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1995 (11) TMI 96
Writ Jurisdiction - Existence of alternative remedy ... ... ... ... ..... period of thirty (30) days from today, in accordance with the provisions contained in the Central Excises and Salt Act, the Appellate Tribunal shall decide the appeal on merits and in accordance with law, without going into the question of limitation. We also further direct the Collector (Appeals) in the event the appellant files an appeal against the order passed by the Assistant Collector of Central Excise, Madurai, dated 26-6-1992 in C. No. V/59/30/14/91 within a period of thirty (30) days from today, in accordance with the provisions contained in the Central Excises and Salt Act, to decide the appeal on merits and in accordance with law, without going into the question of limitation. We also further make it clear that our direction to consider the appeals on merits and in accordance with law shall not be construed as exempting the appellant from complying with the provisions contained in Section 35-F of the Central Excises and Salt Act. There will be no order as to costs.
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1995 (11) TMI 95
Demand - Limitation ... ... ... ... ..... is question. 2.The further contention of the learned counsel for the assessee was that when the tribunal was remitting the entire matter, it ought not to have foreclosed its contention based on the proviso to Section 11A of the Act. We do not propose to go into this contention. Since we are remitting the matter to the tribunal on the question whether the Collector was right in concluding that the assessee was guilty of suppression and wilful mis-statement, the further order that the Tribunal may have to pass would be dependent upon the conclusion that it may reach on this issue. 3.We allow this appeal and remit the matter to the tribunal on the aforementioned short question. Since the issue is short, we hope the tribunal will be able to give priority to the matter and dispose it of at an early date so that the matter which is remitted to the Collector may not get delayed. 4.We were not called upon and do not interfere with any other part of the order. 5.No order as to costs.
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1995 (11) TMI 93
Stay/Dispensation of pre-deposit - Speaking order ... ... ... ... ..... aid to have adverted to such aspects. As noticed earlier, consideration at this stage cannot be expected to be of a more detailed nature than the one that has been undertaken by the Tribunal. In my view, the consideration by the Tribunal cannot be said to be vitiated for any of the grounds urged by the learned counsel before me. 9.At the same time, keeping in view the difficulties expressed and the over all aspects of the matter, I am of the view that interest of justice will be better served if instead of the deposit of Rs. 1,75,00,000/- the quantum is reduced to Rs. 1,00,00,000/- (Rs. One Crore) and the petitioner is directed to furnish a Bank Guarantee for the balance of the duty within four weeks from this date and the Tribunal shall, on complying with the conditions as above, proceed to consider and dispose of the appeal. To the extent indicated above, the order of the Tribunal shall stand modified and in other respects, the writ petition shall stand dismissed. No costs.
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1995 (11) TMI 92
Addition To Income, High Denomination Notes, Income From Undisclosed Sources, Legal Representative, Question Of Law, Reference Application
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1995 (11) TMI 91
Finding Of Fact, Question Of Law ... ... ... ... ..... orily or not is essentially a question of fact. The Wealth-tax Commissioner was satisfied on the facts explained by the assessee and there was no question of concealment and the same was confirmed by the Tribunal. This court has held in order in M. C. C. No. 205 of 1985 that no question of law arises and adopting the same reasoning, we hold that no question of law arises in the present cases. The Division Bench of this court in M. C. C. No. 205 of 1985 observed as under We think the Tribunal has rightly held that it had essentially recorded a finding of fact on the basis of which the provisions of section 18(1)(c) of the Act could not be said to have been attracted. No question of law, therefore, can be said to arise out of the appellate order of the Tribunal. We are, therefore, constrained to reject this application. Hence, all these reference applications for calling reference from the Revenue are rejected in terms of the aforesaid order passed in M. C. C. No. 205 of 1985.
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1995 (11) TMI 90
Issues involved: The judgment involves a challenge against an order passed by the Income-tax Appellate Tribunal regarding the rejection of miscellaneous applications made by the assessee/petitioner under section 254(2) of the Income-tax Act, 1961, specifically related to an alleged admission made by the petitioner's counsel regarding the installation of EDP machines.
Details of the Judgment:
Alleged Admission Issue: The Tribunal rejected the miscellaneous applications based on the alleged admission by the petitioner's counsel regarding the installation of EDP machines. The Tribunal's decision was criticized for overlooking crucial evidence, including the uncontroverted statement in the affidavit by the petitioner's counsel. The High Court emphasized the importance of a conscientious procedure in affirming such admissions, highlighting that a concession takes away valuable rights and must not be decided perfunctorily. The Court found the Tribunal's approach resulted in a miscarriage of justice for the petitioner.
