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1993 (3) TMI 44 - BOMBAY HIGH COURT
Appeal To AAC, Loss, Revision, Special Deduction ... ... ... ... ..... eous so far as the question of set off of loss and carrying forward the same respectively is concerned. If the Commissioner had finally held that there was no loss for the year 1971-72, he would have dropped the proceedings for the year 1972-73 also. But, having come to a finding that the order for the assessment year 1971-72 was erroneous, he was definitely justified in coming to the conclusion that the order for the assessment year 1972-73 was also erroneous and prejudicial to the interests of the Revenue because loss had been carried forward which, in fact, was not there in the assessment year 1971-72. That being so, we are of the opinion that the Tribunal was right in upholding the action of the Commissioner of Income-tax in revising the order for the assessment year 1972-73 also. The fourth question, accordingly, is answered in the negative, i.e., against the assessee and in favour of the Revenue. In the facts and circumstances of the case, we make no order as to costs.
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1993 (3) TMI 43 - BOMBAY HIGH COURT
Capital Gains, Exemptions, Reference ... ... ... ... ..... pose of his residence. It was also submitted by Dr. Balasubramanium that the land appurtenant to the bungalow which has been sold by the assessees should not be treated as land appurtenant to, the bungalow and he cited in support a decision of the Madras High Court in the case of S. Radhakrishna v. CIT 1984 145 ITR 170 and another decision of the Andhra Pradesh High Court in the case of CIT v. Zaibunnisa Begum 1985 151 ITR 320. This point has not been raised before any of the Departmental authorities by the Revenue and it has never been the case of the Revenue that the land which was sold was not the land appurtenant to the bungalow. We also have no factual data before us in this connection since this aspect has not been urged at any time by the Department. We, therefore, cannot go into this question. In the premises, the question which is referred to us is answered in, the affirmative and in favour of the assessees. The question is answered accordingly. No order as to costs.
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1993 (3) TMI 42 - GUJARAT HIGH COURT
... ... ... ... ..... tions which were made with respect to cash on hand are indicative of the fact that this was not a case of mistake but that it was a case of deliberate concealment. If this discrepancy in the account is considered along with the fact that there was a raid by the Income-tax Department at the business as well as residential premises of the father of the assessee and the assessee himself was given notice under section 143(2), it cannot be said that the view taken by the Tribunal is unreasonable or that it was not justified in confirming the penalty levied upon the assessee. The assessee having failed to discharge the burden arising as a result of the Explanation to section 271(1)(c), the authorities were right in levying penalty upon the assessee and the Tribunal was equally justified in confirming the same. We, therefore, answer the question in the affirmative, that is, against the assessee and in favour of the Revenue. Reference is disposed of accordingly. No order as to costs.
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1993 (3) TMI 41 - DELHI HIGH COURT
Benefit Or Perquisite Arising From Business, Business Income, Firm, Partners ... ... ... ... ..... true interpretation of section 40(a)(v) of the Income-tax Act, 1961, reimbursement of the medical expenses to the managing director has been correctly restricted by the Tribunal to Rs. 12,000 for each of the assessment years 1969-70 and 1970-71 ? This court held that the use of the words whether convertible into money or not goes to show that the term benefit or amenity or perquisite cannot relate to cash payments. In CIT v. Alchemic Pvt. Ltd. 1981 130 ITR 169 (Guj), the term benefit or perquisite arising from business as appearing in section 28(iv) fell for consideration. The court held that, if what was received either by way of benefit or perquisite was money, there was no question of considering the value of such monetary benefit or perquisite under clause (iv) of section 28. It held that it was only if the benefit or perquisite was not in cash or money that section 28(iv) would apply. We, therefore, answer the questions in favour of the assessees and against the Revenue.
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1993 (3) TMI 40 - BOMBAY HIGH COURT
Actual Cost For Development Rebate, Capital Gains, Developement Rebate, Transfer ... ... ... ... ..... t. In fact, this payment is far more remote than the writing off of a debt in the case before the Kerala High Court. Mr. Inamdar has also drawn our attention to the decision of our High Court to which one of us (Mrs. Sujata Manohar J.), was a party, in the case of CIT v. Elys Plastics Pvt. Ltd. 1991 188 ITR 11, where the court held that a subsidy which was granted by the Central/State Government as an incentive for setting up or shifting industrial units to a backward area could not be considered as payment to meet the cost of land, building, plant and machinery although the quantum of subsidy was calculated on the basis of the fixed capital investment of the company in these assets. The Tribunal, therefore, was not right in directing that the cost of plant and machinery should be reduced by a sum of Rs. 24.92 lakhs. The question, therefore, which is referred to us at the instance of the assessee is answered in the negative and in favour of the assessee. No order as to costs.
