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Case Laws
Showing 421 to 440 of 492 Records
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1998 (2) TMI 73 - MADRAS HIGH COURT
Wealth Tax, Reassessment ... ... ... ... ..... court prescribing the limits within which the view of the audit party can be regarded as information for the purpose of reopening the assessment. Though the reassessment is in accordance with the law subsequently laid down by the apex court, we must, having regard to the facts and in the circumstances of the case, hold that the Tribunal was not in error in upholding the assessee s objection to the reassessment on the ground that the reassessment could not have been validly made on the basis of the view communicated to the Assessing Officer by the audit party, which amounted to the interpretation of the rule, rather than merely inviting the attention of the officer to the existence of the rule. Our answer to the question referred to us, therefore, is that the Appellate Tribunal was right in the view that the reassessment made for this year was invalid in law and was required to be cancelled. Having regard to the circumstances of the case, we do not make any order as to costs.
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1998 (2) TMI 72 - MADRAS HIGH COURT
Special Deduction, Condition Precedent ... ... ... ... ..... Tamil Nadu Heat Treatment and Fetting Services (P.) Ltd. (No. 1) 1999 238 ITR 529 (Mad)), pertaining to the same assessee relatable to the assessment years 1984-85 to 1986-87, wherein, we have held, by way of elaborate discussions, that the activity carried on by the assessee is one of manufacturing activity. The rationale or reasoning projected therein will hold good here also and in that view of the matter, we are of the view that the assessee s activity cannot be any one, other than the one relatable to manufacturing activity entitling it to claim necessary deductions under the sanguine provisions adumbrated under sections 80HH and 80-I of the Income-tax Act. These questions are answered accordingly. In fine, the activity of the assessee is a manufacturing activity entitling it to claim deduction under sections 80HH and 80-I of the Income-tax Act. This tax case petition is, thus, disposed of. There shall, however, be no order as to costs, in the circumstances of the case.
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1998 (2) TMI 71 - MADRAS HIGH COURT
Investment Allowance ... ... ... ... ..... of affairs, it cannot at all be stated that the crank shafts, subjected to heat treatment, etc., cannot at all change the status of new products of different quality for a different quality for a different purpose altogether. In this view of the matter, we are of the view that the activities of the assessee in relation to raw or untreated crank shafts being subjected to heat treatment, etc., is definitely a manufacturing activity entitling it to claim investment allowance under section 32A of the Income-tax Act. We answer questions Nos. 2 and 3 accordingly. In fine, we hold that the assessee is engaged in manufacturing activities in relation to crankshafts being subjected to heat treatment, etc., for the assessment years 1984-85, 1985-86 and 1986-87 and, consequently, entitled to investment allowance under section 32A of the Income-tax Act, 1961. These tax case petitions are, thus, disposed of. There shall, however, be no order as to costs, in the circumstances of the case.
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1998 (2) TMI 70 - MADRAS HIGH COURT
Rectification Of Mistakes, Appellate Tribunal, Discretionary Power, Reassessment ... ... ... ... ..... therefore, is (i) that on the facts of this case, the Tribunal was right in rejecting the miscellaneous application filed by the assessee for rectification of the order under section 254(2) of the Act (ii) that the Tribunal was not right in holding that the later decision of the Supreme Court could not be followed in view of the earlier decision of the Supreme Court in the case of Kasturbhai Lalbhai 1977 109 ITR 537, but we make it clear that though the Tribunal had the discretion to allow the application on account of the later decision of the Supreme Court, in this case, it did not commit any error in declining to do so, as the ultimate result would be clearly unjust and not in accordance with the substantive provision of the Act and (iii) that the Tribunal was right in holding that the rectification of the earlier order would have the effect of escapement of taxation, and, therefore, the order need not be rectified. The Revenue shall be entitled to costs of sum of Rs. 750.
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1998 (2) TMI 69 - MADRAS HIGH COURT
Standard Deduction ... ... ... ... ..... rties that personal use was permitted and a sum of Rs. 100 was collected for such personal use. The reasoning of the Tribunal is wholly unsustainable. When once the vehicle is provided by the employer and that very vehicle is used for personal use by the employee on payment, such user by the employee and the payment therefor, cannot be artificially bifurcated and ignored for the purpose of deciding the nature and extent of the user of the vehicle by the employee. This is clearly a case where the vehicle was provided for personal as also official use, and the vehicle had not been provided wholly and exclusively for official purpose. In the statement of the case, the Tribunal has tried to justify its order even after setting out the question referred. This is wholly improper. Our answer to the question that has been referred to us is, therefore, in the negative, in favour of the Revenue and against the assessee. The circumstances of the case will not make any order as to costs.