Legal Technical Objections: The High Court addressed two technical objections raised by the Department. Firstly, it dismissed the argument that the petitioner was not entitled to relief under section 254(2) due to the alleged error not being apparent on the face of the records. The Court cited precedents emphasizing that quoting a wrong section should not deprive a party of deserved relief. Secondly, the objection regarding the jurisdiction of the Court to grant relief under Article 227 was refuted, highlighting the supervisory jurisdiction to prevent grave miscarriages of justice. The Court found the situation in the present case warranted intervention to prevent potential injustice.
Final Decision: In conclusion, the High Court allowed the revisional application, setting aside the Tribunal's order and remanding the miscellaneous applications for reconsideration. The Tribunal was directed to record findings on the alleged admission while keeping all other points open for further legal recourse. The judgment concluded with no order as to costs, and the concurring opinion of Justice B. M. Mitra was noted.
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1995 (11) TMI 89
Business Income, Question Of Law, Sales Tax Refund ... ... ... ... ..... in the income for the assessment year 1983-84. Even this attempt failed. The Tribunal was, therefore, requested to refer the questions. The questions are as to the attractability of section 41(1) of the Act and as to the question of limitation during which the MPEB was required to receive the amount from the assessee. We are of the opinion that the questions as proposed are questions of law which are required to be referred. We are thus not satisfied that the refusal was justified. We, therefore, require the Tribunal to state the case and refer the questions as noted above for the opinion of this court in terms of section 256(2) of the Act. A copy of this order shall be transmitted to the Tribunal under the seal of the court and the signature of the Registrar for compliance within six months from the receipt of the copy of the order. This reference application is accordingly allowed, but without any orders as to costs. Counsel fee on each side shall be Rs. 700, if certified.
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1995 (11) TMI 88
Issues Involved: The issue involves the cancellation of an order passed by the Commissioner of Income-tax u/s 263 of the Income-tax Act, 1961, and the subsequent appeal by the assessee against this order, leading to a reference to the High Court by the Tribunal.
Jurisdiction of Commissioner u/s 263: The Commissioner has the revisional jurisdiction u/s 263 to examine any record of proceedings under the Act and pass orders enhancing, modifying, or cancelling assessments if deemed prejudicial to the Revenue's interests. The scope of the Commissioner's power has been clarified to include all records under the Act, allowing retrospective examination for prejudicial impact.
Principles of Natural Justice: While the Commissioner has the authority to revise orders, adherence to principles of natural justice is crucial. In this case, the Tribunal found a serious breach of natural justice as the assessee was not provided with a report from a handwriting expert, crucial to the case. The Tribunal emphasized the necessity of affording the assessee a fair opportunity to respond to allegations before revising orders.
Observations by the Tribunal: The Tribunal noted that the Commissioner's reliance on a handwriting expert's report without providing it to the assessee was a violation of natural justice. The failure to specify which partner's signature was suspected to be forged and the lack of proper opportunity for the assessee to respond further undermined the validity of the Commissioner's actions.
Conclusion: The High Court ruled in favor of the assessee, highlighting the Commissioner's failure to adhere to principles of natural justice in revising the order u/s 263. The Court emphasized the importance of providing the assessee with necessary information and opportunities to respond, ultimately invalidating the Commissioner's order and upholding the Tribunal's decision.
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1995 (11) TMI 87
Question Of Law ... ... ... ... ..... essee was required to be given the benefit of such payments made in exceptional circumstances. Law lives on logic and as such illogicality, resting on technical view, is to be spurned. This finding of fact, not shown to be perverse or perishable, reached by the Tribunal did not, as held in CIT v. Ashoka Marketing Ltd. 1976 103 ITR 543 (SC) and in CIT v. Kotrika Venkataswamy and Sons 1971 79 ITR 499 (SC), give any rise to the question of law and as such the Tribunal rightly rejected the reference application. Recourse to section 256(2) of the Income-tax Act is thus not justified and is acarpous. In the circumstances, we find that the finding of the Tribunal is based on an appreciation of facts and does not give any rise to the question of law. We are, thus, satisfied with the correctness of the view taken by the Appellate Tribunal. We thus find that this application deserves to be rejected summarily. Accordingly, we reject this application, but without any orders as to costs.
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1995 (11) TMI 86
Interest On Refund ... ... ... ... ..... ion is not now open on the principle of finality to a given situation. Looking to the nature of payment as discussed above, it is seen that the amount was kept in deposit for appropriation and in that sense could not be said to have been the amount liable to be considered for interest, because the amount continued to be in deposit till February 17, 1989, as seen above. The reasoning that till February 17, 1989, although the amount was deposited earlier, the Revenue had no control and as such the amount could not be said to be the amount of the Revenue earlier. It was an amount deposited by the petitioner lying in his personal account. Taking into consideration, the above facts, in my judgment there is no error in the matter of award of interest from February 17, 1989, and not from July 6, 1987. On facts therefore, it is not possible to exercise jurisdiction under article 226 of the Constitution of India. The petition stands dismissed leaving the parties to suffer their costs.
