Chennai Court January 1983 Judgments
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Commissioner of Income-tax Vs. National Palayacot Company
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1984]147ITR714(Mad)
Balasubrahmanyan, J. 1. The assessee in this case is a partnership firm of three equal partners carrying on business in the export of lungies and kylis in the Malaysian Federation through its branch at Penang. The assessee purchases goods in India and exports them to be sold by its branch at Penang. The head officer of the assessee in India makes out the invoices in the name of the Penang branch for the exports in terms of rupee currency and receives remittances from the Penang branch in the same currency. The Penang branch, however, maintains its accounts in terms of Malaysian dollars, which is the local currency in Penang. What the Penang branch does is to enter the cost of the goods received from India in terms of dollars. After sales in Malaysia, which yields Malaysian dollars, the Penang branch makes remittances to the head officer in India after converting the dollars into rupees. 2. During the period January 31, 1966, to March 18, 1966, the assessee sent from its head office in ...
Commissioner of Income-tax Vs. S. Krishnamurthy
Court: Chennai
Decided on: Jan-17-1983
Reported in: (1984)38CTR(Mad)71; [1985]152ITR669(Mad)
Balasubrahmanyan, J. 1. This is a case of capital gains assessment of a joint family of father and son. The father, by name Krishnamoorthy, purchased a house property in court-auction and made subsequent improvements thereto from out of his own separate funds, not utilising any joint family funds therefore. Subsequently, he threw this item of property into the joint family hotchpot. After some years, the property was sold at a profit by the joint family. In the hands of the joing family, the capital gains realized on the sale of the property was sought to be assessed. In the assessment, a controversy arose as to what was to be taken as the cost of acquisition of this property for the family. This cost had to be determined because the quantum of capital gains assessable under the Act has got to be ascertained by deducting from the total value of the sale consideration, the cost of acquisition. The ITO observed that, really speaking, there was no cost of acquisition at all for the assess...
Commissioner of Income-tax, Madras (Central) Vs. R.R. Pictures
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1984]147ITR150(Mad)
Balasubrahmanyan, J.1. The assessee is a partnership firm engaged in the business of film production. At the material time relevant for the present reference, the assessee-firm had produced a Tamil picture by name 'pasam'. It came to light that the assessee had paid the artists and technicians, who were engaged in that firm remuneration in excess of that which was brought to account. The ITO estimated the excess expenditure on this account at Rs. 2,96,520. He regarded this amount as income from 'other sources' and assessed it as such in the hands of the assessee-firm. On appeal by the assessee, the AAC sustained the finding of the ITO. He held that Rs. 2,96,520 represented understatement of production expenses and the amount was properly added as income from 'other sources' because the assessee-firm had no known sources of income for meeting the excess expenditure which had not been brought into account. The reasoning of the AAC was as follows : 'Since I am sustaining the addition of a...
Commissioner of Income-tax, Tamil Nadu, Central Vs. Express Newspaper ...
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1983]144ITR907(Mad)
Balasubrahmanyuan, J.1. This reference arises under the Companies (Profits) Surtax Act, 1964. The point for consideration related to the computation of chargeable profits under the First Schedule to that Act. 2. Under the Surtax Act, chargeable profits will have to be derived from e total income of the assessee-company as computed for income-tax assessment, but subject to certain adjustment. In the present case, the assessee is a private company by name Express Newspapers Private Ltd., Madras. Its total income for the assessment year 1972-73 for purpose of income-0tax assessment was Rs. 35,60,820. In the relevant previous year, the assessee had derived dividend income of Rs. 2,47,315. For computing the assessee chargeable profits under the Surtax Act, the assessee claimed that from the total income of Rs. 35,60,820 the dividend income of Rs. 2,47,315 must be deducted. The ITO did not do so. On appeal however, the AAC granted the assessee claim for deduction, While, doing so, however, t...
Commissioner of Income-tax, Madras Vs. T.V.S. and Sons Ltd.
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1983]143ITR645(Mad)
Balasubrahmanyan, J.1. The question in this reference made by the Income-tax Appellate Tribunal is about the cost valuation of bonus shares. 2. The assessee was a shareholder of a general insurance company. General insurance companies were nationalised under Central Act 57 of 1972. The scheme of nationalisation under this Act was peculiar. Under that scheme, the Central Govt. did not take over the assets of the general insurance companies. The Government took over, instead, all the shares held by the entire body of shareholders in all these general insurance companies at a valuation. This value was set out in a schedule appended to that Act. The valuation was fairly liberal such that capital gains resulted practically to everyone of the shareholders. 3. The assessee held 21,507 shares in a general insurance company called the Madras Motor and General Insurance Company Ltd. Under the Schedule to the Act, a sum of Rs. 1,77,69,600 was the amount payable to all the shareholders of this com...
Commissioner of Income-tax, Tamil Nadu-i Vs. Crompton Engineering Co. ...
