Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1985)14ITD409(Hyd.)
1. This is an assessee's appeal. The point involved, though short, is interesting. The assessee is Veljan Hydrair (P.) Ltd., Hyderabad.Admittedly, one Shri Janardhana Rao is the managing director of the said company. He had contributed Rs. 3,680 whereas his employer, the assessee, contributed Rs. 3,632 to the provident fund. Admittedly, the contribution is to a scheme formulated under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The total of the employer and employee's contributions came to Rs. 7,312. The ITO held firstly, that Shri Janardhana Rao, managing director of the assessee-company, owns shares in the company with a voting power exceeding 10 per cent of the total shareholding. He also held that it is a case where the contribution should be limited to the permissible sums mentioned in Rule 75 of the Income-tax Rules, 1962 ('the Rules'). Therefore, the ITO held that the permissible limit was only Rs. 3,000 and he had disallowed a sum of Rs. 3,632 which ...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1985)14ITD483(Hyd.)
1. This is an appeal by the assessee against the order of the Commissioner (Appeals) confirming the ITO's order rectifying the assessment. In the rectification order, the ITO had disallowed certain expenditure incurred by the assessee on the ground that these expenses have to be considered as entertainment expenditure.2. The business of the assessee, a private limited company, is representation of manufacturers. In connection with the assessee's business, the foreign customers come to India. The assessee had in connection with their visits incurred expenditure by way of club bills amounting to Rs. 26,914 and bills on liquors amounting to Rs. 20,564.The total expense incurred was Rs. 47,478. In the original assessment order, the ITO had disallowed only Rs. 2,011. The rest of the expenditure has been allowed as a deduction. This order was passed on 30-9-1983.3. The provisions regarding entertainment expenditure had undergone an amendment by the inclusion of Explanation 2 by the Finance ...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1986)15ITD209(Hyd.)
1. This is an appeal by a HUF against the action of the ITO assessing it at the higher rate applicable to the HUFs where one of the members has taxable income.2. The assessee-family consists of the karta Shri Krishna Rao, his wife and the minor daughter. The karta has two other children who are also minors, but there had been a partial partition between the karta and the two minor children. One of the minor children who is now separated is a partner in a firm in which the karta's wife is also a partner. In the assessment of the karta's wife, the income arising to the separated minor son has been included under Section 64 of the Income-tax Act, 1961 ('the 1961 Act').3. In deciding the rates to be applied in assessing the assessee-HUF the ITO was of opinion that since one of the members, i.e., karta's wife also has assessable income after the inclusion of the minor son's income under Section 64, the higher rate of tax will be applicable.This was confirmed by the Commissioner (Appeals).4...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1986)15ITD300(Hyd.)
1. This is an appeal by the assessee, a firm, against the order of the Commissioner under Section 263 of the Income-tax Act, 1961 ('the Act').The Commissioner has held that the assessee is not entitled to investment allowance under Section 32A of the Act.2. The assessee is a registered firm having two cinema theatres at Visakhapatnam. In the course of the accounting year concerned, the assessee invested on machineries on which it had claimed investment allowance to the extent of Rs. 5,92,974. The ITO had allowed the assessee's claim.3. The Commissioner was of opinion that the grant of allowance or investment allowance was erroneous and prejudicial to the revenue. He pointed out that the machinery installed in the business of exhibition of films do not answer to any of the types of business mentioned in Section 32A. He directed the 1T0 to modify his order and withdraw the investment allowance erroneously granted.4. The assessee is in appeal before us. Shri Sreerama Rao, the learned cou...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1986)16ITD374(Hyd.)
2. Shri R.V. Nagabhushana Rao, who was the karta of the HUF expired on 29-10-1978 leaving behind his widow, Smt. R. Venkataravamma, and four sons, viz., Shri R. Ramachandra Rao, Shri R. Poornachandra Rao, Shri R.Chandrasekara Rao and Shri S. Sreenivasa Rao. On 25-9-1982, Shri R.Ramachandra Rao as the karta of the HUF of late Shri R.V. Nagabhushana Rao filed a claim of complete partition under Section 171 of the Income-tax Act, 1961 ('the Act'). It was claimed that the residential house was settled in favour of Smt. R. Venkataravamma by her four sons oh 4-12-1978 and later on on 31-3-1979 the business, silverware and household utensils were divided. It was urged that the total partition should be recorded. The 1TO did not accept the claim for partition. He held that the house property was not allotted to any single coparcener.In the absence of the registration it cannot be said that the HUF has legally partitioned the house property. The document dated 4-12-1978 filed in support of the...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1986)15ITD26(Hyd.)