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1998 (2) TMI 68 - MADRAS HIGH COURT
Priority Industry, Job Work Receipts, Interest On Eb Deposits, Forward Contracts, Commission, Interest On Chit Deposits
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1998 (2) TMI 67 - MADRAS HIGH COURT
Capital Expenditure, Revenue Expenditure, Textile Mill, New Motors, Replacement ... ... ... ... ..... business was established would have been rendered infructuous. Looms and spindles used for the manufacture of yarn and textiles could only be run with the aid of motors and the motors which had been installed at the time of establishment of the mills having become worn out needed replacement. Replacement of such motors is only for the purpose of keeping the looms and spindles running and making it possible for the production to continue. Having regard to the nature of the use to which the motors were put in the factory which had merely replaced the worn out motors and the motors were essential for running the machinery with the aid of which the product, viz., textiles was manufactured, it cannot be held that the expenditure on the purchase of new motors was capital expenditure and not revenue expenditure. Our answer to the question referred to us therefore, is in the affirmative, against the Revenue and in favour of the assessee. The assessee is entitled to costs of Rs. 750.
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1998 (2) TMI 66 - MADRAS HIGH COURT
Additional Tax, Amalgamating Company, Undistributed Profits ... ... ... ... ..... with those of the Income-tax Act. After the transfer of all assets and liabilities, debts and obligations of the amalgamating company to the amalgamated company in terms of the sanction accorded by the company court under section 394 of the Companies Act, the striking out of the name of the amalgamating company from the register does not wipe out the obligation to comply with an order made by the Income-tax Officer under section 104, and the order is capable of being enforced against the amalgamated company. Our answer to the question that has been referred to us, therefore, is that the Tribunal was not right in holding that the proceedings against the amalgamated company could not be initiated on account of the failure of the amalgamating company to distribute the statutory percentage of the accumulated profits, our answer is in favour of the Revenue and against the assessee. The Revenue shall be entitled to costs in the sum of Rs. 750 (Rupees seven hundred and fifty only).
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1998 (2) TMI 65 - MADRAS HIGH COURT
Concealment ... ... ... ... ..... , does not apply to the facts of this case. 12. We also hold that the Tribunal has also overlooked that the ITO had invoked the Explanation to s. 271(1)(c) of the Act, and the assessee has not discharged the burden cast on the assessee by the Explanation under s. 271(1)(c) of the Act. We are of the opinion that the Tribunal cancelled the penalty without taking into account the material distinction prevalent between the facts appearing for the subsequent assessment years and the facts of the three assessment years in question. We are of the opinion that the levy of penalty is warranted on the facts and circumstances of the case, and we therefore hold that the Tribunal was not correct in cancelling the penalty levied under s. 271(1)(c) of the Act, for the asst. yr. 1967-68 to 1969-70. Accordingly, we answer the common question for all the three assessment years in the negative and in favour of the Department. In the circumstances of the case there will be no order as to costs.
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1998 (2) TMI 64 - MADRAS HIGH COURT
Special Deduction, New Industrial Undertaking In Backward Area, Manufacture Or Production ... ... ... ... ..... ition to manufacture of article, also in construction activity and the profit and loss account of the assessee includes profit and loss from the construction activity. That construction activity cannot be regarded as industrial undertaking nor can it be taken into account on the ground that the same assessee is also carrying on manufacturing activity along with the construction activity. If the profit and loss account is capable of being separated and that part pertaining to the manufacturing activity, ascertained then to that extent, the assessee is entitled to claim benefit under section 80HH, on the ground that the account is one and the activities of the assessee, includes manufacture, it cannot claim benefit under section 80HH in respect of an activity that does not involve manufacture or production of articles. We therefore answer the reference in the negative, in favour of the Revenue and against the assessee. The Revenue is entitled to its costs in the sum of Rs. 750.
