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Case Laws
Showing 61 to 80 of 175 Records
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1982 (1) TMI 127 - ITAT MADRAS-D
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... ... ..... ection. The facts found by the CIT(A) are not disputed, according to which the borrowings during the relevant year by the firm were entirely use for its business purposes, If it is the department rsquo s case that the loans borrowed by the assessee in the past years have been advanced to the two partners, then it has not brought sufficient materials to connect such borrowings with the advances made to the partners concerned during the relevant year and thus it has failed to substantiate its claim that moneys borrowed by the firm on which it was paying interest has not been utilised for business purposes, but had been advanced to the partners for their private purpose. The departmental representative was unable to adduce before us any material in this connection to support its stand. In the circumstances, we are unable to agree with the department that the CIT(A) erred in deleting the disallowance. The objection is therefore rejected. 5. In the result, the appeal is dismissed.
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1982 (1) TMI 125 - ITAT MADRAS-D
Salaries, Standard Deduction ... ... ... ... ..... on G. Rajendran on the loan taken from the assessee. The claim was disallowed only on the ground that the loan was taken to purchase the site and not for putting up the building. According to the authorities, interest is allowable against income from property under section 24(1)(vi) of the Act, which authorise a deduction of the amount of interest payable on borrowed capital where the property has been acquired, constructed, repaired, renewed or re-constructed with such borrowed capital. The word acquired in section 24(1)(vi) would certainly comprehend the purchase of sites. We are unable to hold that property would comprehend only the building part of such property and not the site on which it is constructed. The view of the authorities is too narrow and not justified by either the language or the purposes of the deduction. Hence, the appeal on this point also succeeds. 5. This para is not printed here as it deals with a minor issue. 6. The appeal will be treated as allowed.
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1982 (1) TMI 123 - ITAT MADRAS-D
Investment Allowance ... ... ... ... ..... no statutory formalities required for reopening the profits and loss account and making further adjustments. Under the circumstances, we find no merit in the departmental appeal. There is no material for holding that there was any deliberate contravention of any of the provisions of section 32A. In such instances, we understand that it is also not the intention of the Central Board of Direct Taxes to deprive the assessees of their right to legitimate deduction warranted by law as noticed in respect of development rebate reserve in Circular No. 189 dated 3-1-1976. We do not find any basis for the view that rectification can be permitted only where there is insufficiency and not where there has been a total omission. If in both cases the rectification was only of a bona fide mistake, there is no justification for coming to two different conclusions as between them. In any view of the matter the departmental appeal has to be dismissed. 4. In the result, the appeal is dismissed.
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1982 (1) TMI 122 - ITAT MADRAS-D
Payment Not Deductible, Interest Paid By Company On Deposits ... ... ... ... ..... rst appellate authority that the borrowings were for purposes of payment of income-tax. The other argument that interest allowed under section 80V is also subject to section 40A(8), is based upon the non obstante clause found in the words notwithstanding anything to the contrary contained in any other provisions of this Act overlooking the immediately succeeding words relating to the computation of income under the head Profits and gains of business or profession . It is, therefore, clear that such disallowance is not warranted in respect of payment of interest allowable, say, against income from property or other sources and much less against interest under section 80V, the deduction of which arises after the computation of both business and total income. Hence, we uphold the order of first appellate authority on this point. 4. This para is not reproduced here as it deals with a minor issue not covered in the synopsis. 5. In the result, the appeal is partly allowed as above.
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1982 (1) TMI 119 - ITAT MADRAS-C
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... ... ..... the end of the previous year of the assessee, being the year ended 31st May 1975 it would be asking the assessee to perform an impossible condition if the fund should have been set up and also approved before the end of the month when the approval shall be at the pleasure of the CIT under the provisions of the Act and in this case itself had taken two years. Hence, we have to keep in mind the bona fides of the assessee who has clearly demonstrated that the fund was in fact created and approved and the most important fact that the provision which was made in account limited to the actuarial valuation, was in fact paid into the fund. Since the provisions of this clause have been amply satisfied by the assessee, we are unable to share the view of the CIT that the deduction of this provisions was in any way erroneous or prejudicial to the interest of the revenue. We therefore, set aside the order of the CIT and restore the assessment order made by the ITO. The appeal is allowed.
