COMMISSIONER OF INCOME TAX Vs. SAMBASIO AND CO

JUDGEMENT

(1.) In the assessment proceedings for the asst. yr. 1958-59, the assessee was disallowed a sum of Rs. 4,000 out of the total salary amount of Rs. 10,200 which was claimed to be deductible by the assessee, the AAC took the view that the ITO failed to apply his mind to some important aspects relating to the claim for payment of salary and he held that the assessee had not been able to clarify the issues as to the service rendered or as to how the payments were allocated. He, therefore, set aside the assessment with a direction that the ITO should complete the proceedings de novo.

(2.) In appeal by the assessee the IT Appl. Tribunal considered this aspect of the order as amounting to enhancement and according to the Tribunal, the AAC was not entitled to set aside the order of the ITO and ask him to deal with the assessment afresh thus disallowing even that portion of the claim which the ITO had allowed in the first year. However, the operative finding given by the Tribunal was in these words :

(3.) At the instance of the revenue, the following two questions have been referred :