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1993 (3) TMI 39 - RAJASTHAN HIGH COURT
Trading Loss ... ... ... ... ..... ion of the above requirements of section 37 of the Act, we find that the amount paid was an expenditure which was wholly and exclusively for the purposes of business carried on by the assessee. The assessee was under an obligation to lift a fixed minimum quantity of liquor in terms of the contract/licence and was under an obligation to make good the deficiency to the Government in case the said minimum quantity is not lifted. The expenditure was related to the business and was for the purposes of business and, therefore, has rightly been allowed. It cannot be considered as being in the nature of penalty. In view of the judgment of this court, we are of the view that the Income-tax Appellate Tribunal was justified in holding that the finding of the Appellate Assistant Commissioner that the licence fee deficiency debited to the goods account is allowable expenditure. Accordingly, the reference is answered in favour of the assessee and against the Revenue. No order as to costs.
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1993 (3) TMI 38 - GUJARAT HIGH COURT
Deduction, Income From Property, Municipal Taxes, Relief, Vacancy Allowance ... ... ... ... ..... dicta and this court, realising the difficulty in granting such benefit in the absence of provisions, expressed the hope that the authority concerned would consider the claim of the assessee. In the absence of any provision to that effect, it cannot be held that the assessee was entitled to the claim of set off and that the Tribunal went wrong in not granting the same. The last contention raised by the assessee was in respect of the assessment year 1970-71 only. We would have been required to go into that question if we had come to the conclusion that the income which the assessee had earned was business income. As we have come to the conclusion that the income was rightly held to be income from property, question No. 5 is not required to be answered. We, therefore, decline to answer the same. For the reasons stated above, we answer the other questions referred to us against the assessee and in favour of the Revenue. Reference is disposed of accordingly. No order as to costs.
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1993 (3) TMI 37 - BOMBAY HIGH COURT
Company, Reassessment, Reserves, Surtax ... ... ... ... ..... hat the reference should be decided in favour of the assessee. We have carefully considered the submission made on behalf of the assessee and we are not inclined to accept the same. Interim dividends declared by the assessee have to be deducted from the general reserve as on the first day of the relevant accounting year irrespective of the accounting treatment given by the assessee in its books of account. Further, the fact that interim dividends are declared by the board of directors, and not in the annual general body meeting would not in any way affect the provisions of the Second Schedule to the Surtax Act. By now, there are a number of decisions of the Supreme Court as well as of this court wherein it has been held that the dividends declared have to be reduced from the general reserve as it stands on the first day of the relevant accounting year. In this view of the matter, we answer both these questions in the affirmative and against the assessee. No order as to costs.
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1993 (3) TMI 36 - RAJASTHAN HIGH COURT
Business Expenditure, Inaugural Expenses ... ... ... ... ..... eas the production bad started on March 15, 1976, and, therefore, the expenses which are in the nature of inaugural function have to be allowed subject to the restrictions imposed by section 37(2) of the Act. We are, therefore, of the opinion that the expenditure which is in the nature of entertainment expenditure alone has to be excluded therefrom. Accordingly, it is held that the Income-tax Appellate Tribunal was not correct in law in disallowing inaugural expenses to the extent of Rs. 22,863, The list contains the expenses which are in the nature of entertainment and the deduction can be restricted only in respect of entertainment expenses. The matter shall be considered afresh by the Tribunal and the deductions out of Rs. 22,863 shall be allowed to the extent of the expenses which pertain to the inaugural function and do not form part of entertainment expenses, Consequently, the reference is answered in favour of the assessee and against the Revenue. No order as to Costs.
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1993 (3) TMI 35 - GUJARAT HIGH COURT
Advance Tax, Appeal To AAC ... ... ... ... ..... avour. With due respect, therefore, we cannot agree with the view taken by the Madras High Court in this behalf. The learned advocates for the assessee had drawn our attention to the decision of the Delhi High Court in CIT v. Caxton Press (P.) Ltd. 1981 129 ITR 462, wherein the Delhi High Court, after noticing that it was nobody s case that the delay in making the assessment was on account of any default by the assessee, held that, for that reason and because in the absence of passing any order for levy of interest, the Tribunal was right in drawing an inference that the Income-tax Officer had waived the interest. This judgment also supports the view which we are taking. For the reasons stated above, questions Nos. 1 and 2 are answered 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 Revenue and against the assessee. Reference is disposed of accordingly. No order as to costs.
