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1993 (1) TMI 20
Capital Gains ... ... ... ... ..... ssessee of a consideration over and above the one declared by him had been proved ? (4) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in entertaining the miscellaneous application of the assessee and holding that the provisions of section 52(1) or 52(2) of the Act had no application to the facts of the case ? Question No. 1 has been referred at the instance of the assessee whereas questions Nos. 2, 3 and 4 have been referred at the instance of the Revenue. We need not state the facts as in view of the decision of the Supreme Court in K. P. Varghese v. ITO 1981 131 ITR 597, questions Nos. 2, 3 and 4 are required to be answered in the affirmative, i.e., in favour of the assessee and against the Revenue. In view of the answers to questions Nos. 2, 3 and 4, we do not think it fit to answer question No. 1. We, therefore, decline to answer that question. Reference is disposed of accordingly with no order as to costs.
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1993 (1) TMI 19
Exclusion From Limitation, Reassessment ... ... ... ... ..... otherwise, we are unable to spell out any parity between the facts of the case dealt with by the High Court of Patna and the facts of the present case. There the parties were very much in the picture from the inception putting forth the stand with reference to status and, in that view, it was held that they were vitally interested in the firm in which they were partners and in that context Explanation 3 to section 153 would come to the rescue of the Revenue and against the assessee. Our analysis of the implications of the provisions of the Act relevant for the purpose of our case, as done above, has left us with no other alternative but to allow this special civil application. Since we have sustained the first point relating to bar of limitation and that has served the cause of the petitioner, we have not gone to the second point. Accordingly, we allow this special civil application and the impugned show-cause notice as per annexure A is quashed. We make no order as to costs.
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1993 (1) TMI 18
Business Expenditure, Depreciation, Gratuity, Remuneration, Scientific Research ... ... ... ... ..... ere a capital asset used for scientific research related to the business of the assessee is also ipso facto an asset used for the purpose of the business, it is impossible to conceive of the Legislature having envisaged a double deduction in respect of the same expenditure, one by way of depreciation under section 32 of the Income-tax Act, 1961, and the other by way of allowance under section 35(1)(iv) of a part of the capital expenditure on scientific research, even though the two heads of deduction do not completely overlap and there is some difference in the rationale of the two deductions. In the result, question No. 1 is answered in the affirmative, i.e., against the assessee and in favour of the Revenue question No. 2 is answered in the affirmative, i.e., against the assessee and in favour of the Revenue and question No. 3 is answered in the negative, i.e., against the assessee and in favour of the Revenue. Reference is disposed of accordingly with no order as to costs.
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1993 (1) TMI 17
Depreciation ... ... ... ... ..... 35 in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed under clause (ii) of sub-section (1) of section 32 for the same or any other previous year in respect of that asset. Section 32 deals with depreciation. Once 100 per cent. deduction is allowed under section 35(1)(iv) on the value of a capital asset, the actual cost for the next year is reduced to zero in terms of section 43(1) of the Act as a result of which there is no scope for allowance of depreciation in the subsequent year. In that view of the matter, the Tribunal was not justified in allowing the claim of the assessee for depreciation on scientific research and development equipment. The Tribunal had not noticed the effect of the change brought in by the Finance (No. 2) Act, 1980. Our answer to the question, therefore, is in the negative, in favour of the Revenue and against the assessee. The references are, accordingly, disposed of. No costs. D. M. PATNAIK J.-I agree.
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1993 (1) TMI 16
Cash Gifts, Estate Duty, Property Deemed To Pass ... ... ... ... ..... 10 is not fulfilled in this case. The amounts which were gifted by the donor in this case were received by the donees. They, were cash gifts. It is no doubt true that equivalent amounts were redeposited by the donees with the donor himself. But there is nothing on record to show that the same amounts, that is, the amounts which were gifted were re-deposited with the donor. The Department could have proved that the donees did not have other amounts. It could have thereafter proved that the amounts which were gifted were re-deposited with the donor. No such attempt was made in this case. As the Department failed to establish the identity of the amounts deposited by the donees with the donor, the Tribunal was right in holding that section 10 did not apply to the facts of this case. In the result, the question referred to us is answered in the affirmative, that is, against the Revenue and in favour of the assessee. Reference is disposed of accordingly with no order as to costs.
