Mumbai Court May 1984 Judgments
D.M. Ghia Vs. Second Income-tax Officer
Court: Income Tax Appellate Tribunal ITAT Mumbai
Decided on: May-31-1984
Reported in: (1984)10ITD163(Mum.)
1. We find it convenient to dispose of these three appeals together since the issue to be decided is the same, viz., whether the assessee is entitled to deduction under Section 80V of the Income-tax Act, 1961 ('the Act') of the interest debited to his account in the books of the firm in which he is a partner.2. The assessee is an individual. He was a partner in the firm M.C.Ghia & Co. His personal account in the firm has been treated somewhat like a current account. His income receipts are credited in that account. So too his drawings and payment of taxes. The partnership deed did not stipulate that partners would be debited with interest.Nevertheless, interest has been charged on the debit balances. The accounting years are the financial years. For the year ending 31-3-1976, summary of the account shows :Balance brought forward 16,32,856 Deposits 85,693Withdrawals 1,79,535 Share of profit 28,311Interest 1,47,257 3. For the other two accounting years also, the position was the sam...
Tag this Judgment!income-tax Officer Vs. Jim RusdIn (P.) Ltd.
Court: Income Tax Appellate Tribunal ITAT Mumbai
Decided on: May-31-1984
Reported in: (1984)10ITD311(Mum.)
1. These two appeals, one relating to the assessment year 1974-75 and another relating to the assessment year 1975-76, filed by the revenue against the consolidated order of the Commissioner (Appeals), deal with the same issue and are, therefore, for the sake of convenience, disposed of by a common order.2. The assessee is a private limited company. The ITO in the course of the assessment proceedings found that the dividends distributed by the company within 12 months immediately following the expiry of the previous year were Rs. 6,500 for the assessment year 1974-75 and Rs. 3,07,800 for the assessment year 1975-76. The ITO held that considering the capital gains, on sale of land, which amounted to Rs. 12,90,988 for the assessment year and Rs. 38,40,479 for the assessment year 1975-76, the dividends distributed by the company fell short of the statutory percentage. The ITO did not accept the claim pf the assessee-company that the capital gains should not be included in the commercial ...
Tag this Judgment!G.N. Kamath Vs. First Income-tax Officer
Court: Income Tax Appellate Tribunal ITAT Mumbai
Decided on: May-29-1984
Reported in: (1984)10ITD292(Mum.)
1. In this appeal directed against the order of the Commissioner (Appeals) for the assessment year 1979-80 in his case, the assessee has drawn up as many as six grounds. However, the controversy raised, can be effectively summed up as under : Whether the Commissioner (Appeals) was right in upholding the estimate made by 'the ITO of the value of the 'Goodwill' received by the assessee on the sale of his business at Rs. 4,32,000 as against Rs. 5,20,000 declared by the assessee and in confirming the addition of the difference, i.e., Rs. 88,000 as 'short-term' capital gains.2. The facts of the case may be summarised as follows: The assessee, Shri G.N. Kamath, a qualified mechanical engineer, carried on the business of manufacturing mechanical drivers and couplings under the style and name Handling and Processing Equipment. This business, which was his proprietary concern till 30-11-1976, was, with effect from 1-12-1976, taken over by a partnership firm (constituted under a deed of partner...
Tag this Judgment!Nidhipati Singhania Vs. Wealth-tax Officer
Court: Income Tax Appellate Tribunal ITAT Mumbai
Decided on: May-25-1984
Reported in: (1984)10ITD173(Mum.)
1. These three appeals by the assessee pertain to the assessment years 1974-75, 1975-76 and 1976-77 and challenge the levy of penalty for concealment of wealth in all these years. The facts being similar, the appeals are being disposed of by this common order.2. The assessee was a minor and was represented by his guardian. He had inherited jewellery on the death of his mother sometime in the year 1965. This jewellery was then valued at Rs. 50,000. In the returns for the assessment years 1976-77 and 1977-78, the assessee declared the value of the jewellery coming to his share at nil. In the assessment years 1968-69 and 1969-70 it was declared at Rs. 50,000 and exemption was claimed under Section 5(1)(viii) of the Wealth-tax Act, 1957 ('the Act').3. In the subsequent years, 1970-71 onwards, including the three years under appeal, the value of this jewellery was declared at Rs. 50,000.In the assessment year 1974-75, the WTO vide his letter dated 28-12-1974 asked the appellant to file a v...
Tag this Judgment!Peter Luis Estate Vs. Thirteenth Wealth-tax Officer.
Court: Mumbai
Decided on: May-25-1984
Reported in: [1984]10ITD72(Mum)
ORDERPer Shri R. L. Sangani, Judicial Member - This appeal by the assessee relates to the assessment year 1976-77. The assessment with which we are concerned in this appeal is with regard to Peter Luis Trust. One of the properties of the said trust is situated at 8, Turner Road, Bandra, Bombay. The assessee claimed that valuation of the said property should be made under section 7(4) of the Wealth-tax Act, 1957 (the Act) because the said property was in occupation of the trustee, who had life interest, and all the beneficiaries. The WTO was of the opinion that section 7(4) was not applicable to the trust property and, therefore, rejected the claim.2. In the appeal filed by the assessee, the AAC observed that section 7(4) required that the property in question should be exclusively used by the assessee for residential purposes during the relevant period. Since the assessee was a trust, it could not be said that the property had been used by the trust for residential purposes. According ...
