|
Advanced Search Options
Case Laws
Showing 181 to 200 of 274 Records
-
1989 (1) TMI 94
Issues involved: The judgment addresses whether the expenditure incurred by the assessee on modernizing its machinery by replacing worn out parts is allowable as revenue expenditure for the assessment years 1974-75, 1978-79, and 1979-80.
Summary:
The High Court of Kerala considered three cases where the Revenue appealed against the assessee claiming expenditure on modernizing machinery as revenue expenditure. The assessing authority viewed the expenditure as capital due to enduring benefit, but the Appellate Assistant Commissioner allowed the claim based on a Supreme Court decision. The Commissioner of Income-tax (Appeals) also upheld the claim. The Revenue appealed to the Tribunal, which affirmed the decision. The Revenue sought to refer the question to the court, but the Tribunal declined. The court found that the expenditure was for replacing old parts to ensure efficient functioning, not for creating new assets, and thus held it as revenue expenditure, in line with the Supreme Court decision. The court concluded that no referable question of law arose, and dismissed the petitions.
-
1989 (1) TMI 93
Issues: Assessment of interest credited to the interest suspense account under the Income-tax Act and deduction under section 36(1)(viii) on gross total income before relief deduction.
Analysis:
The High Court of Kerala dealt with two main issues in this judgment. Firstly, the question of whether the interest credited to the interest suspense account of the corporation could be taxed under the Income-tax Act. The Appellate Tribunal had previously remitted this matter to the Income-tax Officer for further investigation based on a Circular of the Central Board of Direct Taxes. The High Court concluded that there was no concluded decision on this matter yet and that it required factual investigation and application of relevant legal provisions. Therefore, the court declined to direct the Appellate Tribunal to refer this question for its decision.
Secondly, the issue of whether the deduction under section 36(1)(viii) should be given on the gross total income before deducting the relief was considered. The Appellate Tribunal had already directed a similar question to be referred for the earlier assessment year. The High Court found that this question did arise from the appellate order and directed the Appellate Tribunal to refer this question for its decision. The specific question formulated was whether the deduction under section 36(1)(viii) should be given on the gross total income before deducting the relief.
In conclusion, the High Court disposed of the original petitions based on the above analysis, declining to refer the first question regarding the taxation of interest credited to the suspense account and directing the Appellate Tribunal to refer the second question concerning the deduction under section 36(1)(viii) for its decision.
-
1989 (1) TMI 92
Issues:
1. Interpretation of development allowance reserve inclusion in capital computation.
2. Exclusion of entire dividend income from income assessed under rule 1 (viii) of the First Schedule.
Analysis:
The judgment pertains to surtax assessment orders for the years 1977-78 and 1978-79 where the Revenue, the petitioner, contested the inclusion of the entire development allowance reserve and the exclusion of only 40% of the dividend income by the Income-tax Officer. The Commissioner of Income-tax (Appeals) and the Appellate Tribunal held that the entire development allowance reserve and the entire dividend income should be included and excluded, respectively, based on previous decisions. The Revenue sought to refer questions of law to the court regarding these issues. The court noted that the Appellate Tribunal did not provide a clear finding on the development allowance reserve issue, merely referencing a previous case. The court found this to be a referable question of law. Additionally, the court highlighted the impact of section 80AA and a Supreme Court decision on the exclusion of dividend income, deeming it a legal question as well. Consequently, the court directed the Income-tax Appellate Tribunal to refer both questions for decision within three months.
In analyzing the first issue, the court observed that the Appellate Tribunal did not offer a specific finding on the development allowance reserve inclusion in capital computation, merely citing a previous case. The court found this lack of a definite finding as a basis for considering it a referable question of law. The court emphasized the need for a clear determination on whether any part of the development allowance reserve had been allowed as a deduction in previous years and if any abatement was required. This lack of clarity led the court to direct the Appellate Tribunal to refer the question for decision.
