Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1992)41ITD166(Mad.)
..... avail the department because in the said case the supreme court was concerned with the provisions of the companies (profits) surtax act, 1964, whose provisions are not inpari matria with those of section 80j of the income-tax act.6. ..... on his part, shri ramamani, the learned counsel for the assessee, strongly supported the impugned order of the first appellate authority on this issue contending that under the scheme of the act only borrowed monies and debt owed by the assessee (including amounts due towards any liability in respect of tax) could be deducted from the aggregate of the amounts representing the values of the assets as ..... the single common issue that arises for consideration in these cases is whether for purposes of computing the deduction admissible to the assessee under section 80j of the income-tax act, 1961, the sum which is appropriated towards proposed dividends and the sum set apart as provision for taxation should be taken into reckoning for the purposes of calculating the 'capital employed' within ..... as we see it, the answer to the said question will have to be given with reference to the provisions of section 80j(1a)(iii) of the act.the said clause stipulates that the aggregate of the amounts of borrowed monies and debts owed by the assessee (including amounts due towards any liability in respect of tax) shall be deducted from ..... section 80j allows specified deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1994)49ITD611(Mad.)
..... first principles we will show how even de hors the explanation the sums standing to the credit of ramaraju memorial fund cannot enter into the computation of the capital base for purposes of surtax.under the scheme of the companies (profits) sur-tax act, 1964, capital base is essentially what in corporate accounting phraseology is called "shareholders' fund". ..... the credit of ramaraju memorial fund are displayed in the balance-sheets under the head 'current liabilities and provisions - b provision'.now, explanation to rule 1 of the second schedule to the companies (profits) sur-tax act, 1964 declares, for removal of doubts, inter alia, that any amount standing to the credit of any account in the books of a company as on the first day of the previous year relevant to the assessment year which is of the nature of ". . . . ..... line that the provisions of rule 4 of the second schedule to the companies (profits) sur-tax act warranted a proportionate deduction in the capital base for purposes of sur-tax ..... item under the heading 'current liabilities and provisions' in the column relating to 'liabilities' in the 'form of balance sheet' given in part i of schedule vi of the companies act, 1956 (1 of 1956), shall not be regarded as a reserve for the purposes of computation of capital of a company under the provisions of this schedule".the clear and unambiguous provision of the said declaratory explanation is sufficient to decide the issue in favour of the department.obviously, the first appellate .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1991)39ITD389(Mad.)
..... scope for manoeuvring for more than one reason.firstly, the companies (profits) surtax act does not contain any definition of the term "reserve". ..... vested in him by and under section 16 of the companies (profits) sur-tax act, 1964, the cit called for and examined the records of ..... companies (profits) sur-tax act, 1964, levies an additional tax on the total income of a company in the manner stipulated by the act ..... we hold that the cit was not justified in taking recourse to the provisions of section 16 of the companies (profits) sur-tax act, 1964. ..... the subsistence of such a controversy, the assessee-company were to take the line that the wealth-tax payable by it a revenue deductible and on that basis to charge the wealth-tax payable by it to its profits and loss account, it could not be said that the company had acted in an unreasonable way, though in the process the book profits as well as the provision for taxation got ..... -payer to enlarge the capital base by bringing under its pale as many items as possible under the heading "reserves".fourthly, the question whether a particular sum set apart by the company is a 'provision' or a 'reserve' was a bone of contention till the supreme court handed down its decision in the case of vazir sultan tobacco co. ..... he invited our particular attention to the provisions of rule 1a of the second schedule to the companies (profits) sur-tax act, 1964 and contended that the focus of the said rule is on whether the provision for taxation actually made .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1983)5ITD20(Mad.)
