Search Results Page
Search Results
1 - 10 of 10 (0.29 seconds)J.K. Woollen Manufacturers vs Commissioner Of Income-Tax, U.P on 2 August, 1968
20. In so far as addition of Rs. 4,08,109/- on account of conversion charges is concerned, it is found that M/s P.G. Foils Ltd. issued debit note again at the end of the year reducing the rate to Rs. 2000/- per MT from the earlier charged at Rs. 4000/- per MT and Rs. 3000/- per MT. This reduction is not even the part of the alleged agreement by means of which the job charges were sought to be reduced. Here again, I find that the assessee was charging Rs. 3000/- per MT from M/s P.G, Foils Ltd. for conversion of aluminium into rods in A.Y. 1995-96 i.e. immediately preceding year. What prompted the assessee to reduce conversion charges for rendering the same services is again not coming up from any relevant material. It is further important to note that there are 27 outside parties for whom the assessee did same conversion job and there was no such reduction in amount of invoice which was received without any debit note as is the case with M/s P.G. Foils Ltd. The reasons cited above qua the job charges, mutatis mutandis hold good for conversion charges. Accordingly, I do not approve the reduction in the conversion charges. The ld. Counsel for the assessee has relied on certain decisions including that of Laxmi Engineering Industry [supra], J.K. Woollen Manufacturers [supra]. In all these cases it was held by the Hon'ble Courts that an expenditure cannot be disallowed merely on the basis of suspicion and in applying commercial expediency for determining whether the expenditure was wholly and exclusively made out for the purpose of assessee's business, the reasonableness of the expenditure has to be judged from the point of view of the business man and not the department. This is the ratio laid down by the Hon'ble Courts in the light of decision cited by the ld. A.R. I find that these decisions are not applicable to the facts of the instant case for the reason primarily, that these have been (sic) expenditure incurred by the assessee whereas the issue in question is that of non-recording of proper income by way of collusive agreement between the two sister concerns, aiming at the reduction in the income of the assessee and corresponding increase in the income of M/s P.G. Foils Ltd. to facilitate the reduction in the total tax liability of the group concerns. Further, it is not a case in which the AO has stepped into the shoes of the assessee for determining that what amount should have been charged but a case in which income already earned and received was sought to be negatived by collusive agreement. So, these decisions do not bring the case of the assessee further in any manner. Therefore, taking into consideration the entirety of the factual matrix and the legal position emerging from the judicial precedents discussed above, I am not inclined to hold that the matter requires fresh investigation at the hands of the AO again.
Commissioner Of Income-Tax, Bombay vs M/S. Walchand & Co. (Pvt.) Ltd., Bombay on 17 March, 1967
He also cited the judgment of the Hon'ble Supreme Court in the case of J.K. Woollen Manufacturers v. CIT and CIT v. Balchand and Co Pvt. Ltd. for the proposition that the reasonableness of amount of expenditure has to be considered by the assessee only and the I.T. authorities cannot determine that what amount of expenditure should be incurred. He also relied on certain other decisions for the same reasoning that the business man is free to take appropriate decision about the amount of expenditure to be incurred while carrying on his business. It was, therefore, concluded that the assessee had rightly reduced the rate of job charges and the view taken by the ld. CIT(A) was correct and no addition was called for at all.
Sumati Dayal vs Commissioner Of Income-Tax, Bangalore on 28 March, 1995
14. The Hon'ble Supreme Court in the case of Sumati Dayal [supra] examined the facts in which an amount was credited in the assessee's capital account declared as winning from races. The revenue authorities did not accept the explanation offered by the assessee. The case of the assessee was that the amount was received from various race clubs on the basis of winning tickets. When the matter finally travelled to the Hon'ble Supreme Court, it found that the apparent must be considered real unless it can be shown that there are reasons to believe that the apparent is not real. It was further held that the taxing authorities were entitled to look into the entire circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. It was finally held that an inference can be reasonably drawn in these facts that the apparent was not real and winning tickets were purchased by the assessee after the event.