Regarding the second issue, the court delved into the impact of section 80AA, introduced in the Income-tax Act with retrospective effect from April 1, 1968, and a Supreme Court decision on the exclusion of dividend income. The court highlighted the need to consider these legal aspects in determining whether the entire dividend income should be excluded from the income assessed under rule 1 (viii) of the First Schedule. Given the legal complexities and implications of these provisions, the court deemed it necessary to refer this question of law to the Appellate Tribunal for further examination and decision.
In conclusion, the court allowed the original petitions, directing the Income-tax Appellate Tribunal to refer the legal questions raised by the Revenue regarding the development allowance reserve inclusion in capital computation and the exclusion of dividend income for decision within three months. The judgment underscores the importance of clear findings and legal considerations in tax assessment matters, ensuring proper interpretation and application of relevant provisions.
-
1989 (1) TMI 91
Issues:
1. Interpretation of Income-tax Act, 1961 regarding rectification of assessment orders by the Income-tax Officer without a rectification order from the Appellate Assistant Commissioner.
Analysis:
The High Court of Madhya Pradesh was presented with an application under section 256(1) of the Income-tax Act, 1961, by the Income-tax Appellate Tribunal, Indore Bench, Indore. The central question for the court's opinion was whether the Income-tax Officer was justified in revising the assessment for the year 1973-74 without a rectification order from the Appellate Assistant Commissioner, in light of the Tribunal's order for the assessment year 1972-73. The facts revealed that an addition was made to the income of the assessee for the assessment year 1972-73, which was confirmed on appeal. However, no corresponding increase was made in the opening stock for the subsequent year 1973-74, despite the earlier addition. The Appellate Assistant Commissioner directed the necessary adjustment in the opening stock for 1973-74. Subsequently, the Tribunal directed the deletion of the earlier addition for 1972-73, leading the Income-tax Officer to rectify the order for 1973-74 without a rectification order from the Appellate Assistant Commissioner.
The court analyzed the jurisdiction of the Income-tax Officer to rectify orders and emphasized that while the Officer could rectify his own orders under section 154 of the Act, rectifying an order from a higher authority was beyond his jurisdiction. The court held that the Income-tax Officer had no power to rectify the Appellate Assistant Commissioner's order, even if it became erroneous in light of the Tribunal's order for the previous year. The court highlighted that only the Appellate Assistant Commissioner could rectify their own order, not the Income-tax Officer. Therefore, the Tribunal's decision that the Officer was justified in revising the assessment for 1973-74 without a rectification order from the Appellate Assistant Commissioner was deemed incorrect.
In conclusion, the court answered the question in the negative, favoring the assessee. The court held that the Income-tax Officer lacked jurisdiction to rectify the Appellate Assistant Commissioner's order, and therefore, the revision of the assessment for 1973-74 without a rectification order was not justified. The parties were directed to bear their own costs for the reference.
-
1989 (1) TMI 90
Issues:
Assessment of kist and interest for the year 1982-83, Disallowance by Income-tax Officer, Appeal by Commissioner of Income-tax (Appeals), Further appeal by Appellate Tribunal, Application under section 256(1) of the Income-tax Act, Original petition by Revenue under section 256(2) of the Act, Questions raised regarding liability and deductions, System of accounting followed by the assessee, Applicability of previous court decisions.
Analysis:
The case involves the assessment of kist and interest for the year 1982-83, where the Revenue filed an application under section 256(1) of the Income-tax Act to refer questions of law for the decision of the court. The Appellate Tribunal had allowed the entire amount of Rs. 14,79,808 as a deduction, which was disputed by the Revenue. The Tribunal referred to the decision in Issac's case and the Supreme Court's decision in Kedarnath Jute Manufacturing Co. Ltd. v. CIT, stating that the liability to pay kist and interest was not obliterated by the previous court's judgment. The Tribunal held that the liability existed on March 31, 1982, and thus allowed the deduction.
The fundamental issue in the case revolves around the system of accounting followed by the assessee. The court noted that there was no mention of the accounting system being "mercantile" in any of the previous orders. Without a clear finding on the accounting system, the applicability of the Supreme Court's decision in Kedarnath Jute Manufacturing Co.'s case could not be determined. The impact of the previous court's decision on the liability accrued also needed to be examined properly, which was lacking in the previous assessments.