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1998 (2) TMI 63 - MADRAS HIGH COURT
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... ... ..... sts of the Revenue. The fact that the assessment year in question is 1971-72 which is long prior to the date of the amendment of the section 263 by the Finance Act, 1988, does not in any manner affect the ambit of the Commissioner s power under section 263 as it has been laid down by the apex court that even the view that prevailed with regard to section 263 as it stood prior to 1988 was too narrow an interpretation of the word record and was unjustified. The Explanation added to section 263(1) in the year 1988 is, therefore, to be regarded as declaratory. In this view of the matter, the questions that have been referred to us are required to be answered in the negative, in favour of the Revenue and against the assessee and they are so answered. The Tribunal not having gone into the merits of the case while making the order from out of which the questions referred have arisen, the Tribunal shall now proceed to consider the merits of the appeal filed before it by the assessee.
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1998 (2) TMI 62 - MADRAS HIGH COURT
Writ, Powers Of Tribunal, Assessment, Income Tax ... ... ... ... ..... sessee. It is also pertinent to note that as noted earlier as against the rejection of the reference application by the Tribunal under section 256(1) of the Act, the petitioner has not chosen to move this court under section 256(2) of the Income-tax Act. It is true that there is no bar for invoking the jurisdiction of this court under article 226 of the Constitution of India even though he has not pursued his further remedies under section 256 of the Income-tax Act. None the less there is a valid direction by the Tribunal to the Income-tax Officer to consider the issue of limitation as raised by the petitioner and thus there is no question of any lack of jurisdiction on the part of the Income-tax Officer to consider the issue of limitation, so as to warrant a writ of prohibition. Having regard to the aforesaid reasons I am unable to accept the contentions raised by the petitioner and the writ petition is dismissed. No costs. Consequently, connected W. M. P. is also dismissed.
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1998 (2) TMI 61 - MADRAS HIGH COURT
Interest On Borrowed Capital, Income Tax, Company ... ... ... ... ..... ded and had only been channelled through Ace Investments Private Limited. The Tribunal has failed to notice the facts which had been set out in the draft assessment order in annexure B, and has also erred in adopting the wrong approach for the purpose of deciding as to whether the amount disallowed was a sum which could properly fall within the ambit of section 36(l)(iii) of the Act. The amount disallowed was the amount paid on amounts borrowed, but not used for the purpose of business or profession of the assessee. Rupees 10 lakhs invested in Ace Investments Limited being in substance and reality an amount advanced to the Bombay company for financing the construction undertaken by it at Bombay, cannot be said to be an amount which formed part of the capital borrowed for the purpose of the assessee s business. We, therefore, answer the question referred to us in the negative, in favour of the Revenue and against the assessee. The Revenue shall be entitled to costs of Rs. 750.
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1998 (2) TMI 60 - MADRAS HIGH COURT
Business Expenditure, Company ... ... ... ... ..... nt when made, though lawful is on account of the inaction on the part of the company, or of the failure on the part of the Central Government to grant approval, becomes refundable to the company and the company is not permitted to waive the recovery. The duty so imposed on the company not to waive the recovery does not have the effect of making the payment made during the six months period after the coming into force of the Companies (Amendment) Act illegal. The failure on the part of the company to effect recovery may be characterised as illegal but not the payment made at the time it was made. The view of the Income-tax Officer that such payment was illegal, was clearly contrary to the provisions of the Act and the Tribunal has rightly reversed that part of the order of the Income-tax Officer. We, therefore, answer the question referred to us in the affirmative, in favour of the assessee and against the Revenue. The assessee shall be entitled to costs in the sum of Rs. 750.
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1998 (2) TMI 59 - KERALA HIGH COURT
Capital Or Revenue Expenditure, Expenditure On Maintenance, Machinery, Revenue Expenditure ... ... ... ... ..... of the assessee relating to the assessment year 1983-84, in which an identical question was involved. The Appellate Tribunal, therefore, relying on its earlier decision relating to the assessment year 1983-84, in which it took the view that the expenditure incurred on replacement of machinery was revenue in nature, held that the expenditure incurred on replacement of machinery was revenue expenditure. At the instance of the Revenue, an identical question was referred to this court for opinion for the assessment year 1983-84. Both references relating to the assessment years 1983-84 and 1984-85 came to be heard together before us. In the reference relating to the assessment year 1983-84, we accepted the view taken by the Appellate Tribunal that the expenditure incurred on replacement of machinery was in the nature of revenue. Following the said judgment, we answer the question in this reference in the affirmative, that is, in the favour of the assessee and against the Revenue.