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1995 (11) TMI 85
House Property ... ... ... ... ..... erwise of the criminal proceedings pending against them. Liberty is granted to them to raise all their contentions before the trial court. They may even file an application before the trial court inviting a decision on the points raised by them. The decision in K. M. Mathew v. State of Kerala 1992 1 KLT 1 (SC) can also be pressed into service by the petitioners if they want a consideration of the points raised by them for dropping the criminal proceedings. If the petitioners file application with a prayer for their discharge on the various grounds mentioned by them in the criminal miscellaneous cases, the trial court will consider the same and pass orders thereon as expeditiously as possible, at any rate, within two months from the date of filing such application. The trial court may not proceed further in the complaints without taking a decision on the application to be filed by the petitioners for the above purpose. The criminal miscellaneous cases are disposed of as above.
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1995 (11) TMI 84
Change In Constitution Of Firm ... ... ... ... ..... tion raised by the Revenue on the basis of sub-section (3A) of section 176 of the Income-tax Act. Sub-section (3A) provides that Where any business is discontinued in any year, any sum received after the discontinuance shall be deemed to be the income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the total income of the person who carried on the business had such sum been received before such discontinuance . Since we are not concerned with the assessment of the former firm in this case, sub-section (3A) of section 176 has no application here. In view of the above, we answer questions Nos. 1, 3 and 4 in the affirmative in favour of the assessee and against the Revenue, question No. 2 is answered in the negative in favour of the Revenue and against the assessee. A copy of this judgment under seal of this court and the signature of the Registrar to be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.
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1995 (11) TMI 83
Alternate Remedy, Depreciation At Higher Rate, Grant Of Depreciation, Income Tax Authorities, Motor Vehicles, Question Of Fact, Rate Of Depreciation, Transport Business
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1995 (11) TMI 82
Issues Involved: Challenge to the validity of assessment order and demand notice under the Income-tax Act, 1961, specifically regarding the levy of interest, and the vires of sections 234A and 234B of the Act.
Validity of Sections 234A and 234B: The provisions of sections 234A and 234B were upheld as not being penal in nature but rather serving as compensatory measures for default in filing returns or paying advance tax. The levy of interest was deemed justified as a means to offset revenue loss due to non-payment by the assessee.
Levy of Interest on Assessed Income: The question arose whether interest on tax assessed under section 144 after filing the return under section 139 is legally sustainable. The petitioner argued that interest should only be levied on tax payable on the returned income, not on the assessed income. Reference was made to a Supreme Court decision in support of this argument.
Appeal and Assessment Process: The petitioner appealed against the assessment order, challenging the inclusion of "entrance fee" in taxable income. The assessment was conducted under section 144 after the petitioner failed to file a revised return under section 139(4). The assessment order did not mention the levy of interest, leading to a dispute over the interest amount in the demand notice.
Legal Analysis and Conclusion: The judgment analyzed the provisions of sections 234A and 234B in detail, emphasizing that interest arises from delayed or non-filing of returns or payment of advance tax. It was concluded that in this case, the petitioner did not commit default warranting interest payment, as the return was filed on time and specific disputes were raised regarding the taxable income. The court ruled in favor of the petitioner, quashing the demand notice for interest payment.
Separate Judgment by Pramod Kumar Sarin: Justice Pramod Kumar Sarin concurred with the decision, agreeing to quash the notice of demand for interest payment.
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1995 (11) TMI 81
Debt Owed, Net Wealth, Tax Liability, Voluntary Disclosure ... ... ... ... ..... ses of this sub-section, record (shall include and shall be deemed always to have included) all records relating to any proceeding under this Act available at the time of examination by the Commissioner. As we have come to the conclusion that the revised return for 1975-76 filed on July 12, 1979, and the valuation report for the property in question estimating its value as on December 31, 1974, were not at all part of the record of proceedings for the assessment year 1974-75, wherein the assessment order sought to be revised had been passed by the Wealth-tax Officer. Further, the question of applicability of the Explanation giving an extended meaning to the word record to include the record existing on the date of passing of the order by the Commissioner, does not remain relevant. As a result of the aforesaid discussion, we answer the question referred to us in affirmative, that is to say, in favour of the assessee and against the Revenue. There shall be no order as to costs.