The court found that questions raised by the Revenue regarding the liability and deductions did arise from the Tribunal's order and directed the Tribunal to refer these questions for the court's decision. However, a hypothetical and legal question raised by the Revenue was deemed non-referable as it did not pertain to a legal decision. The court allowed the original petition to the extent of referring specific questions for decision while dismissing the non-referable question.
This judgment highlights the importance of a clear understanding of the accounting system followed by the assessee and the impact of previous court decisions on liabilities and deductions for accurate assessment under the Income-tax Act.
-
1989 (1) TMI 89
The High Court of Kerala dismissed a petition filed by an assessee-firm engaged in film distribution regarding the taxation of commission income. The assessee had not appropriated the commission income as per the agreement terms, but the Tribunal upheld the tax assessment based on the mercantile system of accounting. The court found no legal questions to refer and dismissed the petition. (Case citation: 1989 (1) TMI 89 - Kerala High Court)
-
1989 (1) TMI 88
Issues:
1. Assessment of cash credits as income from other sources in the case of an unregistered firm for the assessment year 1978-79.
2. Discrepancy in the findings of the Appellate Tribunal regarding the commencement of business by the firm.
3. Disagreement on the correct date mentioned in the assessment report.
Analysis:
The High Court of Kerala addressed the issue of assessing cash credits as income from other sources in the case of an unregistered firm for the assessment year 1978-79. The respondent, an assessee to income tax, was a firm of Abkari contractors. During the assessment, two cash credits were noticed in the firm's accounts, which the creditors denied. The Income-tax Officer added the amounts to the firm's income as the source of the cash credits was unexplained. The Commissioner of Income-tax (Appeals) upheld this addition, but the Appellate Tribunal later ruled that no business was conducted by the firm during the relevant period, rendering the addition unwarranted. The High Court directed the Income-tax Appellate Tribunal to refer questions regarding the applicability of section 68 of the Income-tax Act for decision.
Regarding the discrepancy in findings of the Appellate Tribunal on the commencement of business by the firm, the Tribunal had noted that the business was not commenced until April 1, 1978, despite the partners participating in a bid earlier. The Tribunal concluded that since no business was conducted during the relevant year, there could not be a firm in existence. The High Court was called upon to determine the legal and factual correctness of these findings.
Lastly, the disagreement over the correct date mentioned in the assessment report was also addressed by the High Court. The court examined the cash credits in the firm's journal-cum-ledger on March 31, 1978, and the disownment of these credits by the creditors. The court found that the questions of law formulated by the Revenue indeed arose from the Tribunal's order, and directed the Tribunal to refer these questions for decision.
-
1989 (1) TMI 87
Issues Involved:
1. Legality of the prohibitory orders issued under section 132(3) of the Income-tax Act, 1961.
2. Validity of the assessment of income declared under the Amnesty Scheme.
3. Authority of Income-tax officials to enquire into the source of income declared under the Amnesty Scheme.
4. Application of Supreme Court judgments in the context of the Amnesty Scheme.
Issue-wise Detailed Analysis:
1. Legality of the prohibitory orders issued under section 132(3) of the Income-tax Act, 1961:
The petitioner challenged the prohibitory order dated December 15, 1986, served on the bank, which froze her savings account. The petitioner argued that the account belonged exclusively to her and there was no outstanding tax demand against her at the time of the seizure. The court found that the prohibitory orders were issued based on a predetermined notion without verifying the facts, and thus, were not bona fide. The court quashed the prohibitory orders, allowing the petitioners to operate their accounts freely.
2. Validity of the assessment of income declared under the Amnesty Scheme:
The petitioners had declared their income for the assessment years 1983-84 to 1986-87 under the Amnesty Scheme, and the Income-tax Officer accepted these declarations without variation. The court noted that the amounts in the petitioners' bank accounts were less than the declared amounts under the Amnesty Scheme. The court emphasized that the Amnesty Scheme's purpose is to allow tax evaders to voluntarily declare their income without being compelled to disclose the source. The court held that the income declared and assessed under the Amnesty Scheme should not be subject to further scrutiny regarding its source.
