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1979 (6) TMI 87 - ITAT MADRAS-A
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... ... ..... ture of advertisement since the rally was widely attended by motorists from all over the country, that the assessee, which is manufacturing an essential component, utilised the opportunity to advertise its products and that the contribution to the Grand Prix was only a form of advertisement. The revenue has come up in appeal before us aggrieved by the order of the AAC. 8. After hearing the parties, we find that this issue is covered in favour of the assessee by the order of the Tribunal, Madras Bench A , to which one of us, i.e., the Judicial Member is a party, the other Member being Shri D. Rangaswamy, Vice-President, in the case of ITO, Company Circle I(3), Madras vs. M/s. Hydraulics Ltd., Madras,(3) The reasonings found in that case clearly support the stand of the assessee that the expenditure is entitled to deduction having been incurred for advertisement of its products which would result in the promotion of its business. 9. In the result, the appeal is allowed in part.
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1979 (6) TMI 82 - ITAT MADRAS-A
Mercantile System ... ... ... ... ..... any incorporated under the Companies Act, 1956, could be considered as part of the accounts though they may not be forming part of the books of accounts. Likewise, whatever statements that may accompany the return would also form part of accounts and the claim made for statutory liability in the return of income is also a provision. What we desire to stress here is that it is not correct to state that it is the liability that gets a deduction in our opinion, it is the expenditure which creates a liability, that gets deducted. 8. From the above discussions, we are of the opinion that there is no lacuna in the provision as appeared to be in the minds of the Members as noticed in the order of the Tribunal in IT Appeal No. 4259 (Cal.) of 1974-75. Finally, we are of the view that section 40A(7) would be applicable to this case and since the assessee had not complied with the provision, the deduction claimed cannot be allowed. 9. In the result, the cross objection stands dismissed.
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1979 (6) TMI 80 - ITAT JAIPUR
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... ... ..... remission of his liability. Remission has to be granted by the creditor. Similarly, cessation of the liability may occur either by reason of the operation of the law, i.e. on the liability becoming unenforceable at law by the debtor declaring unequivocally his intention not to honour his liability when payment is demanded by the creditor, or by a contract between the parties on by discharge of the debt-the debtor making payment thereof to the creditor. Mere transfer of an entry by the debtor does not bring about a cessation or remission of the liability. Reference may be made to the decision in the case of J.K. Chemicals Ltd. vs. CIT(6). 6. Looking to aforesaid facts, in my opinion, the finding of the learned AAC is not correct. There was no cessation of liability in respect of the amount in question. So, the amounts in question could not be added as income of the assessee in the year of account. Accordingly, the additions are deleted. 7. In the result, the appeal is allowed.
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1979 (6) TMI 79 - ITAT JAIPUR
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... ... ..... decide the point afresh in accordance with law. 7. Other point for determination is regarding the cash credit of Rs. 5,000 in the name of Shri Kishanchand. The statement of this creditor were recorded. He clearly stated that the amount in question was deposited by his grant-father in his name. The loan was genuine. Even the discharge pronote was produced before the learned AAC. The authorities below did not say that the pronote was not executed. Once it is proved that a Pronote was executed at the time of advancing the loan, the presumption would be that the transaction was genuine. Under these circumstances it was for the Department to show that the said pronote was not genuine. On behalf of the Revenue no such evidence was produced. Looking to the pronote and the statement of the depositor it is clear that this loan was genuine. The finding of the learned AAC to the contrary is wrong. So the addition of Rs. 5,000 is deleted. 8. In the result, the appeal is allowed in part.
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1979 (6) TMI 78 - ITAT JAIPUR
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... ... ..... me chargeable to tax had escaped assessment within the meaning of that expression in s. 147 and no proceedings under s. 34 of the replaced Act in respect of any such income are pending at the commencement of this Act, a notice under s. 148 may, subject to the provisions contained in s. 149 on s. 150 can be issued with respect to that asst. yr. and all the provisions of this Act shell apply accordingly. If we read this provision, alongwith the Notification No. S.R.O. 341 dt. 13th Feb., 1956, issued by the Board, it would be clear that for the purpose of starting proceedings under s. 148 of the Act, the ITO, Jodhpur was quite competent to start such proceedings. Looking to the aforesaid facts, evidence on record, preponderance of probabilities and hard facts of life, we are of the opinion that the authorities below were not correct in making the addition of Rs. 4,25,000 in the hands of the assessee. Accordingly, the addition is deleted. 20. In the result, the appeal is allowed.
