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Showing 301 to 310 of 310 Records
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1987 (2) TMI 10
The High Court of Kerala ruled that one-fourth of the income set aside for trust properties is not exempt under section 11 of the Income Tax Act. The court declined to answer a question regarding the allocation for property augmentation. The judgment was in favor of the Revenue and parties were directed to bear their own costs.
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1987 (2) TMI 9
Issues:
1. Interpretation of penalty under section 271(1)(c) of the Income-tax Act, 1961.
2. Assessment of evidence regarding concealment of income by the assessee.
3. Validity of findings and conclusions reached by the Income-tax Appellate Tribunal.
4. Admissibility and evaluation of evidence in penalty proceedings.
Analysis:
The High Court of Andhra Pradesh deliberated on an Income-tax Case where the assessee sought direction under section 256(2) of the Income-tax Act, 1961, for the Tribunal to state the case on specific questions related to the levy of penalty under section 271(1)(c). The case involved the concealment of income by the assessee through the sale of prize-winning raffle tickets. The Appellate Tribunal found that the assessee had concealed income and imposed a penalty, which was later reduced. The assessee challenged the findings, contending that they were based on no evidence.
The Court examined the evidence presented during the penalty proceedings, including statements of witnesses and findings from the assessment stage. It was argued that the findings were not supported by sufficient evidence. However, the Court held that the evidence on record, including witness statements and the conduct of the assessee, constituted legal evidence. The Court cited precedents to emphasize that findings from assessment proceedings can be considered in penalty proceedings and that false explanations offered by the assessee are relevant circumstances.
The Court rejected the argument that the evidence recorded by the Inspecting Assistant Commissioner was insufficient, stating that strict rules of evidence under the Evidence Act do not apply to penalty proceedings. The Court highlighted that statements recorded by enforcement officers in other legal contexts have been deemed admissible as evidence. Therefore, the Court concluded that the findings of the Tribunal were based on evidence on record and supported by reasoning, dismissing the application and upholding the penalty imposed on the assessee.
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1987 (2) TMI 8
Issues:
1. Interpretation of provisions of the Gift-tax Act regarding the definition of "gift" and relevant terms.
2. Determination of whether the transfer of swords to princes under a trust deed constitutes a gift under the Act.
3. Analysis of the legal ownership of the swords by the trustees and the princes.
4. Examination of the trustees' role as donees and their ability to transfer the property to the princes without consideration.
Analysis:
The judgment delivered by the Andhra Pradesh High Court addressed the interpretation of the Gift-tax Act in a case involving the transfer of swords to princes under a trust deed. The court considered the definition of "gift" under the Act, emphasizing that it involves the voluntary transfer of property without consideration. The court analyzed relevant terms such as "donor," "donee," and "property" to determine the applicability of gift-tax provisions.
Regarding the transfer of swords to the princes, the court examined the trust deed executed by H.E.H. the Nizam, which specified that the swords were to be handed over as wedding gifts to the princes on their respective marriage dates. The court noted that the trustees acted as agents for the princes and held the swords for their benefit. The court concluded that the princes became the absolute owners of the swords upon their marriage, and the trustees' role was fiduciary in nature.
The court also analyzed clauses in the trust deed related to the gift of swords, highlighting that the settlor did not reserve the power to alter the terms of the trust. The court determined that the second trust deed expressing a wish for the princes to return the swords did not affect their absolute ownership established under the first trust deed. The court emphasized that the trustees had no legal ownership over the swords as donors and could not transfer the property to the princes without consideration.
In conclusion, the court held that the transfer of swords to the princes did not constitute a gift under the Gift-tax Act. It ruled in favor of the assessee, stating that there was no gift as defined under the Act, and the provisions of section 4(1)(a) or 4(1)(c) did not apply to the facts of the case. As a result, the court decided the reference against the Revenue and in favor of the assessee, with no order as to costs.
