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Commissioner Of Income Tax vs Kiranbhai H. Shelat And Ors. on 27 April, 1998

11. The issue was considered by the Gujarat High Court in the case of Kiranbhai H. Shelat (supra) and the fact that the view expressed is in line with the view taken by the Central Board of Direct Taxes can be taken note of. In the above case, the precise question was the same as was in the present case. It was noticed that the Life Insurance Corporation of India is a statutory body; it grants incentive bonus to its Development Officers. It was observed that this bonus has two components. It has to be paid when extra business is procured by the Corporation. The Corporation put across its point of view before the Central Board of Direct Taxes and submitted that the incentive bonus is granted to an employee with a view to meet expenses that might have been incurred by him as a Development Officer in the discharge of his duties. It was accordingly held that where expenses are actually incurred by a Development Officer from the component which may fall under section 2(24) and is to be treated as income, then it is the profit element alone which has to be taken note of for the purposes of taxation under the Income Tax Act. The relevant observations made in this regard are being quoted below :
Gujarat High Court Cites 42 - Cited by 42 - Full Document

Commissioner Of Income-Tax vs Punalur Paper Mills Limited on 1 July, 1987

In Punalur Paper Mills Ltd.'s case (supra), a Division Bench of Kerala High Court has expressed an opinion that the circulars issued by the Central Board of Direct Taxes have force of law. The reason given for this was that these circulars are issued in the exercise of power conferred under section 119 of the Income Tax Act, 1961. These circulars, it was observed are in the nature of administrative relief. At page 40 of the judgment, it was observed that it is not open to the department to contend, even in cases where the circular goes beyond the terms of the section, that the circular has no legal effect or should not be given effect to. The circular would go to the assistance of the assessees. It is settled law that the circular cannot impose any burden on the taxpayer. But, by the issue of a circular, the rigour of the law can be relaxed by giving administrative relief...." it was observed that proposition in this regard is well settled. The decisions of the Supreme Court which were referred to in this regard are duly noticed at page 40 of the judgment. What was observed in this regard by the Division Bench of Kerala High Court is being reproduced below :

Ellerman Lines Ltd vs C.I.T. West Bengal, Calcutta on 22 October, 1971

"Apart from the fact that such circulars are binding on the officers of the department, even if the circulars are relied on for the first time in the High Court during the course of hearing, the assessee will be entitled to the benefit afforded by the circular. The court is bound to take note of the circular. These propositions are well settled by a series of decisions of the Supreme Court as well as of the High Courts (Vide Navnit Lal C. Javeri v. K.K. Sen, AAC (1965) 56 ITR 198 (SC), Ellerman Lines Ltd. v. CIT (1971) 82 ITR 913 (SC), Tata Iron & Steel Co. Ltd. v. N. C. Upadhyaya (1974) 96 ITR 1 (Bom), F.C. Agarwal v. CIT (1976) 102 ITR 408 (Gau), Navnitlal Ambalal v. CIT (1976) 105 ITR 735 (Bom), CWT v. Gainnion India (P) Ltd. (1981) 130 ITR 471 (Bom) and Addl.
Supreme Court of India Cites 10 - Cited by 237 - K S Hegde - Full Document

Tata Iron & Steel Co. Ltd. vs N.C. Upadhyaya And Anr. on 5 March, 1973

"Apart from the fact that such circulars are binding on the officers of the department, even if the circulars are relied on for the first time in the High Court during the course of hearing, the assessee will be entitled to the benefit afforded by the circular. The court is bound to take note of the circular. These propositions are well settled by a series of decisions of the Supreme Court as well as of the High Courts (Vide Navnit Lal C. Javeri v. K.K. Sen, AAC (1965) 56 ITR 198 (SC), Ellerman Lines Ltd. v. CIT (1971) 82 ITR 913 (SC), Tata Iron & Steel Co. Ltd. v. N. C. Upadhyaya (1974) 96 ITR 1 (Bom), F.C. Agarwal v. CIT (1976) 102 ITR 408 (Gau), Navnitlal Ambalal v. CIT (1976) 105 ITR 735 (Bom), CWT v. Gainnion India (P) Ltd. (1981) 130 ITR 471 (Bom) and Addl.
Bombay High Court Cites 24 - Cited by 52 - Full Document

F.C. Agarwal vs Commissioner Of Income-Tax on 16 July, 1975

"Apart from the fact that such circulars are binding on the officers of the department, even if the circulars are relied on for the first time in the High Court during the course of hearing, the assessee will be entitled to the benefit afforded by the circular. The court is bound to take note of the circular. These propositions are well settled by a series of decisions of the Supreme Court as well as of the High Courts (Vide Navnit Lal C. Javeri v. K.K. Sen, AAC (1965) 56 ITR 198 (SC), Ellerman Lines Ltd. v. CIT (1971) 82 ITR 913 (SC), Tata Iron & Steel Co. Ltd. v. N. C. Upadhyaya (1974) 96 ITR 1 (Bom), F.C. Agarwal v. CIT (1976) 102 ITR 408 (Gau), Navnitlal Ambalal v. CIT (1976) 105 ITR 735 (Bom), CWT v. Gainnion India (P) Ltd. (1981) 130 ITR 471 (Bom) and Addl.
Gauhati High Court Cites 26 - Cited by 55 - Full Document

Navnitlal Ambalal And Ors. vs Commissioner Of Income-Tax, Bombay ... on 10 March, 1975

"Apart from the fact that such circulars are binding on the officers of the department, even if the circulars are relied on for the first time in the High Court during the course of hearing, the assessee will be entitled to the benefit afforded by the circular. The court is bound to take note of the circular. These propositions are well settled by a series of decisions of the Supreme Court as well as of the High Courts (Vide Navnit Lal C. Javeri v. K.K. Sen, AAC (1965) 56 ITR 198 (SC), Ellerman Lines Ltd. v. CIT (1971) 82 ITR 913 (SC), Tata Iron & Steel Co. Ltd. v. N. C. Upadhyaya (1974) 96 ITR 1 (Bom), F.C. Agarwal v. CIT (1976) 102 ITR 408 (Gau), Navnitlal Ambalal v. CIT (1976) 105 ITR 735 (Bom), CWT v. Gainnion India (P) Ltd. (1981) 130 ITR 471 (Bom) and Addl.
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