9911796707
TMI Blog1981 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AAC of Income-tax ("AAC" for short), dt. 24th May, 1980 by which he has cancelled the reassessment made by the Income Tax Officer ("ITO" for short) initiated under s. 147 (b) of the IT Act, 1961. 4. Briefly speaking, the facts of the case are that the reassessment proceedings were initiated by the ITO in respect of both the years under s. 147(b) on the reason that in the computation of capital gains arising out of the sale of agricultural lands, the assessee has deducted the fair market value of property as on 1st April, 1970 and not as on 1st Jan., 1954, which resulted in the total income being under assessed to the extent of Rs. 23,500 for the first year and Rs. 53,460 for the second year. The ITO noted that this mistake has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. It is pointed out by the ld. Deptl. Rep. that there are enabling portion of the judgment in the case of Indian and Eastern Newspaper Society and particularly he has drawn our notice to the part of the judgment in the above case as appearing at 1003, in which it has been stated that although an Audit Party does not possess the power to so pronounce on the law, it nevertheless may draw the attention of the ITO to it. Law is one thing, and its communication another. It is, therefore, urged that the AAC has not considered that part of the judgment which can be held to be in favour of the Revenue. It is argued that in the present case there was no question of opinion on law as the concise point of the law was simply pointed by the Audit. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l date for computation of the capital gains. It is urged that the fair market value of the property was adopted by the assessee as on the said date. In this connection, reliance is sought to be made on the decision of the Hon'ble Supreme Court in the case of CIT vs. Bai Shirin Bai K. Kooka (1962) 46 ITR 86(SC). It is argued vehemently by the ld. counsel for the assessee that the interpretation of the section was given correctly by the assessee and if the ITO could not bring himself to agree with that interpretation the dispute is naturally a legal question. It is stated by him that as held by the Supreme Court Audit cannot sit on Judgment and substitute itself for the Revenue authorities. It is submitted that Audit can only point out factua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons were recorded by the ITO for both the years, that the computation of the capital gains was at lessor figure as the relevant date for taking the cost price was taken as on 1st April, 1970 and not as on 1st Jan., 1954 and that this mistake was pointed out by the Revenue Audit. It can be said that no fresh facts came into the possession of the ITO before initiating the proceedings under s. 147(b). It was initiated after the Revenue Audit pointed out the mistake that the cost price should as on 1st Jan., 1954 and not as 1st April, 1970 as adopted by the ITO in the assessment made earlier. It may be mentioned here that in the computation of the capital gains, the assessee has adopted the said date i.e. 1st April, 1970 to ascertain the fai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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