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1995 (11) TMI 80
Development Allowance, Weighted Deduction ... ... ... ... ..... in respect of insurance amount paid to the Export Credit Guarantee Corporation is not correct. In fact, on this issue, a special leave petition had been filed in the Supreme Court in the case of CIT v. Orient Co. (P.) Ltd. (F. No. 270/155/80-ITJ). The case of the assessee was decided by the Tribunal on the basis of the judgment of the Special Bench of the Tribunal, Bombay, in the case of J. Ramchandra and Co. (J. Hemchand and Co. (?)). The Central Board of Direct Taxes, looking to the conflicting views taken by the various High Courts, issued the abovenoted instructions clarifying the earlier circulars. In this view of the matter, we are of the opinion that the case of the assessee requires reconsideration by the Tribunal in the light of Instruction No. 1441 issued by the Central Board of Direct Taxes. The reference is, therefore, returned unanswered to the Tribunal with the direction that the Tribunal should decide the matter afresh as per the aforesaid Instruction No. 1441.
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1995 (11) TMI 79
House Property ... ... ... ... ..... it cannot be said that the compounding fee was paid to cover the risk of damage or destruction. A statutory provision, particularly, a provision of the Income-tax Act should be read as far as possible confining to the plain language without importing any foreign words and subtracting any word therefrom. On a strict interpretation as it should be section 24(1)(ii) simply allows deduction of an amount of any premium paid to insure property against risk of damage or destruction. Payment of compounding fee is surely not in the nature of the deductions permissible by section 24(1)(ii) of the Act. For the reasons, we do not agree with the view taken by the Appellate Tribunal that the amount is deductible under section 24(1)(ii). The above question is, therefore, answered in the negative, that is, in favour of the Revenue and against the assessee. The records of this case be sent to the Appellate Tribunal within fifteen days to enable it to pass an order conformably to our decision.
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1995 (11) TMI 78
Issues involved: The judgment addresses the questions of whether the 'exchange loss' due to fluctuations in currency rates is a real loss and allowable as a deduction in computing income.
Exchange Loss Deduction: The assessee, a banking company, claimed deductions for exchange losses during the assessment years 1973-74, 1974-75, and 1975-76. The Income-tax Officer initially disallowed the claim, but the Commissioner (Appeals) allowed it after considering that the loss pertained to current liabilities and was a result of fluctuations in exchange rates. The Tribunal upheld this decision, noting that the loss was due to exchange rate fluctuations and not devaluation, following precedents and principles established by the Supreme Court and previous court decisions.
Legal Precedents: The court referred to the Supreme Court's decision in Sutlej Cotton Mills Ltd. v. CIT [1979] 116 ITR 1, which established that profit or loss from foreign currency appreciation or depreciation is trading profit or loss if held as part of trading assets. The court also cited CIT v. V. S. Dempo and Co. Pvt. Ltd. [1994] 206 ITR 291, summarizing key principles regarding the nature of losses arising from foreign currency conversion, distinguishing between revenue and capital losses based on the asset's nature at the time of devaluation.
Decision and Rationale: Applying the principles from the legal precedents to the case, the court concluded that the exchange loss claimed by the assessee was allowable as a deduction since the foreign currencies were considered stock-in-trade. Therefore, both questions regarding the exchange loss deduction were answered in favor of the assessee and against the Revenue. No costs were awarded in this case.
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1995 (11) TMI 77
In Part, Partnership Deed ... ... ... ... ..... stipulation that the firm will continue, notwithstanding the death of one of its partners. This being so, the Revenue failed to establish, either in fact or in law, that the old firm continued to exist notwithstanding the death of one of its partners. A clear finding being recorded by the Appellate Assistant Commissioner that no business was continued by the firm which existed up to August 14, 1975, on three days, the Appellate Tribunal was right in drawing the inference that the old firm came to an end upon the death of one of its partners on August 14, 1975, continued the business for the subsequent period (sic) and the contention of the Revenue that it is a case of change in the constitution of the firm within the meaning of section 187 of the Act cannot be accepted. For the reasons, we answer the above question in the affirmative. The records of this case be sent down to the Appellate Tribunal within fifteen days to enable it to pass an order conformably to our decision.
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1995 (11) TMI 76
Business Expenditure, Cash System, Deduction Of Interest, Mercantile System, Question Of Law ... ... ... ... ..... of the Tribunal is based on appreciation of facts and does not give rise to any question of law. He placed reliance on CIT v. Kesoram Industries and Cotton Mills Ltd. 1993 204 ITR 154 (Cal). In our view, it is a pure question of finding of fact. This finding of fact, not shown to be perverse or perishable, reached by the Tribunal did not give, as held in CIT v. Ashoka Marketing Ltd. 1976 103 ITR 543 (SC) and in CIT v. Kotrika Venkataswamy and Sons 1971 79 ITR 499 (SC), rise to any question of law and as such the Tribunal rightly rejected the reference application. Recourse to section 256(2) of the Income-tax Act is thus, not justified and is acarpous. We, therefore, hold that the order of the Tribunal is based on proper application of facts and it does not give rise to any question of law as proposed. Accordingly, we find that this reference is without merit and deserves fate of dismissal. Accordingly, we dismiss this reference application but without any orders as to costs.
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