COMMISSIONER OF INCOME TAX Vs. SOUTHERN ROADWAYS LIMITED

JUDGEMENT

(1.) THE question referred to us at the instance of the revenue is : Whether on the facts and in the circumstances of the case, the tribunal was right in law in holding that the ITO had not assumed valid jurisdiction under s. 8 (b) of the Companies (Profits) Surtax Act, 1964 and upholding the order of the CIT (A) in annulling the reassessments ". THE assessment year is 1968-69.

(2.) THE assessee is a public limited company which derives income from the business of carrying cargo in trucks. THE original assessments for the years 1968-69 and 1969-70 were made under s. 6 (2) of the Companies (Profits), Surtax Act, 1964 on 3rd January, 1989, and on 28th February, 1970, determining the chargeable profits at Rs. 6, 71, 510, and Rs. 5, 03, 210 respectively. THE ITO issued notice proposing to reopen the assessments on 27th october, 1970, and on 27th November, 1990, respectively and thereafter completed the reassessment, as a consequence of which chargeable profit was revised to Rs. 8, 71, 228 for the year 1968-69 and Rs. 6, 31, 457 for the asst. yr. 1969-70. In computing the capital of the company, originally the ao had adopted the figures, shown in the balance sheet against the reserve and treated the whole of the reserve as part of the capital. In the reassessment, he excluded from the reserve the amount which had been appropriated for payment of dividend, such appropriation having been made at the meeting of the general body of the shareholders of the company, subsequent to the date of the balance sheet.

(3.) HOWEVER, the Tribunal not having examined the other aspects of the information recorded by the ITO, especially with reference to the audit party and the effect of reliance on the audit's objections on the need for reassessment and the Tribunal also not having examined the assessee's contention that even the services did not deal with the aspect which was dealt with by the ITO in the original assessment of this assessee for these assessment years, the matter is remitted to the Tribunal for examination of both the aspects and if necessary, the merits of the case. While answering the question referred to us, in favour of the Revenue, we remit the matter to the Tribunal to consider those aspects of the appeal which have been adverted to by us in the course of this order. .