1978 (7) TMI 167 - AT - Income Tax

Summary

Issues: Departmental appeals challenging AAC's orders on loss due to change in exchange rate and setting aside assessment orders for Asst. yrs. 1974-75 and 1975-76.

Analysis:
The Appellate Tribunal ITAT MADRAS-B heard departmental appeals against the AAC's orders regarding the loss due to a change in exchange rate for the Asst. years 1974-75 and 1975-76. The AAC had set aside the assessment orders concerning the issue of loss on the assessee company's liability in foreign currency outside India. The Tribunal considered arguments from both sides, with the departmental representative citing a decision from the Madras High Court and contending that the AAC should not have set aside the assessment partially but should have either remanded the case to the ITO or decided the claim on its merits. On the other hand, the counsel for the assessee supported the AAC's orders. The AAC had directed the ITO to ascertain detailed facts necessary for considering the claim and then make a reasonable judgment on the claim, specifically in light of section 43A(I) of the Act. The AAC set aside the assessment orders for this limited purpose, as detailed facts had not been fully ascertained. The Tribunal noted that the AAC had not directed a de novo assessment but had only set aside the assessment for the specific issue of the claim related to loss in exchange rate, finding no legal flaw in the AAC's order and upholding it. The appeals of the revenue were dismissed.

In another case cited during the proceedings, the High Court had ruled that if an assessment order is set aside entirely, the ITO must make a fresh assessment following the provisions of the Act. However, in the present case, the AAC had only set aside the assessment for the specific issue of the claim related to loss in exchange rate, not the entire assessment. The Tribunal found that the AAC's order was legally sound, as it was limited to the particular issue at hand. The Tribunal upheld the AAC's decision, emphasizing that the assessment was set aside for a specific purpose and not for a complete reassessment. The appeals of the revenue were unsuccessful, and the orders of the AAC were affirmed.