Tag this Judgment!Dr. Beck and Co. India Ltd. Vs. Income-tax Officer
Court: Income Tax Appellate Tribunal ITAT Mumbai
Decided on: May-23-1984
Reported in: (1984)10ITD145(Mum.)
1 to 9. [These paras are not reproduced here as they involve minor issues.] 10. The remaining point is, whether the assessee is entitled to the investment allowance in respect of the plant and machinery installed during the accounting year. It is an admitted position that the assessee had installed plant and machinery of nearly Rs. 30 lakhs, factory equipments of Rs. 2.6 lakhs and electrical installation of Rs. 38,035. The investment allowance claimed thereon was Rs. 8,17,436.There is no dispute that the necessary reserve has been created.However, the ITO was of the opinion that the assessee will not be eligible for investment allowance as the assessee is manufacturing enamels and varnishes which fall under the Eleventh Schedule of the Income-tax Act, 1961 ('the Act'). The Commissioner (Appeals) agreed to with him. He held that the expression enamel, varnish, etc., appearing in item 26 in the Eleventh Schedule should be understood in the same way as understood by a common man. There w...
Tag this Judgment!Anchor Line Ltd. Vs. Income-tax Officer.
Court: Mumbai
Decided on: May-21-1984
Reported in: [1984]10ITD63(Mum)
ORDERPer Shri R. L. Sangani, Judicial Member - This appeal by the assessee relates to the assessment year 1976-77.2. The assessee is a non-resident shipping company, incorporated in the United Kindgom. Prior to the assessment year 1976-77, the assessee was being assessed in accordance with the directions contained in Circular No. 7 [C. No. 27 (17)-IT/41], dated 10-2-1942-Taxmanns Direct Taxes Circular, Vol. 1. 1980 edn., p. 567 issued by the CBDT. That circular allowed a British shipping company to elect to be assessed on the basis of the ratio certificate granted by the UK authorities regarding the income or loss and the wear and tear allowance.3. Section 44B of the Income-tax Act, 1961 (the Act) which was inserted in the Act, by the Finance Act, 1975, with effect from the assessment year 1976-77, made a special provision for computing profits and gains of shipping business in case of non-residents. The contention of the assessee before the ITO was that since the said circular had not...
Tag this Judgment!income-tax Officer Vs. Dhanraj Mills (P.) Ltd.
Court: Mumbai
Decided on: May-18-1984
Reported in: [1986]17ITD457(Mum)
ORDERPer Shri S. N. Rotho, Accountant Member - This appeal has been filed by the department against the order dated 2-3-1982 of the Commissioner (Appeals) relating to the assessment year 1978-79, the previous year of which ended on 30-9-1977.2. The assessee is a limited company deriving income from business in the processing of textile as well as in warehousing and constructional activities.3. The first ground in this appeal states that the Commissioner (Appeals) erred in allowing deduction of Rs. 27,975 which was paid by the assessee as penalty to the municipal corporation. Shri D. Agarwala, the learned departmental representative urged before us that the Commissioner (Appeals) erred in his decision. On the other hand, Shri Desai, the learned representative for the assessee, supported the action of the Commissioner (Appeals).4. We find that the Commissioner (Appeals) has followed the order dated 29-9-1981 of the Tribunal in IT Appeal No. 2830 (Bom.) of 1980 wherein a similar point has...
Tag this Judgment!Nathani Steel (P.) Ltd. Vs. First Income-tax Officer
Court: Income Tax Appellate Tribunal ITAT Mumbai
Decided on: May-17-1984
Reported in: (1984)10ITD112(Mum.)
1. This appeal by the assessee is directed against the order dated 1-3-1982, passed by the Commissioner (Appeals).2. The assessee is a private limited company. The assessment year is 1976-77. The assessment for the concerned year was completed on 30-9-1978. The ITO was satisfied that in respect of the previous year the profits and gains distributed as dividends by the assessee within 12 months immediately following the expiry of that previous year were less than the statutory percentage of the distributable income of the assessee for that previous year. He, therefore, issued notice under Section 105 of the Income-tax Act, 1961 ('the Act') intimating the assessee that he proposed to make an order of levy of additional tax under Section 104 of the Act. This notice was dated 24-12-1979 and was served on the assessee on 28-12-1979. In order to avoid levy of additional income-tax under Section 104, it was obligatory on the assessee to make a further distribution of its profits and gains so...
Tag this Judgment!income-tax Officer Vs. Pramod Jhaveri (P.) Ltd.
Court: Mumbai
Decided on: May-17-1984
Reported in: [1986]17ITD717(Mum)
ORDERPer Shri R. L. Sangani, Judicial Member - This appeal by the department relates to the assessment year 1977-78. The assessee is a private limited company. According to the ITO, the distributable income of the assessee was Rs. 5,12,473, which included Rs. 2,97,747 being capital gains arising out of the sale of shares, which were held as investments. Since the assessee was an investment company, the ITO held that the assessee ought to have distributed Rs. 4,61.226 as dividends, being 90 per cent of the above distributable income. The assessee had distributed Rs. 2,50,000 as dividends. Hence, the ITO levied additional tax of Rs. 1,31,236 being 50 per cent of the amount of shortfall under section 104 of the Income-tax Act, 1961 (the Act). The Commissioner (Appeals) has cancelled that order on the ground that capital gains of Rs. 2,97,747 were not liable to be included for calculating the distributable income and that if that amount were excluded, the 90 per cent of the balance would n...
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