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TMI Blog1989 (2) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... ss is carried on by the assessee. According to the ITO once the assessee has shown the previous year ended on 31st Aug., 1984 now the assessee cannot change the previous year without the prior approval of the ITO. In addition to that, the ITO has also tried to find out some defects in the books of the assessee, has been given in para 4 of the ITO s order and finally the ITO was of the view that income is assessable in 1985-86 and the assessee has changed his previous year only because by ending the previous year on 31st March, 1984 no tax is payable 4. Being aggrieved the assessee carried the matter before the Dy. Commissioner (A) The Dy. Commissioner (A) has also confirmed the view taken by the ITO. 5. Being aggrieved, the assessee came in second appeal before us. Before us, Shri Ranka submitted that the assessee has mainly income from commission from the firm M/s Chandra Prabha Synthetic Ltd., Indore and that agency came to an end on 28th Feb., 1984 The income is of interest on the deposits which were withdrawn from Chandra Prabha Synthetic Pvt. Ltd. and deposited the same amount with M/s Rajendra Kumar Ashok Kumar. He further submitted that the assessee does not maintain reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a letter dt. 28th Feb., 1984 by M/s Chandraprabha Synthetic Pvt. Ltd. w.e.f. 28th Feb., 1984. The deposit which was with M/s Chandraprabha Synthetic Pvt. Ltd was received back by the assessee by a cheque No.87069 and this principal was deposited with M/s Rajendra Kumar Ashok Kumar. Interest on these deposits was received from both Chandraprabha Synthetic Pvt. Ltd. and Rajendra Kumar Ashok Kumar. This is the first time the assessee has filed the return and shown the previous year ended on 31st Aug., 1984. Before completion of the assessment, the assessee filed revised return and shown 31st March, 1984 as the year ending. 7. The ITO did not accept the revised return mainly for the reason that by filing the revised return showing the year ending 31st March, 1984, the assessee saved the tax on commission income. On perusal of the books produced, he further pointed out the following defects/discrepancy: "Though the credit note No. JA/141/dt. 16th Aug., 1984 from M/s Chandraprabha Synthetics Pvt. Ltd. was issued on 16th Aug., 1984 and received by the assessee subsequent to this date, the assessee made entry in his cash book on 28th Feb., 1984 and has made a mention as follows: (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . J-141 dt. 16th Aug., 1984, on 28th Feb., 1984. Mr. Ranka has explained that the entry in the books made on the basis of accrual and the assessee has made the entry in the books on the basis of accrual when received the letter from Chandraprabha Synthetics Pvt. Ltd. dt. 28th Feb., 1984. In my view, this cannot be a reason for preventing the assessee to file a revised return. The other fact pointed out was that ledger folio number in cash book has been written in the hand-writing Shri Rajendra Kumar while the ledger in the hand-writing of the Accountant. The ITO also pointed out that some mistakes are there in the dates and year and he also pointed out that the second part of the cash book has been written in the hand-writing of Shri Gopiram while posting in the ledger has been made by Shri Gaindilal. These things also in no way prevent the assessee to correct the previous year which has under mistaken belief shown as 31st Aug., 1984. If the ITO feels that books so maintained are defective or not believable, then, he can reject the book results. But while he has not disturbed the receipts or expenses, I do not understand why this type of clerical mistakes are coming in the way of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r different source permissible. In K.S. Malik vs. CIT (1980) 124 ITR 522 (Del), their Lordships of the Delhi High Court held that as a result of resolution of the company, writing off the amount, the assessee had obtained benefit within the meaning of s. 2(6C)(iii) of the Act, 1922 corresponding to s. 2(24)(Iv) of the IT Act, 1961 and the benefit was assessable to tax as deemed income in his hands. The source of income is different and separate from the other source of income of the assessee and the financial year was the correct (previous year) for the deemed income and not the year ending Sep., 30, adopted by the assessee in maintaining the accounts. In Beco Engg. Co. Ltd. vs. CIT the issue before their Lordships of the Punjab and Haryana High Court was that in the original return, the assessee has claimed depreciation and extra shift allowance, but in the revised return that claim was withdrawn. Their Lordships held that the Department was not competent to allow depreciation and extra shift allowance to the assessee as the same had not been claimed by it in the revised return. In Binodi Ram Balchand vs. CIT the issue before their Lordships of the Madhya Pradesh High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not in 1985-86. 10. The alternate submissions of Shri Ranka was that income which was accrued before the amendment in the Act cannot be taxed. If retrospective effect has not been categorically given in the Act, the commission was earned on 28th Feb., 1984. The amendment came into force w.e.f. 1st April, 1985. Thus its commission income cannot be taxed under the amended provision which came into force w.e.f. 1st April, 1985. For that he relied on the decision of the Rajasthan High Court in the case of CIT vs. Laxman Singh. Their Lordships held as under: "The Finance Act, 1972 is not retrospective, and therefore, whatever substantive rights which accrued to an assessee prior to April, 1973 could not be taken away. By virtue of the amendment to s. 2(4) of the IT Act, 1961 by the Finance Act, 1972 w.e.f. 1st April, 1973. Hence no capital gain will accrue to an assessee as a result of the sale of gold ornaments and jewellery during the previous year relevant to the asst. yr. 1973-74." 11. The aforesaid decision is binding on us and respectfully following the same. I agree with the submission of Shri Ranka that when the amendment is not retrospective, the income cannot be taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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