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1984]147ITR704(Mad)
Balasubrahmanyan, J. 1. Three question of law have been referred to us by the Income-tax Appellate Tribunal. All of them relate to the computation of capital under the Second Schedule to the Companies (Profits) Surtax Act, 1964. The first question is as follows : 'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs. 8,50,000 appearing in the accounts under the head 'Provision for gratuity' should be included as a 'reserve' in the computation of the capital base for the purpose of surtax assessment for the assessment year 1964-65 ?' 3. The assessment year concerned in this reference relates to the year 1964-65 for the relevant previous year ended December 31, 1963. In the balance-sheet as on December 31, 1962, the assessee made a provision for gratuity in the sum of Rs. 8,50,000. The ITO held that since the amount had been set apart with the specific idea of meeting the assessee's liability of paying gratuity to the ...
Commissioner of Income-tax, Tamil Nadu-ii Vs. Madras Electrical Conduc ...
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1984]146ITR316(Mad)
Ramanujam, J. 1. The assessee in this case carries on business in the manufacture and sale of electrical conductors. The assessee claimed relief under section 80-I before the ITO. The ITO computed the total business income at Rs. 10,48,390 and after deducting therefrom the profits obtained by sale of the car as also the scrap sales arrived at a net figure of Rs. 10,47,519. The ITO gave relief of 5 per cent. on this which amounted to Rs. 52,376 as the relief to which the assessee will be entitled under section 80-I of the I.T. Act. The assessee appealed to the AAC and one of the points raised by him was whether the assessee is entitled to the relief in respect of profits assessable under section 41(2) of the Act. The AAC held that the profit assessable under section 41(2) is not entitled to be given as relief. On appeal, the Tribunal, however, took the view that the assessee is entitled to the relief under section 80-I in respect of the profits assessable under section 41(2). Aggrieved ...
Commissioner of Income-tax, Tamil Nadu-i, Madras Vs. Eimco-k. C.P. Lim ...
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1984]147ITR603(Mad)
Balasubrahmanyan, J.1. An American company called Eimco Corporation Inc. ('Eimco' for short) and an Indian company known as K C P Ltd. ('K C P' for short) came together to form a new company in India bearing the name Eimco-K. C. P. Ltd. (hereinafter called 'the assessee company'). The object of promoting the assessee-company was to manufacture, on a commercial scale, liquid-solids separation equipment, sedimentation water and sewage-treatment equipment, etc. At the time of promotion of the new company, it was agreed that half of the share capital was to be subscribed by Eimco and the other half of the share capital was to be subscribed by KCP. It was further agreed that Eimco should, to start with, subscribe for equity shares of the face value of Rs. 2,80,000. Of this, Rs. 45,000 alone was to be paid for in cash by Eimco. The remaining equity shares of the value of Rs. 2,35,000 were to be allotted to Eimco in consideration of their undertaking to make available its technical know-how t...
Commissioner of Income-tax, Tamil Nadu-iii Vs. Peirce Leslie and Co. L ...
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1984]147ITR157(Mad)
(1) Of the three questions referred to this court under S. 66(1) of the Act, the first two were answered against the assessee in the order of this court dated 3rd September 1958 ().The answer to the third of the questions was reserved, and by the order dated 3rd September 1958, a further statement of the case was called for from the Tribunal, which has since been submitted.(2) The entire claim of the assessee was allowed by the Tribunal, and even at the earlier stage the assessee did not dispute the fact that the entirety of its claim, though upheld by the Tribunal, could not be sustained. The claim in the proceedings put forward by the assessee before us was a much more limited one, the details of which were set out in the order dated 3rd September 1958. It is the correctness of that claim we have to decide on the basis of the further statement of the case submitted by the Tribunal.(3) The first item which we have to consider is the claim of assessee, that for the first two chargeable...
Commissioner of Income-tax, Tamil Nadu-v Vs. P. Mariappa Gounder
Court: Chennai
Decided on: Jan-17-1983
Reported in: [1984]147ITR676(Mad)
Balasubrahmanyan, J. 1. Two controversies arise in these references under the I.T. Act, 1961. One is whether mesne profits decreed by a court of law can be held to be taxable income in the hands of the decree holder The other question is about the relevant year in which mesne profits are to be charged to income-tax 2. The decree holder, in this case, is an income-tax assessee. He obtained a decree for mesne profits against one Kochu Vareed in the following circumstances. The assessee agreed to purchase a title factory for Rs. 90,003 and paid an advance of Rs. 5,003 to the vendor under a written agreement dated May 22, 1950. The vendor, however, did not convey the property as promised, but in breach of the agreement, sold it to a third party by name Kochu Vareed and put him in possession. The assessee then sued his vendor for specific performance. Kochu Vareed impleaded him self in the suit and contested the assessee's claim. The trial court decreed specific performance. Kochu Vareed, h...
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