K C LUKOSE Vs. ITO KOTTAYAM

JUDGEMENT

(1.) This petition has been filed by an assessee under the Income Tax Act, 1961 to quash an order Ext. P5 dated 5-2- 1970 of the second respondent, the Commissioner of Income Tax, Kerala, in so far as it has included a sum of Rs. 13,607/- in the total income of the assessee under the bead capital gains, while giving substantial reduction to him under other heads.

(2.) The petitioner was assessed by the first respondent, the Income Tax Officer, Kottayam for the year 1964-65 fixing his total income at Rs. 80,550/-. It consists of Rs. 15,470/- under the head business, and Rs. 65,007/- under S.41(2) of the Act, namely difference between sale price and written down value of machinery, The assessee filed a revision before the Commissioner, objecting to the above computation. He allowed the petitioner's objection regarding the computation of income under business to a large extent and reduced the same to Rs. 6,850/-. Regarding the income under S.41(2) of the Act, the second respondent upheld the petitioner's contention to a large extent; and he fixed it at Rs. 50,702/-. But the Commissioner found an obvious omission on the part of the Income Tax Officer in not taking into account the capital gains accrued to the petitioner by sale of the machineries. This he fixed at Rs. 13,607/- with the result the total income of the petitioner was fixed at Rs. 70,160/- as against Rs. 80,550/- fixed by the Income Tax Officer.

(3.) Counsel for the petitioner contends that the Commissioner acted without jurisdiction in including in the total incom3 of the assessee the sum of Rs. 13,607/- as capital gains, since the question of omission to include any income in the total income of the assessee did not fall within the ambit of the revision petition filed by the petitioner. Counsel submits that the Commissioner can revise an assessment in favour of the revenue only under S.263, and that it should be done within the period provided therein.