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1993 (1) TMI 15
Gift Tax, Valuation Of Shares Of Private Company ... ... ... ... ..... he market value of shares of Gaskets and Radiators Private Limited which is a running concern should have been worked out at Rs. 234 by adopting the profit-earning method. We should not be understood as having said that, on adoption of the profit-earning method, the valuation of shares at Rs. 234 is proper. That will have to be worked out after adopting the profit-earning method by the concerned authorities. In the result, questions Nos. 1, 2 and 3 in G. T. R. No. 1 of 1981 are answered in the negative, i.e., in favour of the assessee and against the Revenue. In the view that we have taken, question No. 4 does not call for an answer and, therefore, we decline to answer the same. In G. T. R. No. 2 of 1981, question No. 1 is answered in the affirmative, i.e., against the Revenue and in favour of the assessee. Questions Nos. 2 and 3 do not call for any answer and, therefore, we decline to answer the same. Both the references are disposed of accordingly with no order as to costs.
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1993 (1) TMI 14
Offences And Prosecution ... ... ... ... ..... court for vouchment and verdict at proper stage. The petitioners thus shall have freedom to urge these points in the trial court and the trial court shall then decide the same in accordance with law. It is clarified that the order passed on the aforesaid application shall not come in the way and the course hereafter shall run in a fetter free manner. Needless to say the trial court shall decide the matter hac lege without feeling in any way tied down by observations made herein for ad hoc purpose. With these observations, the petition stands finally disposed of. Consequently, the parties are directed to appear before the trial court on February 10, 1993. The case, being of 1984, is very old and, in view of this, the trial court is ordered to expedite the trial and, if necessary, to proceed in the matter day to day. The parties are expected to co-operate in profluence of the proceedings which remained under hibernation on account of the order of restraint passed in this case.
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1993 (1) TMI 13
Business Expenditure ... ... ... ... ..... ing that the case at hand is one where notices of termination were issued even while the particular contract was in progress, apart from the fact that the business as a whole was being carried on by the assessee, and not on its closure. The conclusions have been arrived at on an analysis of the fact situation and are essentially conclusions of fact. In the aforesaid premises, we are of the opinion that the Tribunal was justified in treating the retrenchment compensation as allowable expenditure under section 37 of the Act. Our answer to the question referred to above, is, therefore, in the affirmative in favour of the assessee and against the Revenue. We have not taken note of the submissions made by learned counsel for the Revenue regarding non-quantification of liability because such a question was not considered by any of the authorities and also does not arise out of the order of the Tribunal. The reference is, accordingly, disposed of. No costs. D. M. PATNAIK J.-I agree.
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1993 (1) TMI 12
Search And Seizure ... ... ... ... ..... moved by certain applicants claiming that they are the owners of the tankers and, therefore, they should be released to them. In view of the fact that the action under section 132 of the Act and the consequential proceedings have been found to be illegal, the tankers should be returned to the concerned parties from whom the Department had taken their custody. No further orders are called for on these applications and the same are disposed of as such. In view of the above discussion, Civil Writ Petitions Nos. 2734, 2736, 2743 and 2735 of 1992 are allowed with costs and a writ of mandamus is issued. The warrants issued by the respondents under section 132 of the Act are hereby quashed and the consequential proceedings pursuant thereto are also quashed being completely beyond the scope of section 132 of the Act. The respondents are directed to return the documents/goods, etc., which have been seized as a result of the raid within fifteen days. Counsel s fee Rs. 500 in each case.