3. Authority of Income-tax officials to enquire into the source of income declared under the Amnesty Scheme:
The respondents argued that they were justified in treating the amounts in the petitioners' accounts as unexplained investments of their husbands, as the petitioners could not explain the source of the deposits. The court rejected this argument, stating that under the Amnesty Scheme, the declarant cannot be compelled to declare the source of income. The court distinguished the present case from the Supreme Court judgments cited by the respondents, noting that the declared income was not credited in the accounts of the petitioners' husbands or their firms.
4. Application of Supreme Court judgments in the context of the Amnesty Scheme:
The respondents relied on the Supreme Court judgments in Jamnaprasad Kanhaiyalal v. CIT and ITO v. Rattan Lal, which held that the immunity under the Voluntary Disclosure Scheme is available only to the declarant and not to other persons to whom the income actually belongs. The court clarified that these judgments applied to cases where the declared income was credited in the accounts of firms or other persons. In contrast, the petitioners' declared income was deposited in their own bank accounts and was not used by their husbands or their firms. Therefore, the court held that the income-tax authorities could not enquire into the source of the petitioners' declared income under the Amnesty Scheme.
Conclusion:
The court allowed all five petitions, quashed the prohibitory orders, and permitted the petitioners to operate their bank accounts without any restrictions. The court awarded costs to the petitioners and directed the refund of any security deposits after due verification. The judgment reaffirmed that the Amnesty Scheme's protection extends to the declarant's declared income, provided it is not credited in the accounts of other persons or firms.
-
1989 (1) TMI 86
The High Court of Kerala allowed the petition filed by the Revenue under the Gift-tax Act, directing the Income-tax Appellate Tribunal to refer a question of law regarding the valuation of a rubber estate to the court. The Tribunal's valuation of Rs. 1,500 per acre was deemed unreasonable and arbitrary, lacking proper basis.
-
1989 (1) TMI 85
The High Court of Allahabad directed the Income-tax Appellate Tribunal to reframe a question regarding the deletion of an addition of Rs. 15,436 made by the Income Tax Officer. The court found that a question of law does arise from the Tribunal's order. The application was allowed.
-
1989 (1) TMI 84
The High Court of Kerala directed the Income-tax Appellate Tribunal to refer questions of law arising from a case involving a discrepancy in the value of stock declared to the bank and the Income-tax Department. The Tribunal was asked to consider specific questions related to the assessment year 1976-77. The petition filed by the Revenue under section 256(2) of the Income-tax Act was allowed to this extent.
-
1989 (1) TMI 83
Issues:
1. Whether the Tribunal was justified in considering the case on merits for the levy of penalty after setting aside the assessment appeal?
Analysis:
The case involved a reference under section 256(2) of the Income-tax Act, 1961, regarding the justification of the Appellate Tribunal in considering the case on merits for the levy of penalty after setting aside the assessment appeal. The assessee, an individual and partner in a firm, had income from various sources, including business and properties. The Income-tax Officer added a sum as income from undisclosed sources, leading to penalty proceedings. The Inspecting Assistant Commissioner imposed a penalty after finding the assessee's explanation unsatisfactory. The Tribunal directed the Appellate Assistant Commissioner to consider an affidavit filed by the assessee from a third party and dispose of the appeal afresh. The Tribunal, after considering the affidavit, concluded that the assessee was not guilty of concealing income and canceled the penalty.
The main contention arose regarding the Tribunal's authority to consider the levy of penalty on merits after setting aside the assessment. The Revenue argued that the Tribunal should not have delved into the penalty issue independently, citing a relevant case law. On the other hand, the assessee's counsel argued that the Tribunal had the right to assess the penalty independently. However, the Tribunal's decision to cancel the penalty was challenged based on the setting aside of the assessment order.
The High Court held that once the assessment had been set aside and remitted for reconsideration, the issue of penalty could not be independently adjudicated by the Tribunal. The Tribunal's decision to cancel the penalty without a valid assessment in place was deemed erroneous. The Court referred to a similar case law to support its decision, emphasizing that penalty proceedings should be considered in conjunction with the fresh assessment order following the Tribunal's directions. Therefore, the Court answered the question in the negative, in favor of the Revenue, and awarded costs to the Revenue.
