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Issues:
1. Interpretation of whether an appeal lies to the Commissioner under section 32 of the Indian Income-tax Act when the Assistant Commissioner enhances the assessment under one head of income without increasing the total income by not including income assessed under another head. Analysis: The judgment by the High Court of Madras dealt with the question of whether an appeal lies to the Commissioner under section 32 of the Indian Income-tax Act when the Assistant Commissioner enhances the assessment under one head of income without increasing the total income by not including income assessed under another head. The case involved the petitioners who were initially assessed by the Income-tax Officer on a total income of Rs. 41,154, comprising income from property and other sources. The petitioners appealed to the Assistant Commissioner, who reduced the total income assessed by adjusting the figures under different heads of income. The petitioners argued that they were entitled to appeal to the Commissioner under section 32 as there had been an enhancement of the assessment by the Assistant Commissioner. The crux of the issue revolved around the interpretation of the term "assessment" under section 32 of the Income-tax Act. The petitioners contended that the computation of income under any head of income constitutes an assessment, entitling them to appeal if there is an enhancement in any specific head. On the other hand, the Income-tax Commissioner argued that "assessment" in section 32 refers to the assessment of the total income of the assessee. The court analyzed various sections of the Income-tax Act, including section 23(1) and section 30, to determine the meaning of "assessment." Section 23(1) emphasizes the assessment of the total income of the assessee, while section 30 refers to the assessment of the total amount of income. The court concluded that the term "assessment" in section 32 refers to the assessment of the total income of the assessee as a whole and not to individual heads of income. It clarified that the computation of income under different heads is not an assessment but a calculation of specific items of income that contribute to the total income assessment. Therefore, when the Assistant Commissioner enhances the income under one head without increasing the total income, it does not constitute an enhancement of the assessment as a whole, and thus, no appeal lies to the Commissioner under section 32. In the final judgment, the court answered the reference in the negative, stating that an appeal does not lie to the Commissioner in cases where the Assistant Commissioner enhances the assessment under one head of income without increasing the total income assessed by the Income-tax Officer. The costs were awarded to the Commissioner of Income-tax amounting to Rs. 250. The judgments of the judges, including Beasley (CJ), Sundaram Chetty, and Burn, JJ., concurred with the decision that no appeal lies in such circumstances.
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