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1982 (1) TMI 117 - ITAT MADRAS-C
Charitable Or Religious Trust ... ... ... ... ..... ences of any violation of the conditions or where the amount accumulated is applied for non-charitable purposes or ceases to be accumulated for charitable purposes. Therefore, sub-section (3) does not impinge on the permitted accumulation of 25 per cent under section 11(1) for which there is no time limit and the assessee is at liberty to choose its own time for application of the amount for charitable purposes. The only condition found, therefore, in section 11(1) is that the accumulation should be for charitable or religious purposes and not for any other purposes. We would, therefore, hold that the Commissioner was not justified in taking 100 per cent of the income of each year even assuming that in the facts of this case it cannot be held that the assessee has applied the accumulated income to charitable purposes within the period provided under section 11(3). 16. For all the reasons stated above, we set aside the order of the Commissioner and allow the assessees appeals.
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1982 (1) TMI 115 - ITAT MADRAS-C
Transfer Of Assets, For Benefit Of Spouse Or Minor Child ... ... ... ... ..... But, this is a historical accident as noted above. When the section was originally enacted as pointed out earlier there was no need to exclude a married daughter whereas by reason of the metamorphosis in the section, the content of the expression minor child has assumed significance. In the context of this situation, we find it difficult to enlarge the scope of the expression minor child of such individual to include a daughter who is married to another family and who is under the guardianship of her husband, so as to include income arising to her, in the total income of her father-assessee who has no control over her person or property. We, therefore, accept the contention of the assessee that the income arising to his married daughter, though a minor, cannot be added to his total income under section 64(1)(iii). The ITO is directed to recompute the total income of the assessee by excluding the income arising to the married daughter of the assessee. The appeals are allowed.
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1982 (1) TMI 113 - ITAT MADRAS-B
Approved Gratuity Fund ... ... ... ... ..... dule, it would be improper for the Commissioner, acting under section 263, to assume that the deduction given for the contribution made to such an approved fund was erroneous. The Supreme Court has observed in the case of Gestetner Duplicators (P.) Ltd. v. CIT 1979 117 ITR 1 that--- It would be conducive to judicial discipline and the maintaining of certainty and uniformity in administering the law that the taxing authorities should proceed on the basis that the recognition granted and available for any particular assessment year implies that the provident fund satisfies all the conditions under rule 4 of Part A of the Fourth Schedule to the Act and not sit in judgment over it. This observation applies with equal force to the approval granted to a gratuity fund. For this reason also, the order of the Commissioner cannot be confirmed. We, therefore, set aside his order on this point and restore the allowance granted by the ITO in the original assessment. The appeal is allowed.
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1982 (1) TMI 112 - ITAT MADRAS-B
Capital Or Revenue Receipt ... ... ... ... ..... the argument of the learned departmental representative that accounting practice is necessarily divorced from the requirement of taxation law does not meet the point. It is not that the Supreme Court while accepting the accountancy rule authorised interest paid as a revenue expenditure while allowing the assessee to capitalise the interest during pre-commencement period. It allowed capitalisation only because it was not normal expenditure and it could not be business expenditure before business commenced. Similarly, excess of interest received over interest paid has to be treated as a reduction in project cost only because it is not income in the ordinary sense. Hence, we have no doubt there is no variation between tax treatment and accountancy practice in the present dispute before us especially after the decision of the Supreme Court on the question of capitalisation of interest in Challapalli Sugars Ltd. 11. In the result, the appeal is allowed and the assessment annulled.
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1982 (1) TMI 107 - ITAT MADRAS
Charitable And Religious Trust ... ... ... ... ..... e assessment year 1973-74, the income of the assessee is Rs. 88,120 and it is this income which it has sought to accumulate. No material has been brought to our notice which will show that the identical income for which accumulation was allowed in the hands of the author-trusts was further sought to be accumulated by the assessee-trust. But even if it is so, we must uphold the order of the AAC that the assessee being an independent trust and having fulfilled the requirements for accumulation as per the notice given by it and being otherwise entitled to exemption under section 11 cannot be denied the exemption on the ground that the author-trusts have been allowed to accumulate their income for the past years. No provision of law has been pointed out to us which would support such a claim of the department that in such circumstances the assessee would lose its claim for exemption. We, therefore, reject the objection of the department. 4. In the result, the appeal is dismissed.
