9911796707
TMI Blog1981 (6) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... a revised return showing instead of positive total income, loss amounting to Rs. 12,210. Ld. ITO did not take into consideration the said revised return, even though it was a return falling under s. 139(5), IT Act. 3. The circumstances under which the ITO ignored the said revised return, were that before the receipt of the revised return, the ITO had on 18th March, 1977 despatched to the assessee copy of draft order as contemplated under s. 144B(1), IT Act. The said draft order was received by the assessee on24th March, 1977. The assessee after seeking an extension of time for filing objections, filed objection on15th April, 1977and before enumerating such objections in the letter concerned the assessee also mentioned the fact an out revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al return was admittedly filed in time, the second return filed on15th April, 1977based on subsequent discovery of wrongs/omissions is clearly a revised return falling under s. 139(5). IT Act, Shri Vaish, ld. counsel appearing for the assessee submitted that s. 139(5) gave an inalienable and important right to an assessee to file a revised return so long as the assessment was not complete and that in the instant case assessment was not already complete when the revised return was filed on15th April, 1977. On the other hand, Shri Madan for revenue suggested that as in accordance with the provisions of s. 144B, after the despatch of draft order to the assessee, ITO's powers to make variations in the draft order were strictly limited to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... draft assessment could in that case be regarded as final assessment. The case has no relevancy where we are to give harmonious construction to s. 139(5) and s. 144B. In the result, the matter is remanded to the ITO with the direction that he should make fresh assessment taking revised return dt.15th April, 1977as the basis. That disposes of ground Nos. 1 and 4. 8. So far as ground No. 3 is concerned, it involves adjudication of assessee's claim to weighted deduction in respect of certain items. This claim, as indicated earlier, was for the first time included in the revised return only. In the fresh assessment to be made by the ld. ITO pursuant to the remand by us, the said claim would doubtless have to be appropriately dealt with by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on the one hand and its Karta or Karta's wife on the other regarding payment of commission. Ld. ITO sought to apply the provisions of s. 40A(2) and the ITO disallowed expenditure of Rs. 1,00,862 and allowed the deduction only in respect of the expenditure of Rs. 12,000 namely, to the extent of Rs. 6,000 each paid to Karta and his wife by way of salary. 10. Assessee HUF had also debited to the profit and loss account of its business, an amount of Rs. 62,300 as being payable to assessee's Karta and his wife by way of interest on such portions of the amounts of their salary and commission as were not withdrawn by the Karta and his wife. ITO held that out of the said amount of Rs. 62,300 interest could be legitimately paid by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for asst. yr. 1972-73, the ITO allowed deduction in respect of the expenditure incurred on salary. Similarly, in the assessment for asst. yr. 1973-74, ITO allowed expenditure incurred on payment of commission @ 2 per cent of the sales as respects both the said persons. As for asst. yr. 1973-74, the Tribunal as per order dt.26th April, 1978remanded the matter to the ITO for fresh decision according to law as to the allowability of the expenditure incurred on payment of commission as aforesaid, and the matter is stated to be still pending with the ITO. 13. W.e.f.1st April, 1973the salary of Karta as well as his wife was raised to Rs. 15,00. On the aspect as to whether agreement for payment of commission was necessary to be executed bet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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