| Case ID |
1a436b2e-a773-4982-8869-038947836a8a |
| Body |
View case body. Login to View |
| Case Number |
CIVIL WRIT No. 1098 OF 1973 |
| Decision Date |
Dec 10, 1974 |
| Hearing Date |
|
| Decision |
The writ petition was dismissed as the Income Tax Officer (ITO) acquired information after the original assessment indicating that the interest paid by the petitioner on a loan from his provident fund did not constitute expenditure incurred in connection with the transfer of a house. The court found that the interest remained the property of the petitioner and was not an expenditure relevant to the capital gains calculation under section 48 of the Income-tax Act. The decision emphasized the importance of external information for reopening assessments under section 147(b) and upheld the jurisdiction of the ITO to issue notice under section 148. The court ruled that allowing the petitioner to retain the tax advantage would unjustly enrich him at the cost of public interest. |
| Summary |
This case revolves around the interpretation of sections 147 and 148 of the Income-tax Act, 1961 regarding income escaping assessment. The petitioner, a former Indian Civil Service officer, took a non-refundable loan from his provident fund to buy a house. Upon selling the house, he claimed the interest on this loan as an expenditure for calculating capital gains. However, the Income Tax Officer issued a notice under section 148 after receiving new information that the interest paid did not constitute an expenditure as it was credited back to the petitioner’s account. The court upheld the ITO's authority to reassess based on this new information, clarifying that the interest did not become government property and was not a deductible expense. This decision reinforces the need for accurate representations of financial transactions in tax assessments and highlights the ITO's requirement to consider external information before reassessment. |
| Court |
Delhi High Court
|
| Entities Involved |
Not available
|
| Judges |
V.S. Deshpande,
B.C. Misra
|
| Lawyers |
N.D. Karkhanis,
S.C. Manchanda,
B.N. Kirpal,
P.V. Kapur
|
| Petitioners |
Vashist Bhargava
|
| Respondents |
Income Tax Officer
|
| Citations |
1975 SLD 628,
(1975) 99 ITR 148
|
| Other Citations |
A.M. Allison v. B.L. Sen AIR 1957 SC 227,
D.N. Bannerjee v. P.R. Mukherjee AIR 1953 SC 58,
Bhopal Sugar Industries v. ITO [1960] 40 ITR 618 (SC),
Bombay Dyeing and Mfg. Co. Ltd. v. State of Bombay AIR 1958 SC 328,
CIT v. A. Raman and Co. [1968] 67 ITR 11 (SC),
Digambar Prasad v. S.L. Dhani [1969] Delhi 1016 (FB),
Durga Prasad v. Chief Controller of Imports and Exports AIR 1970 SC 769,
Ellerman Lines Ltd. v. CIT [1971] 82 ITR 913 (SC),
Howard de Walden v. Inland Revenue Commissioners [1942] 1 KB 389 (CA),
Kasturbhai Lalbhai v. R.K. Malhotra, ITO [1971] 80 ITR 188 (Guj.),
King v. Richmond Confirming Authority [1921] 1 KB 248 (KB),
Latilla v. Inland Revenue Commissioners [1943] AC 377 (HL),
Smt. Narayani Debi Khaitan v. State of Bihar [CA No. 140 of 1964, dated 22-9-1964],
Sangram Singh v. Election Tribunal [1955] 2 SCR 1 (SC),
State of Gujarat v. Arvind Mills Ltd. AIR 1974 SC 1300,
State of U.P. v. Dr. Vijay Anand Maharaj [1962] 45 ITR 414 (SC),
Veerappa Pillai v. Raman and Raman Ltd. AIR 1952 SC 192,
Canara Industrial and Banking Syndicate Ltd. v. CIT [1964] 51 ITR 479 (Mys.),
CIT v. Kelukutty [1972] 85 ITR 102 (Ker.),
Muthukrishna Reddiar v. CIT [1973] 90 ITR 503 (Ker.),
CIT v. Smt. H.H. Chand Kanwarji [1972] 84 ITR 584 (Delhi)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
147,
148
|