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1993 (1) TMI 11
Capital Gains, Mesne Profits ... ... ... ... ..... the right to itself for getting an assignment from the assessee in respect of the final decree for mesne profits, if any, passed against Messrs. Technician Studios (P.) Ltd., for their use and occupation of the said property. In fact, after the order of acquisition was passed by the State Government, even the preliminary decree for mesne profits obtained by the assessee was rendered infructuous. In these circumstances, it cannot be held that the assessee had made any capital gains on the transfer of a capital asset. For the reason aforesaid, we answer both the questions raised by the Revenue in Income-tax Reference No. 32 of 1991 in the negative and in favour of the assessee. The first question raised by the assessee in her reference is answered in the negative and in favour of the assessee. The second question raised by the assessee in her reference is answered 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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1993 (1) TMI 10
Additional Depreciation, Appeals, Computer, Investment Allowance, Machinery, Plant, Revision ... ... ... ... ..... , 1989, clarifies that the effect of the appeal order is only that of partial merger of the matters dealt with in appeal. The remaining part survives for revision under section 263. This Explanation further clarifies that the Explanation shall have retrospective effect as it has to be deemed to have always been in existence. This later amendment makes the legislative intent manifest that the Legislature had always in mind the revisionary power to operate and apply in relation to any part of the assessment order which has not been considered and decided in the first appeal. Therefore, there is essentially no question of dissent in Hamilton and Co. s case 1991 187 ITR 568 (Cal) from the ratio in General Beopar s case 1987 167 ITR 86 (Cal). Because facts in the earlier decision were distinguishable and the state of law with regard to the powers of revision have undergone change and it is in this light that the ratio in Hamilton and Co. s case 1991 187 ITR 568 (Cal) was decided.
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1993 (1) TMI 9
Acquisition Of Capital Asset, Development Rebate Reserve, General Reserve ... ... ... ... ..... ent rebate reserve will be of no consequence. It is also not necessary that the reserve should be kept intact for eight years. The said decision is also followed by this court in Income-tax Reference No. 25 of 1979 decided on October 12, 1992. Following the decisions in Karamchand Premchand s case 1993 200 ITR 281 and Income-tax Reference No. 25 of 1979, we hold that the Income-tax Officer was not justified in withdrawing the development rebate of Rs. 6,67,351 as it cannot be said that the assessee by merely effecting the transfer of the development rebate reserve account to the general reserve account, utilised the statutory reserve for any of the prohibited purposes specified under section 34(3)(a) of the Act. For the reasons stated above, we answer questions Nos. 1 and 2 in the affirmative, that is, against the Revenue and in favour of the assessee. Question No. 3 is answered in the negative, that is, in favour of the assessee and against the Revenue. No order as to costs.
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1993 (1) TMI 8
Assessment Notice, Assessment Order, Income Tax, Natural Justice, Reassessment Notice, Writ Petition
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1993 (1) TMI 7
... ... ... ... ..... court (question No. 3). It is only if question No. 3 is decided against the assessee, we have to consider questions Nos. 1 and 2. In these circumstances, while we decline to answer the questions referred to this court for decision, we direct the Deputy Commissioner of Agricultural Income-tax and Sales tax, North Zone, Kozhikode, to restore the revision proceedings for the years 1971-72 to 1978-79 and consider the matter afresh in the light of the Bench decision of this court in Nelliampathy Tea and Produce Co. Ltd. s case 1991 190 ITR 227 and Iswara Bhat s case 1993 200 ITR 238 (Ker) 1992 KLJ (Tax Cases) 195. The Deputy Commissioner shall pass fresh orders within three months from the date of receipt of a copy of this judgment. The reference is disposed of as above. A copy of this judgment, under the seal of this court and the signature of the Registrar, shall be forwarded to the Deputy Commissioner of Agricultural Income-tax and Sales tax, North Zone, Kozhikode, forthwith.
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1993 (1) TMI 6
Computation Of Capital, Electricity Charges, House Rent Allowance, Income Tax Act, Income Tax Rules, New Industrial Undertaking, Special Deduction
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1993 (1) TMI 5
Additional Tax, Income Tax Act, Rectification Of Mistakes, Total Income ... ... ... ... ..... ions referred to us as follows Question No. 1 is answered in the affirmative and in favour of the Revenue. Question No. 2 is answered in the affirmative and in favour of the Revenue. Question No. 3 is somewhat misleading because it assumes that additional tax was payable in respect of the dividends declared and paid out of the profits exempted under section 80J of the Income-tax Act, 1961. For the reasons which we have set out earlier, the additional income-tax is payable to the extent laid down in item I(B) of Paragraph F of Part I of the First Schedule to the Finance Act, 1968, on a portion of the total income of the assessee. For the reasons which we have set out above, the Tribunal was correct in holding that the additional income-tax was payable on a portion of the total income determined with reference to excess dividends declared and paid out of profits exempted under section 80J of the Income-tax Act, 1961. The questions are answered accordingly. No order as to costs.