..... the gross total income of the previous year relevant to the assessment year commencing on the 1st day of april, 1971, or to any one of the nine assessment years next following that assessment year, includes any profits and gains derived from a business carried on in india of printing and publication of books or publication of books, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee ..... (2) in a case where the assessee is entitled also to the deduction under section 80hh or section 80hha or section 80j or section 80p, in relation to any part of the profits and gains referred to in sub-section (1), the deduction under sub-section (1) shall be allowed with reference to such profits and gains included in the gross total income as reduced by the deductions under section 80hh, section 80hha, section 80j and section 80p. ..... (1) in the case of a company to which this section applies, where the total income (as computed in accordance with the other provisions of this act) includes any profits and gains attributable to the business of... ..... at present a special rebate on income-tax and surtax is granted to companies on their income from priority industries. .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1984)7ITD845(Mad.)
..... stay in a hotel for the purpose of transacting business.a person going, say from madras to delhi, will have to stay in a hotel not for the mere purpose of staying in hotel but to transact business on behalf of the company and in that process, he may have to, say for example, engage taxis to meet the concerned persons, report back to the office the developments and to take instructions and if these expenses, to cite only one instance ..... it is also clear that the section and the rule have been put on the statute book to catch those taxpayers who (to quote the finance minister from his budget speech 1964-65, supra) abuse the deduction provisions under the act by claiming unduly large expenditure on daily allowance, on unnecessary bookings on planes and trains, on the maintenance of guest houses and suites of rooms, hotels outside the specific place of business, on providing conveyances and ..... in support of this argument, the actual expenditure incurred by the employees and the other persons of the assessee-company on travelling and claimed as deduction is referred to.the expenditure is reasonable and the section and the rule have been introduced only to catch taxpayers trying to get away with huge claims of expenditure on travelling ..... 39,197 from its profits this year.we find that a special bench of the tribunal held that such a deduction was not allowable, in amar ..... objection relates to the rejection by the authorities below of the assessee's claim for deduction of surtax liability of rs. .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1988)25ITD1(Mad.)
..... , be taken either at the actual cost of the assets or their fair market value as on 1-1-1964.thus the controversy, whether the option provided for in section 55(2) is available to the assessee, nor the question that the shares in the amalgamating company having come into existence only after 1-1-1964, were not available before 1-1-1964 and, therefore, the option provided for in section 55(2) of the income-tax act was not available, does not simply arise. ..... he, however, held that the income-tax officer was not justified in capitalising the average profit of the company at a discount of 9 per cent by following the instructions issued by the central board of direct taxes in connection with wealth-tax assessments in board ..... held as follows : the revenue, of course, did not plead for exclusive adoption of the break-up method and wanted the mean of the values arrived at by applying the break-up method and the profit-earning method to be taken as representing the valuation of the shares, but we do not see on what principle can a combination of the two methods be justified. ..... because it is not a question of considering what is the profit embedded in the unsold stock either of shares or of stock-in-trade ..... are also concerned with the profit resulting from the sale of ..... , very relevant to consider in what manner these stocks had been valued year by year, but, as the supreme court noted, what is the cost of acquisition of the particular asset which is sold and whose profit is due to be considered. .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1993)47ITD315(Mad.)
..... v.d.gopal, the learned counsel for the assessee, took us through the facts and circumstances of the case relating to the issue and contended that since the lease rent was assessed under the head 'profits and gains of business', the retrenchment compensation was revenue deductible.according to him, even though the foundry business as such was discontinued, yet the assets of that business were commercially exploited by the ..... it was accordingly held that the assessee had not stopped using it as a commercial asset and, therefore, the income derived by leasing it out should be treated as profit from business and liable to excess profits tax.thereafter the high court went on to make the significant observation: "if the broad and liberal test evolved by this decision is to be applied, there would hardly be a case where the income from a factory or ..... ] 26 itr 765 - which was also a case of discontinuation of business - in which it had been held that the letting out of plant and machinery by the assessee-firm therein to another company could not fall within the definition of "business" under section 2(5) and that as the assessee had no business during the relevant period to which the excess profits tax act applied, section 10a could not be invoked by the excess profits tax authorities.32. ..... cit [1964] 52 itr 410.in view of the foregoing, therefore, we hold that the lower authorities were justified in coming to the conclusion that the write off of bad debt in the relevant previous year .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1985)14ITD151(Mad.)
