COMMISSIONER OF INCOME TAX Vs. SURJAN SINGH S

JUDGEMENT

(1.) IN this case, a statement of case has been sent by the Tribunal referring the following questions of law pursuant to an order of this court passed under Section 256(2) of the INcome-tax Act, 1961 (hereinafter to be referred to as "the Act").

(2.) THE assessee is an individual. For the assessment year 1973-74, the assessee was assessed to income-tax by an order dated September 19, 1975, under Section 143(3) of the Act. During the assessment proceeding, no books of account were produced on the ground that the same were not maintained. THE Income-tax Officer, on a consideration of all material facts, allowed deduction of Rs. 15,870 on account of development rebate in respect of machinery acquired during this period. Subsequently, the Income-tax Officer felt that the said deduction by way of development rebate was wrongly allowed to the assessee. He, therefore, initiated proceedings under Section 154 of the Act. According to the Income-tax Officer, since the assessee had not maintained any books of account, there was no occasion on his part to create a development rebate reserve account as required under Section 34(3)(a) of the Act. As such, the Income-tax Officer took the view that the deduction by way of development rebate was wrongly granted and this, according to him, being a mistake apparent on the face of the record, he recomputed the income by withdrawing the said deduction by passing an order of rectification under Section 154 of the Act. In the order of rectification, it has been specifically recorded that the assessee had deposited Rs. 12,000 in fixed deposit account and that that amount remains unutilised for the purpose of business.

(3.) I agree.