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1993 (1) TMI 4
Accounting Year, Accrual Of Income, High Court, Income Tax Act ... ... ... ... ..... civil court judgment and the High Court judgment are not before us. We are, therefore, guided by the facts as disclosed in the order of reference and the order of the Appellate Tribunal. These records show that the claim of the assessee was disputed by the Army Purchase Organisation and the dispute was ultimately settled by the High Court several years later. In the light of these facts, the view taken by the Tribunal that it cannot be said that the assessee had acquired the right to receive the amount even when the supplementary bill was submitted and the mere filing of a claim cannot give rise to a right to receive the amount, appears to be correct. We, therefore, answer the question in the affirmative, that is, in favour of the assessee and against the Revenue. There shall be no direction as to costs. A copy of this judgment under the signature of the Registrar and the seal of the High Court will be transmitted to the Income-tax Appellate Tribunal, Gauhati Bench, Gauhati.
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1993 (1) TMI 3
Waiver Of Interest ... ... ... ... ..... e think that the three conditions mentioned above are to be satisfied for the operation of section 220(2A) of the Act. The Commissioner has found that one of the necessary conditions for exercising the power under section 220(2A) that the payment of interest has caused or would cause genuine hardship to the assessee is not existent in the case of the petitioner. The Commissioner has found that the assessee is earning very good income from its business. So long as all the conditions have to be satisfied and the Commissioner has found that the first condition is not satisfied on the basis of certain facts, there is no scope for this court to interfere with such a discretionary order, exercising the power under article 226 of the Constitution. The learned single judge has rightly found that the petitioner is not entitled to any relief under article 226 of the Constitution and dismissed the original petition. We see no merit in the appeal and it is only to be dismissed. We do so.
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1993 (1) TMI 2
Any Remuneration, Other Sources, Remuneration Received By Managing Director ... ... ... ... ..... s of association. Unless the Revenue makes out a case that the Tribunal s reading of the respective clauses was not correct, the Tribunal s finding shall prevail. It may be mentioned that the Supreme Court in the decision cited by us was already aware of the possibility of the misconception stemming from the width of the powers held by the managing director. It is not the extent of the power which is the test. It is the ultimate accountability of the managing director to the company which determines the character of relation between the managing director and the company. The emphasis laid on behalf of the Revenue on the extensiveness of the powers is misplaced. Accordingly, we hold that the Tribunal s finding that the remuneration received by the assessee as the managing director is income assessable under the head Salary is right. We, therefore, answer the question in the affirmative and against the Revenue. There will be no order as to costs. SHYAMAL KUMAR SEN J.--I agree.
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1993 (1) TMI 1
Industrial Undertaking, Investment Allowance, Supreme Court ... ... ... ... ..... e undergone a process within the meaning of section 2(7)(c) of the Finance Act, 1973. The three-judge Bench decision must be taken to have overruled the view of the Allahabad High Court in Addl. CIT v. Farukhabad Cold Storage 1977 107 ITR 816 and that of the Calcutta High Court in CIT v. Radha Nagar Cold Storage (P.) Ltd. 1980 126 ITR 66. The appeal has, therefore, to be dismissed and the opinion of the Delhi High Court has to be affirmed. In view of the aforesaid decision of the Supreme Court, a cold storage cannot come within the meaning of industrial undertaking . We are, therefore, of the opinion that the Income-tax Officer was right in rectifying the assessment and holding that the cold storage is not an industrial undertaking and as such, is not entitled to the benefit of either section 32A or section 80HH. We, therefore, 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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