1987 (3) TMI 53 - HC - Income Tax

Summary

Issues:
1. Whether the subsidy received from the Rubber Board is income of the assessee?
2. Whether the reopening of the assessment under section 147(b) is valid?

Analysis:
1. The court answered the first question in the affirmative, favoring the Revenue. The case involved a subsidy received by the assessee for rubber replantation, which was added to the income during reassessment. The Appellate Assistant Commissioner initially reversed the order, but the Tribunal dismissed the appeal. The court relied on a circular from the Central Board of Direct Taxes and the decision of the Supreme Court to support the inclusion of the subsidy as income. The court emphasized that the circular conveyed information regarding the Supreme Court's ruling, making it valid for reassessment. The court concluded that the Income-tax Officer acted within jurisdiction by reassessing the income based on the information available.

2. The court also answered the second question in the affirmative, again in favor of the Revenue. The reassessment under section 147(b) was deemed valid as the Income-tax Officer acted independently and based on the information provided, despite the presence of opinions in the circular. The court clarified that while the officer should disregard opinions, he could act on valid information for reassessment purposes. The judgment directed the parties to bear their respective costs and ordered the forwarding of the judgment to the Income-tax Appellate Tribunal, Cochin Bench.