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1993 (3) TMI 34 - BOMBAY HIGH COURT
Firm, HUF, Precedents, Registration ... ... ... ... ..... ship under section 30 of the Partnership Act. Such admission of minors to the benefits of the partnership cannot render the partnership firm invalid. The minors are not partners of the firm and therefore their entitlement to the benefits of partnership does not affect the constitution of a valid partnership firm in any manner. Had they been majors, they could have become partners in view of the Supreme Court judgment in Chandrakant Manilal Shah s case 1992 193 ITR 1. So their being given a share in the benefits of the partnership cannot render the partnership invalid. The partnership is between the karta of the joint Hindu family and two other persons. Such partnership is valid in law. We are not here concerned with the manner in which income from the partnership can be assessed in the hands of the minors. In the premises, the question which is referred to us is answered in the negative and in favour of the assessee. The question is answered accordingly. No order as to costs.
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1993 (3) TMI 33 - RAJASTHAN HIGH COURT
... ... ... ... ..... mitted when the particulars are concealed or inaccurate particulars are furnished in respect of the income which could be by furnishing the return and, therefore, the offence is committed at the time when initially the return is submitted. In these circumstances, we are of the view that the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal were justified in coming to the conclusion that the concealment in this case took place only on July 24, 1967, when the original return was filed and, therefore, penalty was leviable on the basis of the law applicable on that date. Consequently, the Income-tax Appellate Tribunal and the Appellate Assistant Commissioner were justified in reducing the penalty from Rs. 7,118 to Rs. 1,000. The above position of law is duly settled by the decision of the apex court referred to above and the decision of this court. Accordingly, the reference is answered in favour of the assessee and against the Revenue. No orders as to costs.
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1993 (3) TMI 32 - BOMBAY HIGH COURT
Business Expenditure, Business Income, Depreciation, Income, Railway Lines, Ton Mileage ... ... ... ... ..... shown as income pertaining to agricultural activity for the assessment year 1965-66 cannot be considered as income pertaining to agricultural activities because these amounts are also in respect of recovery of freight charges for carriage of sugarcane purchased from outsiders from their farm to the factory which charges were required to be paid by the outsiders to the assessee as per the terms of the agreement. This income, therefore, cannot be attributed to any agricultural activity of the assessee, since the sugarcane was carried to the assessee s factory for manufacturing sugar. Since these are the only facts before us, the question of allocation of such freight between agricultural activities and manufacturing activities does not arise. These amounts represent the freight charges recovered only in respect of sugarcane of outsiders carried to the assessee s factory. Hence, both these questions are answered in the affirmative and against the assessee. No order as to costs.
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1993 (3) TMI 31 - RAJASTHAN HIGH COURT
Advance Tax, Interest ... ... ... ... ..... s now be considered as those of the Hindu undivided family simply because, for the subsequent period, the assessments were made in the status of a Hindu undivided family. The word previously assessed would cover a case where an assessee has been assessed for any previous year under the Income-tax Act and simply because, in those assessment orders, the status as alleged has wrongly been mentioned as individual, it could not be contended that the assessment of the assessee in individual capacity was not made earlier or that he could be considered to be a person who has not been previously assessed by way of regular assessment. In these circumstances, we are of the view that the Income-tax Appellate Tribunal was justified in coming to the conclusion that no interest under section 217 of the Income-tax Act is chargeable for the assessment years 1976-77 and 1977-78. The reference is accordingly, answered in favour of the assessee and against the Revenue with no order as to costs.
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1993 (3) TMI 30 - GUJARAT HIGH COURT
Failure To Disclose Fully And Truly, Reassessment ... ... ... ... ..... e, the annual letting value in respect of the same was not computed. It was for the Income-tax Officer to draw the necessary inference therefrom. The Income-tax Officer did draw an inference in favour of the assessee and it was only because of the subsequent decision of the Calcutta High Court in the case of Liquidator, Mahmudabad Properties case 1972 83 ITR 470, that the subsequent Income-tax Officer changed his opinion. Thus, this clearly appears to be a change of opinion and it cannot be said that the income in this case had escaped assessment as a result of any failure or omission on the part of the assessee to disclose truly and correctly all the facts pertaining to its income. The Tribunal was, therefore, right in holding that there was no failure on the part of the assessee to disclose truly and correctly all the material facts relating to its income. We, therefore, answer all the three questions in favour of the assessee and against the Revenue, No order as to costs.
