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Issues Involved:
The judgment involves the assessment of income of the assessee for two assessment years 1977-78 and 1978-79. The primary issues are whether the Appellate Tribunal was justified in canceling the order passed by the Commissioner of Income-tax u/s 263 of the Income-tax Act, 1961, and whether the Appellate Tribunal had valid materials to hold that the annual value of house properties admitted by the assessee represented the market value of the rent u/s 23(1) of the Income-tax Act. Assessment Year 1977-78: The assessee, a company, owned two residential properties in Madras. The Income-tax Officer adopted the income as shown by the assessee for these properties, and the Commissioner of Income-tax set aside the assessment orders, directing a reevaluation due to perceived low rental values. The Income-tax Appellate Tribunal found no errors in the determination of annual income from the properties and concluded that the Commissioner had not properly exercised his power of revision u/s 263. The Tribunal canceled the Commissioner's order, stating there was no ground for revision. Assessment Year 1978-79: The Commissioner directed the Income-tax Officer to reexamine the rental values of the properties due to an assumed general increase in rental values, without concrete evidence. The Tribunal found no errors in the Income-tax Officer's assessment and held that the Commissioner lacked material to revise the determination of annual rental values. The Tribunal correctly concluded that the Income-tax Officer's determination was not erroneous in law and could not be revised u/s 263. Both questions of law were answered in favor of the assessee, who was awarded costs. This judgment highlights the importance of concrete evidence and proper exercise of power in revising assessments under the Income-tax Act, emphasizing that assumptions without material basis are insufficient grounds for revision.
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