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1998 (2) TMI 58 - MADRAS HIGH COURT
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... ... ..... f the accommodation in accordance with Explanation 2 to rule 3(a)(iii) of the Income-tax Rules taking into account all aspects of the matter including the municipal valuation of the property, and its earlier order fixing the fair rental value of the property or the rent which a similar accommodation would fetch in the same locality. Needless to add, it is also open to the assessee to establish before. the Tribunal that the fair rental value of the property fixed by the Tribunal at Rs. 42,000 in I.T.A. No. 571/(Mds) of 1983 is not conclusive and requires modification or it is something less than it was earlier fixed by the Appellate Tribunal on the ground that the present proceeding is an independent proceeding in so far as the assessee is concerned. In this view of the matter, the question of law referred to us is liable to be answered in favour of the Revenue. Accordingly, the question of law referred to us is answered in the negative and in favour of the Revenue. No costs.
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1998 (2) TMI 57 - MADRAS HIGH COURT
Business Expenditure, Guest House, Effect, Depreciation On Building ... ... ... ... ..... been introduced only from April 1, 1979, by the Finance Act, 1983, it will not have any larger retrospective effect than that provided by the Legislature. Since the provisions of section 37(5) of the Act are not applicable to the facts of the case on the basis of the decision of this court in the case of CIT v. Aruna Sugars Ltd. 1980 123 ITR 619 we are of the view that the expenses incurred by the assessee are allowable in the computation of the business income of the assessee as the guest house maintained by the assessee cannot be regarded as a guest house within the meaning of section 37(4) of the Act. We are, therefore, of the view that there is no infirmity in the order of the Appellate Tribunal in holding that the assessee was entitled to deduction of expenditure incurred on the maintenance of the guest house and depreciation of the building used as the guest house. Accordingly, we answer the question of law referred to us in the affirmative and against the Department.
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1998 (2) TMI 56 - MADRAS HIGH COURT
Wealth Tax, Valuation Of Assets ... ... ... ... ..... as good law, in the light of the subsequent decision of the Supreme Court in the case of Bharat Hari Singhania v. CWT 1994 207 ITR 1, wherein the court upheld the validity of rule 1D and held that rule 1D has to be followed in each and every case of unquoted equity shares of a company (other than an investment company or a managing agency), and that it is not a matter of choice or option. The court further held that where there is a rule prescribing the manner in which a particular property has to be valued, the authorities under the Act have to follow it, and cannot devise their own ways and means for valuing the assets. The Tribunal, therefore, was clearly in error in holding that rule 1D was not required to be applied, even though the shares of the company were not quoted on the stock exchange in the previous year relevant to the assessment year 1976-77. The question referred to us is, therefore, answered in the negative, in favour of the Revenue and against the assessee.
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1998 (2) TMI 55 - MADRAS HIGH COURT
Special Deduction ... ... ... ... ..... e gross amount of the fees received by it for the work done by it abroad under section 80-O of the Act, and in further directing that the amounts claimed as unabsorbed depreciation relating to the assessment years 1977-78 and 1978-79 were required to be carried forward. The Income-tax Officer had properly computed the income by way of fees and in finding that after making the deductions required to be made under the provisions of the Act, the amount eligible for deduction under section 80-O of the Act was nil . He had also rightly deducted the amount of the business loss of earlier years and unabsorbed depreciation from the gross total income of the assessee, and had found that the assessee had, after making all such deductions, a taxable income of Rs. 67,625. Our answer to the question that has been referred to us, is therefore in the negative, in favour of the Revenue tnd against the assessee. The Revenue is entitled to its costs, which we quantify in the sum of Rs. 1,000.
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1998 (2) TMI 54 - MADRAS HIGH COURT
Wealth Tax, Exemption ... ... ... ... ..... )(ba) of the Unit Trust of India Act has to be given effect to. We have already held that section 32 of the Unit Trust of India Act has an overriding effect and since section 32 of the Unit Trust of India Act overrides the provisions of section 5(3) of the Wealth-tax Act, the assessee is entitled to exemption in respect of the units held by the assessee to the extent of Rs. 25,000, notwithstanding anything contrary contained in the Wealth-tax Act and notwithstanding the fact that the assessee was holding the units for a period of less than six months prior to the relevant valuation date. We are of the opinion that the Tribunal was correct in its conclusion in holding that the assessee was entitled to exemption under the provisions of section 32 of the Unit Trust of India Act and there is no infirmity in the order of the Appellate Tribunal. Accordingly, we answer the question of law referred to us in the affirmative and against the Revenue. There will be no order as to costs.
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