COMMISSIONER OF INCOME TAX Vs. SHROFF A D

JUDGEMENT

(1.) THE assessee was assessed to tax for the assessment year 1947 -48 on the 6th March, 1953. He was a dealer in shares and his income from that business was assed at Rs. 1,11,271. His contention was that this income should be reduced in view of certain directions given by the Tribunal in an earlier assessment and those directions were concerned with the valuation of the shares. The income -tax Officer accepted that contention of the assessed and in the final assessment order passed by him he directed that the sum of Rs. 1,11,271 was subject to adjustment. Therefore it is clear that in the final assessment what the Income -tax Officer had accepted as the income of the assessee was not Rs. 1,11,271, but Rs. 1,11,271 subject to adjustment. It will also be realised that the principle on which the adjustment was to be made was also accepted. So, the only question was to work out the figures in conformity with that principle.

(2.) NOW , on the 28th March, 1952, a notice was issued against the assessee under section 34, and the notice dealt with certain notional income which was sought to be added to the income of the assessee in respect of dividends of certain company of which the assessee was a director. The dividends were notional dividends under the provisions of section 23A of the Income -tax Act. The order of re -assessment under section 34 was passed on the 16th of March, 1953, and in this order of re -assessment the income of the assessee from his business in shares was taken Rs. 1,11,271. It appears that the assessee had filed his statement before the Income -tax Officer which went to show that according to him his income, if adjusted according to the directions of the Income -tax Officer, was not Rs. 1,11,271 but a sum of Rs. 54,747. Inasmuch as the assessment order made by the Income -tax Officer under section 34 did not carry out the direction of the Income -tax Officer under the order of the original assessment dated the 6th of March, 1953, the assessee appealed to the Appellate Assistant Commissioner and the Appellate Assistant Commissioner allowed the appeal of the assessee and directed that the Income -tax Officer should proceed with a de novo assessment and give effect to the direction given by the Tribunal with regard to the adjustment of the amount of Rs. 1,11,271. From this decision the Income -tax Officer appealed to the Tribunal and the Tribunal and the Tribunal by a majority took the view that the appeal to the Appellate Assistant Commissioner was not competent, and the assessee has now come on this reference.

(3.) REALLY , what is sought to be conveyed is appeal against any matter which is concluded by the original assessment, because it may well be that any particular item in the original assessment may become subject of re -assessment under proceedings under section 34. We will therefore amend the question to read 'against any matter concluded by the original assessment.'