1. This is an appeal filed by Sri Balaji Metal Finishers, Secunderabad against the order of Commissioner Hyderabad, for the assessment year 1979-80.2. The assessee is a company incorporated for job works for electroplating. The assessee claimed investment allowance and was allowed the same at 25 per cent on an outlay of Rs. 1,43,593 working out to Rs. 35,898. The assessee had made reserve as required and the ITO allowed the investment allowance as claimed. Since the assessee had only a loose investment allowance was indicated in the assessment order as an amount which would be carried forward. The Commissioner noticed the assessment. He was of the view that the activity of electroplating cannot be treated as manufacture and that, therefore, investment allowance was wrongly allowed. He issued notice to show cause why the investment allowance should not be withdrawn acting under Section 263 of the Income-tax Act, 1961 ('the Act'). The assessee replied with reference to case law that the...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1986)16ITD35(Hyd.)
1. This is an appeal filed by the assessee against the order of the Commissioner (Appeals), Visakhapatnam, dated 13-9-1983. The facts leading to the appeal are as follows.2. The assessee is an individual. The assessment year involved is 1982-83 for which the previous year ended by 31-3-1982. The assessee carried on abkari business during the financial years 1970-71 and 1971-72. He stood a surety for the kist amounts which had fallen due from his abkari business and he has mortgaged his immovable property to the State Excise Department as security for the amounts due to the Government. The property that was so mortgaged appears to be a house site of 5346 sq. yards situated near Waltair. By virtue of the authority vested in the Government perhaps under Section 69(1)(b) of the Transfer of Property Act, 1882, the State Government sold the property in public auction without intervention of the Court and realised a sum of Rs. 5,62,980. Out of it, it had realised its arrears and interest amo...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1986)15ITD529(Hyd.)
1. We find it convenient to dispose of the three appeals together. Both the assessee and the department have come on cross-appeals against the order of the Commissioner (Appeals) for the assessment year 1980-81 and the department has come on appeal against his order for the assessment year 1981-82. The main point to be considered in these appeals is whether the assessee is entitled to depreciation in respect of the assets which came into their possession by virtue of an agreement with another firm by name Fitnut Products, Bharatpur.2. The assessee, a private limited company, had entered into an agreement on 22-4-1974 with a partnership concern Fitnut Products by which the assessee contracted to purchase their entire business of manufacturing rivets, screws, etc., with all its assets for a sum of Rs. 2,25,000. The factory is situated in the industrial estate in Bharatpur which was given on lease to that firm by the Government of Rajasthan. According to that agreement, the assessee has ...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1986)16ITD692(Hyd.)
1. One appeal is by the assessee and the other is by the department.They relate to the assessment year 1980-81.2. We will first take up the assessee's appeal being 828 (Hyd.) of 1984. The first ground in this appeal relates to the capitalisation of the pre-operative expenditure. The assessee had capitalised pre-operative expenditure of Rs. 98,25,457 incurred in connection with the setting up of the hotel and for the acquisition of the capital assets. Out of the above amounts, the ITO did not capitalise the following items amounting to Rs. 9,54,507 : In respect of Rs. 21,94,338 the ITO capitalised to the extent of 60 per cent thereof which came to Rs. 13,16,603. The balance of Rs. 8,77,736 was not considered by the ITO. Thus, the ITO did not capitalise Rs. 9,54,507 and Rs. 8,77,736 totalling to Rs. 18,32,243. On appeal, the Commissioner (Appeals) directed the ITO to capitalise to the extent of 80 per cent in respect of expenditure of Rs. 9,54,507 which the ITO did not capitalise and in...
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Hyderabad
Reported in : (1986)18ITD93(Hyd.)
1. Since common points are involved in these appeals and as the assessee is one and the same in both these appeals they can be taken up together and disposed of by a common order for the sake of convenience.2. The assessee is a public limited company which manufactures and sells cement. The assessee is having manufacturing units at three places, namely, Vijayawada, Visakhapatnam and Nadikudi. We are concerned with two assessment years in these appeals, i.e., assessment year 1982-83 for which previous year ended by 31-3-1982 and the assessment year 1983-84 for which previous year ended by 31-3-1983. For the assessment year 1982-83, the assessee had filed the original income-tax return on 9-9-1982. In the said return, it had claimed depreciation of Rs. 1,29,49,590. However, the assessee had revised its income-tax return for the assessment year 1982-83 on 15-5-1984. In its revised return, it claimed depreciation according to the Income-tax (Fourth Amendment) Rules, 1983 which came into f...
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