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1979 (6) TMI 77 - ITAT JABALPUR
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... ... ..... ommon knowledge that the profit earned by different businessmen carrying on similar type of business cannot be the same. There are various circumstances where one can earn better profit than the other even though the line of business is the same. The earning of the profit depends on person. In this case, we find that the assessee had adopted this practice of interpolation in order to bring down its profit on par with the profit earned by the other dealers. In view of these facts and circumstances of the case we hold that the learned AAC was justified in sustaining the disallowance in respect of inflation of purchases. 7. Regarding the addition of Rs. 2,200 in respect of transport charges, we find that the ITO had not brought out any material except that these were not vouched. The transport charges claimed by the assessee considering the volume of business and the profit earned is reasonable and as such the disallowance of Rs.2,200 is deleted. 8. The appeal is partly allowed.
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1979 (6) TMI 76 - ITAT JABALPUR
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... ... ..... t on the decision in the appeals because as observed by us earlier, the learned AAC was not competent to enhance the income by adding profit under s. 41(2) of the I.T. Act. 12. It was alternatively argued by Shri Nema that if profit was at all chargeable under s. 41(2) their IT act then the capital expenditure amounting to Rs. 19,195, details of which have been furnished by the assessee, should have been added to the written down value. The learned AAC has discussed this claim but he found that the assessee could not prove the entire expenditure claimed by him. We do not consider it necessary to examine this argument as we have already held that the learned AAC had no power to enhance the income by adding profit under s. 41(2) of the I.T. Act as it was a new item of income not shown in the return nor considered by ITO. 13. Assessee s appeal for asst. yr. 1972-73 is dismissed while his appeal for asst. yr. 1973-74 is allowed and the addition made by the learned AAC is deleted.
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1979 (6) TMI 75 - ITAT INDORE
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... ... ..... tax and necessarily, therefore, it cannot exclude a beneficial owner when it comes to the granting of a certain deduction. In coming to the above conclusion the Tribunal relied on the decision of the Supreme Court in the case of K.M. Viswanatha Pillai vs. K.M. Shanmugam Pillai, AIR 1969 SC, 493. Since the lady was not the wife of the assessee, and as nothing was paid by her towards the cost of the truck, she can, at the worse, be treated as benamidar for the assessee, but even in respect of benami transaction, it is the de facto ownership which has to be taken into account. Now, in the present case, the facts and circumstances clearly go to show that it was the assessee who was the de facto owner and in these circumstances he alone was entitled to depreciation as per the provisions of s. 32 of the IT Act. We, therefore, uphold the decision of the AAC. 10. In the result, the appeal filed by the assessee is partly allowed, while the appeal filed by the Department is dismissed.
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1979 (6) TMI 74 - ITAT INDORE
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... ... ..... e nature of entertainment and hence hit by the provisions of s. 37(2B) of the Act. The learned counsel of the assessee, on the other hand, has relied on the order of the CIT(A) and the earlier decisions of this Bench of the Tribunal and has submitted that the CIT(A) was quite justified in deleting the disallowance made by the ITO. 4. After considering the rival contentions, we do not find any infirmity in the order of the CIT(A). This Bench of the Tribunal, following the decisions of the Gujarat High Court in 106 ITR 424 and the Bombay High Court in 116 ITR 292, has been taking the view that the expenses incurred by an assessee on serving light refreshments and meals to its trade clients during the ordinary course of business are allowable as business expenditure and that such expenses are not hit by the provisions of s. 37(2B) of the IT Act, 1961. We prefer to follow the same view in this case and uphold the decisions of the CIT(A). 5. In the result, the appeal is dismissed.
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1979 (6) TMI 73 - ITAT GAUHATI
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... ... ..... word income in s. 64 must be interpreted as only referring to taxable income as otherwise it would involve the constitutionality of the section. 14. Looked at from any point of view, we are convinced that s. 64 authorities the addition of only the taxable income of the spouse. It follows that in computing that taxable income all the deductions allowable under the Act have to be taken into account. Therefore, the assessee in the present case is entitled to the deduction under s. 80L in respect of the interest income of the wife added under s. 64 not because it is interest income of the assessee in respect of which the deduction is to be given but because the interest income of the wife that can be added under s. 64 has itself to be computed after allowing the deduction under s. 80L. Therefore, we allow the claim of the assessee for the deduction of a further sum of Rs. 3,000 and direct the ITO to recompute the total income accordingly. 15. In the result, the appeal is allowed.