..... on the total or partial partition of a hindu undivided family ; (b) on any distribution of assets on the dissolution of a firm, body of individuals or other association of persons, or (c) on any distribution of assets on the liquidation of a company, or (e) under any such transfer as is referred to in clause (iv) or clause (v) or clause (vi) of section 47 ; (iv) such assessee being a hindu undivided family, by the mode referred to in sub-section (2) of section 64 at ..... transfer ; explanation : (1) in determining the period for which any capital asset is held by the assessee- (a) in the case of a share held in a company in liquidation, there shall be excluded the period subsequent to the date on which the company goes into liquidation ; (b) in the case of a capital asset which becomes the property of the assessee in the circumstances mentioned in sub-section (1) of ..... (2) where under any provision of section 49, read with sub-section (2) of section 55, the fair market value of the asset on the 1st day of january, 1964, is to be taken into account at the option of the assessee, then, the cost of acquisition of the asset shall, at the option of the assessee, be the ..... profits by acting on commercial principles were to be ascertained so that the starch produced by the old undertaking and used as a raw material in the new undertaking was to be taken at the market price for the purpose of computing the profits and gains under section 15c of the indian income-tax act, 1922 ('the 1922 .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1991)38ITD409(Mad.)
..... a trust declared by a duly executed instrument in writing, whether testamentary or otherwise, including a wakf deed) is, liable as representative assessee consists of or includes profits and gains of business, income-tax shall be charged on the whole of the income in respect of which such person is so liable at the maximum marginal ..... which are as follows :- notwithstanding anything contained in sub-section (1), where any income in respect of which the person mentioned in clause (iv) of sub-section (1) of section 160 is liable as representative assessee consists of, or includes, profits and gains of business, tax shall be charged on the whole of the income in respect of which such person is so liable at the maximum marginal rate.2. ..... it would appear that the assessee trust permitted varalakshmi agencies to carry on the business of distributorship on its behalf and so while varalakshmi agencies carried on the distributorship business it merely acted as an agent of the assessee-trust and hence the ratio of the above madras high court decision appears to be applicable to the facts of this case.12. ..... high court on reference held the following as per the headnote at page 830 : "held, agreeing with the tribunal, that the income of the company by way of lease-rent from the letting out of its assets was assessable to tax under the head 'profits and gains of business'. ..... cit [1964] 51 itr 353; and also relied on a portion of the commentary at page 818 of chaturvedi and pithisaria's income .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Madras
Reported in : (1994)48ITD397(Mad.)
..... the instance of the revenue, the following question of law to the high court: whether, on the facts and in the circumstances of the case, the tribunal misdirected itself in law in holding that the profits or gains arising from the sale of loom hours were not chargeable to tax under the head 'capital gains as the asscssee had not incurred any cost in terms of money in the acquisition of the ..... the assessment years 1983-84 and 1984-85 a common question arose for consideration, and that was whether the amount received by the assessee-company from other spinning mills as and by way of, what the assessee has called, "hank yarn obligation premium" is chargeable to tax ..... given the fact that the discharging of hank yam obligation cuts into the profits of the spinning mills, the transferee mill will suffer erosion of profits in the process of discharging its own hank yarn obligation, and also additionally, in ..... the revenue submitted that 'where it is a part of the normal activity of the assessee's business to earn profit by making use of its asset by either employing it in its own manufacturing concern or by letting it put to others, consideration received for allowing the transferee to use that asset is income received from ..... following three points: (i) with the insertion of clause (iv) to section 28 by the finance act, 1964 w.e.f. ..... & 1984-85) - the assessee, a public limited company, manufactures and markets cotton yarn. ..... there the assessee company, which was in liquidation, had sold loom .....
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