-
1989 (1) TMI 82
The High Court of Allahabad directed the Income-tax Appellate Tribunal to refer a question of law regarding payments made in cash after banking hours under section 40A(3) of the Income-tax Act, 1961. The Tribunal was asked to determine if there were exceptional circumstances justifying the payments. The application was allowed in part, with each party bearing their own costs.
-
1989 (1) TMI 81
Issues:
1. Interpretation of section 18(1)(c) of the Wealth-tax Act, 1957.
2. Determination of whether the assessee deliberately furnished inaccurate particulars of wealth.
Analysis:
The judgment by the High Court of Madras, delivered by Judge Ratnam, pertains to a reference under section 27(3) of the Wealth-tax Act, 1957. The issues referred for opinion were whether section 18(1)(c) of the Act applies to the assessee's case for the assessment year 1973-74 and whether the Tribunal's finding on the accuracy of particulars of wealth by the assessee is reasonable. The assessee, an individual, filed a return admitting a net wealth of Rs. 97,345 for the relevant assessment year, including two immovable properties. One of the properties was subsequently sold for Rs. 70,000, leading to penalty proceedings due to the variance in the declared value. The Inspecting Assistant Commissioner imposed a penalty of Rs. 30,000, contending that section 18(1)(c) applied. However, the Tribunal overturned this decision, stating that the assessee did not deliberately furnish inaccurate particulars.
The main argument for the Revenue was that the assessee's failure to disclose the revised property value after entering into a sale agreement indicated concealment. Conversely, the assessee argued that disclosing the property itself was sufficient and that the value did not equate to particulars. The court noted that the property's value was based on a 1968 valuation, which was accepted in previous years. The agreement for sale was entered into after the return filing, and the revised return did not retroactively alter the property's value. Therefore, the court held that the assessee did not conceal or inaccurately furnish particulars of assets, as the value in the agreement could not be attributed to the valuation date. Consequently, the court upheld the Tribunal's decision, ruling in favor of the assessee and awarding costs.
-
1989 (1) TMI 80
Issues:
- Interpretation of section 271(1)(c) of the Income-tax Act, 1961
- Justification of canceling penalty under section 271(1)(c)
- Rebuttal of presumptions raised by the Explanation to section 271(1)(c)
- Applicability of the Explanation to section 271(1)(c)
- Assessment of penalty based on concealed income or inaccurate particulars
- Consideration of evidence in penalty proceedings
Analysis:
The judgment pertains to a reference under section 256(1) of the Income-tax Act, 1961, involving the cancellation of a penalty under section 271(1)(c) of the Act. The case revolved around an individual assessee who had filed a return declaring income but faced additions due to unexplained investments. The Income-tax Officer imposed a penalty under section 271(1)(c) as the returned income fell short of the assessed income. The Appellate Assistant Commissioner later deleted the penalty based on tribunal orders in similar cases. However, the Revenue appealed, arguing that the Tribunal misinterpreted the Explanation to section 271(1)(c) and failed to establish the rebuttal of presumptions raised by it.
The High Court analyzed the case, emphasizing the significance of the Explanation to section 271(1)(c) in raising presumptions of fraud or neglect against the assessee. The Court referenced the Supreme Court's decision in CIT v. Mussadilal Ram Bharose, highlighting the three legal presumptions triggered by the Explanation. It criticized the Tribunal for not considering whether the assessee had rebutted these presumptions and for misdirecting itself by requiring the Revenue to prove concealment of income. The Court noted that the Tribunal erred in overlooking the legal implications of the Explanation and wrongly applied the law pre-amendments.
Furthermore, the Court found fault with the Tribunal's reasoning that there was no evidence of concealment by the assessee, emphasizing that the burden of proof lay with the assessee to rebut the presumptions. The Court concluded that the Tribunal's approach was flawed, as the assessee failed to provide any material to counter the presumptions raised by the Explanation. Ultimately, the Court held that the penalty should not have been canceled, as the assessee did not offer a valid explanation for the unexplained additions. The judgment favored the Revenue, upholding the penalty and awarding costs to them.