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1979 (6) TMI 72 - ITAT GAUHATI
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... ... ..... iculars of any asset which was required by the assessee to be disclosed in the return or any furnishing of inaccurate particulars of an asset shown by the assessee we are of the opinion that no penalty can be imposed for these assessment years also. The fact that finally assessed wealth is admittedly no different from the returned wealth assumes significance, for, it is a moot point whether in such circumstances penalty can be imposed under s. 18 (1)(c) merely because the claim of the assessee regarding the nature of the asset is rejected and he has held to have furnished inaccurate particulars of that asset. Therefore, even if it could be said that the statement of the assessee that the advance to the wife as a loan was inaccurate the benefit of the double as a regarding imposition of penalty inspite of there being no loss of revenue must also go to the assessee. We have, therefore, no hesitation in cancelling the penalties imposed. 8. In the result, the appeals are allowed.
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1979 (6) TMI 71 - ITAT GAUHATI
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... ... ..... ss into partnership was in the course of the business and the object related to the business, for the assessee with his falling health could not carry on by himself this business as well as the proposed cinema business. The facts of the case clearly indicate that the induction of the son as a partner did not amount to a gift, for, it was fully supported by commercial consideration. Hence, the transaction was not a gift and in any event was exempt under s. 5(1)(xiv) of the Act. Even if it could be held to be a gift, it is obvious that the business had no goodwill since it was dependent on the agency with Indian Oil which could be terminated at any time. There being no goodwill at all there was no justification for valuing such goodwill alone and imposing the gift-tax as was held by the Supreme Court. Hence, looked at from any point of view, the assessment is untenable and it is accordingly cancelled. 6. In the result, the appeal is allowed and the cross objection is dismissed.
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1979 (6) TMI 70 - ITAT GAUHATI
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... ... ..... sed. 5. From the above narrative, it will be apparent that the penalties were cancelled on the finding of fact that there was no material to draw an inference that the failure to file the returns of wealth was without reasonable cause. That finding is a question of fact and both the questions raised by the Revenue challenged only that finding. The Hon ble Gauhati High Court has held in the case of M/s. Ganeshdas Sreeram (1), that the Tribunal s finding that there was reasonable cause for the delay in the filing of the return is a finding of fact and no question can arise therefrom. The Hon ble High Court has also pointed out that the question framed as grounds of appeal do not fall within the scope of a reference under s. 256 of the Act. Respectfully following the decision, we must conclude that in the present case also no question of law can arise out of the order of the Tribunal and we accordingly decline to draw up a statement of the case. 6. The applications are rejected.
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1979 (6) TMI 69 - ITAT GAUHATI
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... ... ..... gly cancelled the imposition of penalty. 5. From the above narration, it is clear that no proposition of law came up for consideration before the Tribunal and the case was decided entirely on finding of facts. The questions raised by the Revenue challenge only those findings of fact. The facts of the case, annexed to the reference application, do not mention any irrelevant material taken into consideration or any relevant material omitted to be considered by the Tribunal. In the circumstances those questions do not arise for consideration. In view of the principles laid down by the Mysore High Court in the case of Venkateswara District Motor Service(2). Moreover, as held by the Supreme Court in the case of Ashoka Marketing Ltd. whether the assessee had concealed his income was a question to be decided on the facts of the case and no question of law arises from the order of the Tribunal. We, therefore, decline to draw up a statement of the case. 6. The application is rejected.
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1979 (6) TMI 68 - ITAT GAUHATI
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... ... ..... of computing interest under s. 214 just as they should be given credit for the purpose of computation of interest under s. 215. Once we find that such a view is possible even if that view is not upheld by making a strict interpretation of s. 214 as against a liberal interpretation of s. 215 on the ground that s. 215 imposed a charge on the assessee as opposed to a liability on the Revenue imposed by s. 214, the issue would remain debatable. It has been held by the Supreme Court in the case of Volkart Brothers and Others (2) that if a mistake can be discovered only after a debate it can not be mistake apparent from record. Hence we are of the opinion that in the present case the alleged mistake of the ITO having granted interest under s. 214 on amounts which do not qualify is not a mistake apparent from record and it follows that he could not rectify it under the provisions of s. 154 of the Act. Hence we cancel the rectification order. 6. In the result, the appeal is allowed.
