or has been incurred in relation to, any asset referred to in this sub-section, the exemption under this sub-section shall be allowed first against the value of the asset on which or in relation to which such debt is secured or incurred and, thereafter, against the value of any other asset so referred to. In other words, the option which was available to the assessee has now been taken away. But, in this case, the assessment year involved is 1979-80. In our view, therefore, the Tribunal came to the correct conclusion on the facts and was right in allowing deduction of the debt in full without deduction of the allowance available under section 5(1A) of the Act. We, therefore, answer the 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 (3) TMI 5
Annuity, Deduction, Exemptions, Legal Terms, Wealth Tax ... ... ... ... ..... ask the payer to pay him the value of the annuity in a lump sum. The commutation of the value of the annuity must necessarily imply that, in lieu of the right to receive an annuity, the annuitant claims lump sum payable to him and he gives up his right to receive the annuity. Commutation is, therefore, a bilateral transaction in which the grantee of the annuity gives up his right to receive a sum annually in return for a lump sum and the grantor gets rid of his recurring liability to pay an annuity annually. This question does not arise in the case of compulsory deposits. Whatever is deposited is refunded with interest. The Income-tax Officer can, on the ground of hardship, refund the entire amount of deposit with accrued interest thereon. There is no question of any discounting of the value of the annuity. For the reasons aforesaid, we answer the second question 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 (3) TMI 4
Depreciation, Developement Rebate ... ... ... ... ..... actual cost of the capital asset. Thus in the instant case also the extra expenditure incurred by the assessee would be towards the cost of plant and machinery and accordingly it will be on capital account. In either view of the matter, the contention of Mr.Bajoria must fail. There, the first question was answered by saying that the additional expenditure incurred by reason of exchange fluctuation was capital expenditure. In our view, the assessee is also entitled to depreciation, on the increased value of the plant and machinery. We, therefore, answer the first question in the affirmative and in favour of the assessee. The second question is now concluded by the decision of this court in the case of this assessee in Income-tax Reference No. 233 of 1984, where judgment was delivered on December 19, 1989. 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 (3) TMI 3
Assessment Year, Capital Gains Tax, Net Wealth, Wealth Tax Act ... ... ... ... ..... next two years also with such adjustments as may be considered necessary on account of changes in the price of gold, etc. . Even then it was clarified that adjustments will be permissible where there has been a substantial alteration in .... having the effect of increasing or decreasing the value of the asset to a significant extent. Except raising the contention that the said circular will govern the valuation for all the years subsequent to the assessment year 1968-69, no argument was advanced on the merits. Having regard to the facts and circumstances of the case and having regard to the intent and purport of the said circular, we are of the view that the Tribunal was justified in holding that the circular cannot affect the valuation for any assessment year other than assessment years 1968 69 to 1970-71. For the reasons aforesaid, we answer the third question 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 (3) TMI 2
Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the expenditure on the air travel of the assessee's wife was not incurred wholly and exclusively for the purpose of the business of the assessee and that the benefit derived by the wife would detract from the exclusiveness of the outlay so as to render it ineligible as a deductible expenditure
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1991 (3) TMI 1
Depreciation - Scientific Research - Whether the Tribunal was right in law in holding that the assessee, a registered firm, is entitled to carry forward unabsorbed depreciation from earlier years and that it will be deemed to be an allowance in the nature of depreciation in the previous year relevant to the assessment year 1968-69 - Whether the claim of the assessee to carry forward and set off loss against its total income for the assessment year 1968-69 has been rightly rejected
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