-
1989 (1) TMI 79
The Commissioner of Income-tax applied for a mandamus to refer questions to the High Court regarding the rejection of account books by the Assessing Officer. The High Court rejected the application, stating that the issues were questions of fact and not law, similar to previous cases. The High Court found no legal question in the Tribunal's order and rejected the application, with no costs awarded.
-
1989 (1) TMI 78
Issues Involved:
1. Applicability of Hindu law to Cutchi Memons in matters of property, succession, and inheritance.
2. Distinction between 'succession and inheritance' and 'rules as to joint family property, its distribution according to the rule of survivorship and right of a son in it by birth' under Hindu law.
3. Impact of section 2 of the Mysore Cutchi Memons Act, 1943 on joint family property rules.
4. Whether section 3 of the Mysore Cutchi Memons Act, 1943 preserves the rights of the applicant's sons acquired by birth.
5. Determination of whether the property and income are joint family property or separate property of the applicant.
Detailed Analysis:
1. Applicability of Hindu Law to Cutchi Memons:
The court examined whether the applicant, a Cutchi Memon, is governed by Hindu law in matters of property, succession, and inheritance. It was established that the Cutchi Memons were historically governed by the Hindu law of Mitakshara system, specifically in the civil station area of Bangalore City. However, the Mysore Cutchi Memons Act I of 1943, which became applicable in 1948, mandated that Cutchi Memons be governed by Muhammadan law in matters of succession and inheritance. The court upheld the view that the applicant is not governed by Hindu law but by the Muhammadan law as per the Act.
2. Distinction Between 'Succession and Inheritance' and 'Rules as to Joint Family Property':
The court analyzed whether Hindu law recognizes a clear difference between 'succession and inheritance' and 'rules as to joint family property, its distribution according to the rule of survivorship and right of a son in it by birth'. The court referred to various precedents and legal interpretations, concluding that the expressions 'inheritance' and 'succession' include the concepts of right by birth and survivorship under Hindu law. Therefore, the distinction is immaterial in this context.
3. Impact of Section 2 of the Mysore Cutchi Memons Act, 1943:
Section 2 of the Act states that all Cutchi Memons shall be governed by Muhammadan law in matters of succession and inheritance. The court interpreted this to mean that the rules of joint family property, its distribution according to the rule of survivorship, and the right of a son in it by birth under Hindu law are affected and displaced by the Muhammadan law.
4. Preservation of Rights Under Section 3 of the Act:
Section 3 of the Act preserves any rights or liabilities acquired or incurred before the Act's commencement. The court held that the rights of the applicant's sons, who were born after the Act came into force, were not preserved. The Hindu undivided family, in so far as the applicant was concerned, stood extinguished on the commencement of the Act. Therefore, the sons did not acquire any rights by birth in the property.
5. Determination of Property and Income:
The court concluded that the property and the assessable income therefrom are not the property and income of the joint family but constitute the separate property and income of the applicant. This conclusion was based on the interpretation that the joint family concept under Hindu law was displaced by the Muhammadan law as per the Act.
Conclusion:
The court answered the questions of law as follows:
1. The applicant is a Cutchi Memon but is not governed in matters of property, succession, and inheritance by the rules of Hindu law.
2. The concept of succession and inheritance as used in the Act includes rules as to joint family property, its distribution according to the rule of survivorship, and the right of a son in it by birth.
3. Section 2 of the Act affects the rules as to joint family property, its distribution according to the rule of survivorship, and the right of a son in it by birth.
4. The applicant's sons did not acquire any right by birth, and section 3 of the Act does not save their rights.
5. The property and the assessable income are the separate property and income of the applicant, not joint family property.
The court thus affirmed the decision against the assessee and provided detailed reasoning for each issue based on the interpretation of the relevant sections of the Mysore Cutchi Memons Act, 1943, and applicable legal precedents.
-
1989 (1) TMI 77
Issues Involved:
1. Whether the deceased was domiciled in India at the time of his death.
2. Whether the exemption under section 21 of the Estate Duty Act was available to the deceased in respect of his movable properties in Ceylon.