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1979 (6) TMI 67 - ITAT GAUHATI
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... ... ..... assessment record shows that the assessee filed a confirmation letter and claimed that these cash credits represented loans. It was only by disbelieving the explanation of the assessee that the addition was made. The Supreme Court has held in the case of Anwar Ali that penalty cannot be imposed only by disbelieving the explanation of the assessee if there is no other cogent evidence to establish that any income of the assessee was actually concealed. In the present case there is no other evidence to indicate that the addition made, in fact, represented any concealed income of the assessee. Hence the facts of the case did not invite the imposition of the penalty. We accordingly cancel the penalty imposed even though conformably with the judgement of the Hon ble High Court, we hold that the proceedings were properly initiated under the 1961 Act in respect of the assessment for the year 1961-62 which was concluded under the 1922 Act. 5. In the result, the appeal stands allowed.
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1979 (6) TMI 66 - ITAT GAUHATI
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... ... ..... 3-74, 1974-75 and 1975-76 on the basis of the returns filed by the assessee on 5th Sept., 1975 for all the three years and that in the returns no depreciation was claimed. It is urged that in computing the income or profit under s. 41(2), the depreciation actually allowed should be taken into account and as such the AAC was proper in law and on facts to delete the addition made by the ITO. 6. We have taken into account the contentions of both the sides. We find that the Revenue has not controverted the fact that the assessments for the asst. yrs. 1973-74 to 1975-76 were made under s. 143(1) on the basis of the returns filed by the assessee in which no claim for depreciation was made. We are therefore of the view that only the depreciation actually allowed should be taken into account in computing the profit of the assessee under s. 41(2). In this view of the matter, we are in agreement with the view of the AAC His order is confirmed. 7. In the result, the appeal is dismissed.
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1979 (6) TMI 65 - ITAT GAUHATI
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... ... ..... he was assessable under the Act or disclose fully and truly all material facts necessary for the assessments Of the wealth of the wife so includible. But we find that the result of the order of the AAC which we are hereby confirming was that the net wealth assessed was restored to the figure originally assessed though the character of the asset was taken as an asset transferred to the wife otherwise than for adequate consideration though in the original assessments of it was taken as an amount transferred to the wife as a loan. The net result, however, is that the figure of net wealth undergoes no change after the re-assessment and hence it will be academic to go into the question whether the re-assessment was valid or not and, therefore, we prefer not to enter into any discussion on that point. We, therefore, consider it unnecessary to deal with the grounds taken in the memorandum of cross-objections. 10. In the result, all the appeals and the cross objection are dismissed.
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1979 (6) TMI 64 - ITAT GAUHATI
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... ... ..... firm which has disclosed also income from the vehicle under transport charges. It is submitted further that all expenses like registration fees, insurance premium etc., were met by the assessee. It is contended on behalf of the Assessee that the AAC was fully justified in following the decision of the Tribunal. Amritsar Bench, Amritsar in ITA No. 1327 of 1971-72 dt. 10th Sept., 1975. The assessee has also filed a copy of this order of the Amritsar Bench. It is, therefore, urged that the order of the AAC may be sustained. 5. We have taken into account the rival contentions of both the sides. We find that the case of the assessee under appeal is covered by the decision of the Tribunal. Amritsar Bench. Amritsar, referred to above. Respectfully following the above decision of the Tribunal, we are in agreement with the order of the AAC on this point. The assessee is entitled to depreciation on the truck. The order of the AAC is confirmed. 6. In the result, the appeal is dismissed.
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1979 (6) TMI 63 - ITAT GAUHATI
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... ... ..... tion of the accounts were delayed and the fact that the partners were absent are not controverted. There is no attempt to establish that these facts have no nexus with the delay or that they were not beyond the control of the assessee. The ITO has mentioned that the assessment was completed on the basis of a revised return which also indicates that the ITO was satisfied that the original return was not correct and complete leading to the inference that the assessee endeavoured to file the return as soon as possible without further delay after the expiry of the time allowed under 139(1) of the Act and was prevented by reasons beyond his control in complying with the notice under s. 139(2). We, therefore, find that the penalty saw imposed arbitrarily in the absence of any clear finding on the fact that the failure to comply with the notice under s. 139(2) was without reasonable cause. We have, therefore, no hesitation in cancelling the penalty imposed. 7. The appeal is allowed.
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