JIVATLAL PURTAPSHI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN the assessment of the assessee for the assessment year 1948-49, corresponding to S. Y. 2003 as the previous year thereof, the INcome-tax Officer had included a sum of Rs. 4,72,500 as part of the branch profits of the assessee arising ar Radhanpur. While that appeal against the assessment order, which, inter alia, challenged the said inclusion of Rs. 4,72,500 was pending, there were negotiations between the assessee and the department with regard to a large number of disputes relating to the income of the assessee in several different kinds of transactions. It appears that as a result of these negotiations, an agreement was arrived at between the INspecting Assistant Commissioner of INcome-tax, 'L' Range, Bombay, and the assessee, as could be seen from the assessee's letter to the INspecting Assistant Commissioner dated July 21, 1958, appearing at annexure "C" to the statement of the case and the letter from the INspecting Assistant Commissioner of INcome-tax to the assessee to August 5, 1958, appearing at annexure "D". According to this settlement, it appears to have been agreed to between the parties that the sum of Rs. 4,72,500, which had been included in the assessee's assessmentfor the assessment year 1948-49, should be deleted and since that assessment order was before the Appellate Assistant Commissioner in appeal, the department should concede in that appeal to the deletion of the said amount from the assessment. IN accordance with this argument, on August 7, 1959, when the Appellate Assistant Commissioner decided the appeal, the INcome-tax Officer conceded the deletion of the said amount of Rs. 4,72,500 and the Appellate Assistant Commissioner, after recording the said concession in his order, directed the deletion of the said amount in the following terms :

(2.) AFTER having agreed to the deletion of the said amount, the department preferred an appeal to the Income-tax Appellate Commissioner complaining that the item of Rs. 4,72,500 was wrongly deleted. At the hearing of the appeal before the Tribunal, the counsel for the assessee contended, inter alia, that the appeal was not competent, nor had the Tribunal jurisdiction to allow the matter to be agitated before it and decide it on merits. Without prejudice to these contentions, the counsel also argued the matter on merits. The Tribunal was not much impressed by the counsel's preliminary contentions, but in view of the contentions which were raised on merits, it sent the matter back to the Appellate Assistant Commissioner for hearing an disposal according to law. The assessee then made an application under section 66(1) of the Indian Income-tax Act requesting the Tribunal to raise questions, which arose on the preliminary contentions raised by it, and the Tribunal accordingly drew up a statement of the case and referred to this court the following two questions :

(3.) THE department has taken out a notice of motion whereby it wants produce some additional evidence to explain the circumstances in which the concession came to be made by the Income-tax Officer before the Appellate Assistant Commissioner. THE explanation is based on certain notes alleged to have been made by the Commissioner of Income-tax on January 28, 1958, in connection with the proposed settlement between the assessee and the department. It is said that, in accordance with these notes, the department was not prepared to an unconditional deletion of the item of Rs. 4,72,500, but was agreeable to delete it on certain terms. We do not think it necessary to go into this additional evidence, which the department wants to produce by the notice of motion which it has taken out, because the alleged notes are of January 18, 1958, whereas the compromise which has been entered into between the parties is in the months of July and August, 1958. Moreover, the terms of the compromise as recorded by either party do not make reference to any such condition as stated in the notes. We, therefore, dismiss the notice of motion.