Commissioner Of Income-Tax, West ... vs Durga Prasad More on 26 August, 1971
In the case of CIT v. Durga Prasad More the Hon'ble Supreme Court came to hold that the apparent must be considered as real until it is shown that there are reasons to believe that the apparent is not real. In that case, the party relying on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make self serving statements in documents either executed by him or taken by the party and rely on those recitals. The taxing authorities were required to probe into the matter while looking at the documents produced before them. It was further held that they were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents. It was therefore, Observed as under:
Income Tax Officer vs Ch. Atchaiah on 11 December, 1995
I further find that the Hon'ble Supreme Court in the case of Income-tax Officer v. Ch. Atchaiah has also held to the same extent by holding that "the AO must tax the right person and right person alone. By 'right person' is meant the person who is liable to be taxed according to law with respect to particular income. Merely because wrong person is taxed with respect to particular income, the AO is not precluded from taxing the right person with respect to that income". From here it follows that the liability to tax is on the right person only and fact that such income was taxed in the hands of another wrong person would not be material in deciding taxability in the hands of the right person.
Section 80 in The Income Tax Act, 1961 [Entire Act]
Sunit Engineering And Industrial ... vs Income-Tax Officer on 20 October, 1993
20. In so far as addition of Rs. 4,08,109/- on account of conversion charges is concerned, it is found that M/s P.G. Foils Ltd. issued debit note again at the end of the year reducing the rate to Rs. 2000/- per MT from the earlier charged at Rs. 4000/- per MT and Rs. 3000/- per MT. This reduction is not even the part of the alleged agreement by means of which the job charges were sought to be reduced. Here again, I find that the assessee was charging Rs. 3000/- per MT from M/s P.G, Foils Ltd. for conversion of aluminium into rods in A.Y. 1995-96 i.e. immediately preceding year. What prompted the assessee to reduce conversion charges for rendering the same services is again not coming up from any relevant material. It is further important to note that there are 27 outside parties for whom the assessee did same conversion job and there was no such reduction in amount of invoice which was received without any debit note as is the case with M/s P.G. Foils Ltd. The reasons cited above qua the job charges, mutatis mutandis hold good for conversion charges. Accordingly, I do not approve the reduction in the conversion charges. The ld. Counsel for the assessee has relied on certain decisions including that of Laxmi Engineering Industry [supra], J.K. Woollen Manufacturers [supra]. In all these cases it was held by the Hon'ble Courts that an expenditure cannot be disallowed merely on the basis of suspicion and in applying commercial expediency for determining whether the expenditure was wholly and exclusively made out for the purpose of assessee's business, the reasonableness of the expenditure has to be judged from the point of view of the business man and not the department. This is the ratio laid down by the Hon'ble Courts in the light of decision cited by the ld. A.R. I find that these decisions are not applicable to the facts of the instant case for the reason primarily, that these have been (sic) expenditure incurred by the assessee whereas the issue in question is that of non-recording of proper income by way of collusive agreement between the two sister concerns, aiming at the reduction in the income of the assessee and corresponding increase in the income of M/s P.G. Foils Ltd. to facilitate the reduction in the total tax liability of the group concerns. Further, it is not a case in which the AO has stepped into the shoes of the assessee for determining that what amount should have been charged but a case in which income already earned and received was sought to be negatived by collusive agreement. So, these decisions do not bring the case of the assessee further in any manner. Therefore, taking into consideration the entirety of the factual matrix and the legal position emerging from the judicial precedents discussed above, I am not inclined to hold that the matter requires fresh investigation at the hands of the AO again.
The Companies Act, 1956
Commissioner Of Income-Tax vs Jairamdass Lokesh Kumar on 27 February, 2001
In this regard I find force in the submission advanced by the ld. D.R., for which he has relied on the case of Shri Jairamdass Lokesh Kumar [supra]. In this case the Hon'ble Jurisdictional High Court has held that if income actually belongs to the assessee, there was no impediment in levying tax on the income irrespective of the fact whether some persons have already paid or have been assessed on the basis of declaration submitted by them.
1