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1993 (3) TMI 29 - BOMBAY HIGH COURT
... ... ... ... ..... rived at by the income-tax authorities as well as the Tribunal that Rs. 93,450 was a revenue receipt is a correct conclusion on the facts and circumstances obtaining in the instant case. It is pertinent to note that, after litigation, some arrangement was arrived at between the assessee and the Polish company regarding the tractors already in the possession of the assessee, the ones which are on the high seas and the ones which are to be imported in future. Since the assessee is dealing in tractors, the tractors were its stock-in-trade. By arriving at the arrangement with the Polish company, Escorts Ltd. and Dass Motors, the assessee was able to dispose of the tractors which were its stock-in-trade. In this view of the matter, we answer question No. 1 in the affirmative and against the assessee. As regards the issue raised in question No. 2 we answer that Rs. 93,450 would be assessable under the head Business under section 28 of the Income-tax Act, 1961. No order as to costs.
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1993 (3) TMI 28 - MADRAS HIGH COURT
Tax Clearence Certificate ... ... ... ... ..... ttlement deed dated January 7, 1978, is given as Rs. 31,000. As the valuation of the interest of the first respondent conveyed under both the settlement deeds does not exceed Rs., 50,000, it has to be held that section 230A is not applicable to the documents in question and respondents Nos. 2 and 3 erred in insisting upon the production of the income-tax clearance certificate. Therefore, the impugned orders are illegal and they are liable to be quashed. As I am accepting the main contention of learned counsel for the petitioner, it is not necessary to deal with the other contentions urged on behalf of the petitioner. For all the reasons stated above, the writ petitions are allowed, the impugned orders are quashed and the second respondent is directed to register the settlement deeds dated December 29, 1977, and January 7, 1978, executed by the first respondent in favour of the petitioner without insisting upon the production of the income-tax clearance certificates. No costs.
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1993 (3) TMI 27 - KERALA HIGH COURT
Charitable Purpose ... ... ... ... ..... ary 21, 1989, aforesaid, we answer question No. 1 referred to this court in the affirmative, in favour of the assessee and against the Revenue. Similarly, following the earlier Bench judgment dated February 21, 1989, we decline to answer question No. 2 referred to this court. At the same time, we direct the Income-tax Appellate Tribunal to restore the appeal to file and dispose of the same in accordance with law and in the light of the available records, which, according to the assessee, show that the application filed by the assessee under section 12A was admitted and the application in Form No. 10 was received. This is a matter which should be verified after notice to the parties and the decision rendered by the Income-tax Appellate Tribunal. Question No. 2 is answered as above. The reference is disposed of accordingly. A copy of this judgment under the seal of the court and the signature of the Registrar will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.
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1993 (3) TMI 26 - CALCUTTA HIGH COURT
Business Income, Estimate ... ... ... ... ..... cial circumstances of the case. But such is not the case with the assessee. The assessee deals in wholesale spices. Failure to maintain stock accounts is a substantial defect in the accounts justifying an inference that the accounts are maintained in a manner from which the true and correct profits are not deducible. Nor is it contended at any stage that the gross profit rate shown is the market norm. Therefore, in our view, the Tribunal was right in holding that the estimate which was made in the case and the addition made on such estimate was quite reasonable and fair taking a cumulative view of all the factors the case presents. Moreover, the Tribunal s finding that the assessee s rate of gross profit is below the market rate which is ten per cent. is a finding of fact which the assessee has not challenged. For the reasons aforesaid, we answer this question in the affirmative and in favour of the Revenue. There will be no order as to costs. NURE ALAM CHOWDHURY J.-I agree.
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1993 (3) TMI 25 - ANDHRA PRADESH HIGH COURT
Appeal To Tribunal, Reference, Writ ... ... ... ... ..... on the application of the second respondent under section 254(2) of the Act. We hold that the only order which the Tribunal could have passed on that application was an order rejecting the request of the second respondent to rectify the order of the Tribunal dated September 13, 1990. In the result, we allow the writ petition, quash the order of the Tribunal dated April 29, 1991, and restore the order of the Tribunal dated September 13, 1990. Parties will suffer their respective costs. Immediately after the judgment was pronounced, counsel for the petitioners made an oral application for leave to file an appeal to the Supreme Court under article 134A of the Constitution of India. Since we have based ourselves mostly on decisions of the Supreme Court on the points which have been urged before us, we do not find that this case involves any question of law of such public importance as requires to the decided by the Supreme Court. The application for leave is, therefore, rejected.
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