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1987 (2) TMI 7
Issues:
1. Allowability of loss due to exchange fluctuations in purchasing machinery from abroad in computing income.
2. Deduction of surtax payable under the Companies (Profits) Surtax Act as business expenditure or expenditure incidental to carrying on business.
Analysis:
*Issue 1:*
The assessee claimed a deduction of Rs. 10,485 incurred due to exchange fluctuations in purchasing machinery from abroad as a revenue expenditure. However, the Income-tax Officer, the appeal tribunal, and the High Court held that the amount expended to acquire assets from a foreign country for business purposes is capital in nature and cannot be treated as revenue expenditure. Section 43A of the Income-tax Act specifically addresses fluctuation in exchange rates concerning the acquisition of assets, indicating that such amounts are to be considered as capital expenditure. The court cited precedents like CIT v. Tata Locomotive and Engineering Co. Ltd. and CIT v. South India Viscose Ltd., supporting the capital nature of such expenses. Consequently, the deduction was disallowed, ruling in favor of the Revenue.
*Issue 2:*
Regarding the deduction of surtax payable under the Companies (Profits) Surtax Act, the court referred to a previous decision in Vazir Sultan Tobacco Co. Ltd. v. CIT, where it was held that such surtax payments cannot be claimed as business expenditure under section 37 of the Income-tax Act or as expenditure incidental to carrying on business under section 28. The court answered this question against the assessee and in favor of the Revenue. The court also granted leave to the assessee to appeal to the Supreme Court on this matter, as seen in similar cases like T. T. Pvt. Ltd. v. CIT and Amco Batteries Ltd. v. CIT.
In conclusion, the High Court of Andhra Pradesh held that the loss due to exchange fluctuations in purchasing machinery from abroad cannot be claimed as a revenue expenditure and that surtax payable under the Companies (Profits) Surtax Act is not deductible as business expenditure. The judgment was delivered by K. Ramaswamy J., with reference to relevant sections of the Income-tax Act and established case law.
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1987 (2) TMI 6
The Revenue's application under section 256(2) of the Income-tax Act was rejected by the High Court of Rajasthan. The Tribunal's decision to rectify the assessment order for the year 1972-73 was upheld based on facts and the Supreme Court decision in Mahendra Mills Ltd. v. P. B. Desai, AAC [1975] 99 ITR 135. The High Court found no question of law to refer to this court. The application was rejected.
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1987 (2) TMI 5
The High Court of Karnataka ruled in favor of the assessee, allowing depreciation on roads and drains at the rates applicable to buildings. The decision was based on a previous court pronouncement. The reference was disposed of with no costs.
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1987 (2) TMI 4
The High Court of Kerala ruled in favor of the Revenue regarding the valuation of rubber trees for computing capital gains. The court declined to answer a question related to considering only the wood content of the trees. However, the court ruled in favor of the assessee against the Revenue regarding the tax on capital gains from the sale of rubber estate. Each party is directed to bear their respective costs.
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1987 (2) TMI 3
Whether Tribunal was right in holding that the income from interest which had accrued to the respondent on the compensation payable to him in view of the acquisition of land belonging to him for the assessment years 1955-56 and 1956-57 should be spread over the respective years to the extent to which it could be deemed to have accrued in those years - mercantile system of account was the basis on which the interest income accrued, the HC was right in answering the question in assessee's favour
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1987 (2) TMI 2
Having regard to the facts that the organisational set up under the distributorship agreement was to endure for seven years and upon the expiry of the period, the assessee had no relationship with the organisation and that the period of agreement between the assessee and distributors was contemporaneous with the agreement between the assessee and Charles Walker under which the assessee became entitled to use the registered trade marks, it must be considered to be a revenue expenditure
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1987 (2) TMI 1
Gifts made of the funds with a company - neither company had funds on that day, nor did it have overdraft facility with any bank - entries in the books of account could not effectuate gifts - hence gift is not valid - revenue's appeal is allowed
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