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1982 (1) TMI 105 - ITAT JAIPUR
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... ... ..... tion could be done u/s 154. 5. The last question is whether, in the cases other than the four matters in which we have held that s 154 could not have been invoked by the ITO, there was any mistake apparent from the record on the part of the ITO in not mentioning in the orders passed u/s 155 that the interest u/s 215 or 217 or 139(8) was chargeable. The ITO having already charged interest at the stage of the original assessment and there being no waiver of interest we hold that was there was a mistake apparent from the partners in the orders passed u/s 155, which on this point, should have been in conformity with action taken by the ITO at the stage of the original assessments. The ITO having not possessed any jurisdiction to waive interest in the orders passed u/s 155, he committed a mistake apparent from record and rightly resorted to s 154 for rectifying such mistake. 6. In the result, whereas the cross-objection Nos. 137,131,133 and 138 are allowed, the rest are dismissed.
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1982 (1) TMI 104 - ITAT JAIPUR
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... ... ..... to levy the interest for the period from the dates of passing the original order under s. 143 to the date of passing the order under s. 155. Apart from the above authorities, both sides have relied upon a number of other judicial pronouncements. 4. We have given a careful consideration to the rival submissions. From the authorities relied upon by the rival parties, it is clear that the issue is debatable as to what is regular assessment as mentioned in s. 215/217 of the IT Act. Since this is a debatable issue, in our opinion, the ITO had no jurisdiction under s. 154 to charge further interest in view of the decision of the Supreme Court in the case of ITO vs. Volkart Bros. and Ors. (1971) 82 ITR 50 (SC). We, therefore, do not find any jurisdiction to interfere with the orders of the ld. AAC so far as deletion of the interest amount charged for the periods from the date of passing orders under s. 155 is concerned. 5. In the result, all the 9 departmental appeals are dismissed.
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1982 (1) TMI 103 - ITAT JAIPUR
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... ... ..... was levied. The AAC concurred with the ITO. 2. The question is whether the ITO can levy the penalty when no penalty proceedings were initiated at the initial state when the assessment was made u/s 143(1). What follows from the omissions on the part of the ITO from initiating penalty proceedings when the assessment was made u/s 143(1). This question is very crucial in this case, In our opinion, the facts of the case go to show that the ITO impliedly waived the penal action when the order was passed u/s 143(1). Penal action having been impliedly waived, there is no justification for initiating penalty proceedings at the stage when the assessment u/s 143(3) was made. We, therefore, cancel the penalty. 3. In the result, the appeal is allowed.
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1982 (1) TMI 102 - ITAT JAIPUR
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... ... ..... of the Guest House, which was not in self-occupation. The AAC determined the value of the Guest House at Rs. 30,000 and determined the value of the self-occupied portion as on 31st March 1971, meaning thereby, for the asst. yr. 1971-72 at Rs. 2,60,390 and held that the same valuation would be taken for the year under appeal u/s 7(4). We entirely agree with this finding. 2. This disposes of the appeal of the Revenue. 3. In the cross-objection, the assessee raised the simple ground that the AAC erred in supplying a multiple 12 on net maintainable rent, when the Gurgaon property was commercial and let out one. In the circumstances of the case it would be 10 times. No reasons have been given by the AAC to take the multiple 12 times in the impugned order. We find force in the submissions of the assessee that multiple in the instant case can property be reduced to 10 times. 4. In the result, the appeal of the Revenue is dismissed and the cross-objection of the assessee is allowed.
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1982 (1) TMI 101 - ITAT JAIPUR
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... ... ..... al. It is true that sale rate in month of December, 1974 is more proximate in point of time to the closing date of the accounts, but the fact remains that there is nothing on record to show that the rate taken by the assessee to value the closing stock was mala fide or wholly without basis. The rate as obtaining in the month of February, 1975 may not be a correct basis to value the closing stock, but that by itself cannot be a good reason to impose penalty or infer that the rate of Rs. 300 per quintal having been taken by the assessee, was mala fide. For the reasons, we hold that it is not a fit case to sustain the penalty. The penalty is therefore, cancelled. Shri Singhal also raised legal objections that the charge as set out in the assessment order was altered by the ITO in the penalty order and that computation of penalty is not correct. We do not enter into the legal objections as, in our view, penalty is not sustainable on facts. 3. In the result, the appeal is allowed.