Issue-wise Detailed Analysis:
1. Domicile of the Deceased:
The primary issue was whether the deceased, M.T. Veerappa Pillai, was domiciled in India at the time of his death. The Tribunal had to determine if the deceased had abandoned his domicile of origin in India and acquired a domicile of choice in Ceylon. The deceased was born in India and moved to Ceylon in 1939, where he acquired properties and married a Ceylonese woman. Despite living in Ceylon for 25 years and applying for citizenship, the application was not granted during his lifetime. The Assistant Controller of Estate Duty found that the deceased had not abandoned his domicile of origin in India, as he frequently visited India, owned properties there, and remitted cash to India. The Appellate Controller, however, concluded that the deceased had acquired a domicile of choice in Ceylon. The Tribunal reversed this, stating that the deceased's application for citizenship did not establish an intention to abandon his Indian domicile. The Tribunal held that the deceased remained domiciled in India, and the High Court agreed, noting that the deceased's continued ownership of properties in India, frequent visits, and bequests to his Indian wife indicated that he had not abandoned his domicile of origin.
2. Exemption under Section 21 of the Estate Duty Act:
The second issue was whether the deceased's movable properties in Ceylon were exempt from estate duty under section 21 of the Estate Duty Act. Section 21(1)(b)(i) of the Act exempts movable properties situated outside India if the deceased was not domiciled in India at the time of death. Given the finding that the deceased was domiciled in India, the exemption under section 21 was not applicable. The High Court emphasized that the onus of proving a change in domicile lies on the person asserting it. The accountable person failed to provide sufficient evidence that the deceased had a fixed and settled intention to permanently reside in Ceylon. The Court also noted that the deceased's application for Ceylonese citizenship, which was not granted, did not demonstrate an unequivocal intention to sever ties with India.
Conclusion:
The High Court concluded that the deceased, M.T. Veerappa Pillai, had not abandoned his domicile of origin in India and had not acquired a domicile of choice in Ceylon. Consequently, the movable properties in Ceylon were not exempt from estate duty under section 21 of the Estate Duty Act. The questions referred to the Court were answered in the affirmative and against the accountable person, with the Revenue entitled to costs of the reference.
-
1989 (1) TMI 76
The High Court of Allahabad allowed the applications under section 27(3) of the Wealth-tax Act, 1957, filed by the Commissioner of Wealth-tax. The court directed the Income-tax Appellate Tribunal to refer a question of law regarding the classification of assets left by the deceased as separate property inherited from his mother.
-
1989 (1) TMI 75
Issues involved: Interpretation of depreciation under section 32(1)(ii) of the Income-tax Act, 1961 for electrical and sanitary installations in a hotel business.
Summary:
The High Court of Madras addressed the issue of depreciation claimed by a registered firm operating a hotel business for the assessment year 1975-76. The firm sought 100% depreciation on electrical switch boards, distribution boards, and sanitary pipeline installations for new rooms constructed within the existing building. The Income-tax Officer disallowed this claim, stating that such installations should be considered as an integrated unit. The Appellate Assistant Commissioner and the Tribunal also rejected the claim, emphasizing the integrated nature of the electrical and sanitary systems.
The Tribunal referred two questions of law to the High Court:
1. Whether the electrical and sanitary installations should be considered as one integrated whole or individual plants.
2. Whether depreciation should be restricted to 10% or allowed at 100% for these installations.
The firm argued for separate consideration of each room's installations, while the Revenue contended that the systems should be viewed as integrated wholes. The court analyzed the nature of the electrical and sanitary systems, concluding that they serve all rooms collectively and cannot be divided roomwise for depreciation purposes. Therefore, the court upheld the Tribunal's decision to restrict depreciation to 10% for these integrated systems, except for specific items like commodes, seat covers, and flush tanks.
In conclusion, the court ruled in favor of the Revenue, affirming that the electrical and sanitary systems should be treated as integrated units, and depreciation should be limited to 10%. The questions of law were answered in the affirmative against the assessee, with costs awarded to the Revenue.
....
|
9911796707
