1991 (1) TMI 123 - HC - Income Tax

Balancing Allowance, Business Expenditure, Capital Or Revenue Expenditure, Income Tax Act, Income Tax Proceedings, Salary To Employee, Special Deduction, Surtax Assessment

Summary

Issues:
1. Review petition seeking to file additional evidence in relation to a property forfeiture order.
2. Jurisdiction of the Tribunal to review an order based on existing evidence or allowing fresh evidence under Section 20 of the Act.
3. Justification of a four percent accretion towards capital accumulation and the review of the order based on this ground.
4. Prayer for payment of determined amount in three instalments and consequences of default.

Analysis:

1. The case involved a review petition filed by Vijay Sankar Singh challenging the order of the Competent Authority under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. The petitioner sought to introduce documentary evidence regarding the initial capital of Rs. 5,000 and permission to lead additional evidence in the matter.

2. The Tribunal's order dated September 25, 1990, concluded that the Competent Authority was justified in forfeiting the appellant's interest in a firm as 'illegally acquired property.' The petitioner contended that the Tribunal should review the order based on Section 20 of the Act, allowing rectification of any apparent mistake on the record. However, the Court held that the Tribunal lacked jurisdiction to pass a fresh order based on existing or additional evidence, as it did not fall within the scope of rectifying mistakes under Section 20.

3. Another argument raised was regarding the four percent accretion towards capital accumulation, which the petitioner claimed was not justified. The Tribunal's decision on the capital balance and its attribution to the unexplained initial capital was challenged. The Court, after detailed analysis, upheld the Tribunal's decision and dismissed the review petition, emphasizing that the decision was not a rectifiable mistake under Section 20 of the Act.

4. Lastly, the petitioner requested permission to pay the determined amount in three instalments. The Court allowed this request, specifying the timeline for payment and warning that default in any instalment payment would result in the revocation of the order allowing installment payments, ensuring compliance with the payment schedule.

In conclusion, the Court dismissed the review petitions, clarified the jurisdiction of the Tribunal regarding review orders, upheld the decision on capital accumulation, and allowed payment in three instalments with consequences for default.