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1982 (1) TMI 100 - ITAT JABALPUR
Capital Or Revenue Expenditure ... ... ... ... ..... t year 1976-76 initially the assessee itself proceeded on that basis and claimed deduction for one-tenth of the expenditure only. Later on, in the course of the appeal proceedings, additional ground was raised before the learned Commissioner (Appeals) claiming that the expenditure in question was admissible in full as revenue expenditure. As held already, in our view, the expenditure in question cannot be allowed as revenue expenditure, having been incurred prior to the setting up of the business. Even as capital expenditure, as already stated, it could either be considered under section 35D or it could be added to the initial cost of the plant for grant of depreciation but neither or the two cover the said expenditure. The expenditure is thus dead loss to the assessee and the ITO had rightly disallowed the same. We cancel the order of the learned Commissioner (Appeals) and restore that of the ITO, though for different reasons. 18. In the result the revenue s appeal succeeds.
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1982 (1) TMI 99 - ITAT INDORE
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... ... ..... is further clear that the calculation so determined by the ld. Valuer and adopted by the ld. WTO, was challenged or say objected by the assessee before the ld. AAC of WT. In such a situation the ld. AAC appears to be under an obligation to afford an opportunity to the Valuation Officer of being heard while examining the objections against the said report. No doubt in terms of s. 24(5)(a), the Tribunal also is competent to provide such an opportunity to the ld. Deptl. Valuer, but, we think it proper that since the ld. AAC heard the appeal without providing such an opportunity to the ld. Deptl. Valuer, it would appear to be in the fitness of the thing that the impugned orders be set aside and matters restored to the file of the ld. AAC to determine afresh in accordance with the above observations and comply with the requirements of s. 23(3A) of the WT Act 1957. We direct accordingly. 7. In the result, the assessee rsquo s appeals are treated as allowed for statistical purposes.
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1982 (1) TMI 98 - ITAT INDORE
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... ... ..... e existing facts as brought on record. The partner who has been so assessed, could approach by way of rectification application, and, there therefore, cannot be any question of double taxation. The case laws above, appear to be in the situation where all the facts were available before the ld. ITO. In the present case before us the situation appears to be otherwise. The assessee, therefore, appears to receive no direct support from the ratios in these cases because of the finding of fact recorded by us. 14. In the light of our preceding decision, we are of the considered view that since no genuine firm was brought into existence, the ld. ITO rightly negatived the assessee rsquo s claim. In fact, the entire arrangement appears to the a sham. The ld. AAC correctly confirmed the right action of the ld. ITO in the matter. The impugned order since wants no interference, deserves confirmation, and, we accordingly confirm. 15. In the result, the assessee rsquo s appeal is dismissed.
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1982 (1) TMI 97 - ITAT INDORE
Reassessment, Non-Disclosure Of Primary Facts ... ... ... ... ..... in his possession reason to believe that income has escaped assessment. 18. In the light of our preceding discussions, we are of the considered view that the learned ITO since could not legally assume power under section 147(a), was not justified to initiate the reopening proceedings, and, as such, wrong action of the learned ITO should have been at least negatived by the learned Commissioner (Appeals). Since the learned Commissioner. (Appeals) failed to rectify the rectifiable mistake, the impugned order on this point is erroneous to that extent. We, therefore, set aside the same. 19. About the contention of the learned assessee s representative that the loss in the similar circumstances was disallowed by the revenue authorities during the subsequent assessment year, we do not want to comment since the same pertains to the merit of the matter whereas we have found that the very proceedings of reopening were not justified. 20. In the result, the assessee s appeal is allowed.
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1982 (1) TMI 96 - ITAT INDORE
Return Of Income ... ... ... ... ..... n the part of the assessee. The mere submission of the revised return would not absolve the assessee from the penalty proceedings. In the instant case before us, as discussed earlier, no omission, error or wrong statement has been shown to have occurred in the original return. Thus, there was no bonafide mistake, error or inadvertence on the part of the assessee as claimed to have been committed by the assessee in the original return. Under such circumstances, the revised return filed in the instant case, is not a return filed by the assessee as provided by law on the point. We do not find any substance in the appeal by the assessee. Having regard to the facts of the case and the submissions made before us and in view of the decisions of the different High Courts, we are of the opinion that the order of the AAC has been based on adequate grounds which are required to be sustained, which we hereby do and no interference is called for. 8. In the result, the appeal is dismissed.
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