S RAMAN CHETTIAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question that has been referred for the determination of this court is " whether the reassessment under section 34 completed on June 30, 1953, for the year 1944-45 is valid " " THE facts of the case are, in brief, as below Acting on the information that the assessee had income assessable for the assessment years 1944-45 and 1945-46, notices under section 34 were issued in respect of both these assessment years on April 13, 1948. An assessment was in due course made by the Income-tax Officer on October 27, 1950, for the year of assessment 1945-46, the accounting year for which had ended on March 31, 1945. THE ground upon which proceedings were initiated under section 34 appears to have been the information, that the assessee had been dealing in immoveable properties and had made a profit of Rs. 88, 760, in consequence of such transactions. Apparently, the notice under section 34 issued in relation to the assessment year 1944-45 was not pursued further as the whole amount was brought to tax in 1945-46. An appeal was carried in due course to the Income-tax Appellate Tribunal, which came to the conclusion that the transactions in landed properties constituted ventures in the nature of trade, profits from which were undoubtedly assessable. It may be mentioned that as against the sum of Rs. 88, 760 determined as profits from the sale of lands, the Appellate Assistant Commissioner in the appeal before him excluded a sum of Rs. 6, 000 for certain reasons which are not now relevant, and the Tribunal itself deducted a further sum thereby reducing the amount of profit to Rs. 79, 760

(2.) THE Tribunal further held that the transactions leading to the profit in question covered both the assessment years, and that only a sum of Rs. 33, 000 was profit assessable in the assessment year 1945-46. In coming to this conclusion, the Tribunal computed the quantum of profits attributable to the earlier assessment year 1944-45, which it fixed at Rs. 46, 760. In so far as the appeal, which the Appellate Tribunal was seized of at the time, which related to the assessment year 1945-46 was concerned, the Tribunal directed that this sum of Rs. 46, 760, which related to the earlier assessment year, could not be taxed in the assessment for the year 1945-46. It, however, observed" THE Income-tax Officer is at liberty to take such action as he may be advised about the assessee's liability for the earlier year 1944-45. "

(3.) WE have already stated that in respect of both the assessment years, notices were issued under section 34 on April 3, 1948. WE are now concerned only with the assessment year 1944-45 in this reference. The assessment that was made by the Income-tax Officer on October 27, 1950, related to the assessment year 1945-46, and in the view that he took that the entire quantum of profits arising from the sale of lands was assessable for this later year, he took no further proceedings in respect of the assessment year 1944-45. Reference was made to this in the order of the Appellate Assistant Commissioner, wherein he observed