9911796707
TMI Blog1986 (8) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... ,23,541. In the statement accompanying the return the assessee has shown the value of closing stock as on 31-3-1978 as under RBD Palm Olian.-Amount paid for purchase from Vasant Corpn., Singapore-Goods lost in transit and insurance claim pending ₹ 1,06,004.70 Apparently the assessee did not claim the amount of ₹ 1,06,004.70 as business or trading loss. The assessment was completed under section 143(3) of the Income-tax Act, 1961 ( the Act ) on 23-10-1978 accepting the value of the closing stock as shown by the assessee. Certain disallowances and additions have been made in that assessment. An appeal was preferred by the assessee with the AAC. The AAC, by his order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reject the additional ground raised. (We may clarify here that in the order of the Tribunal dated 30-6-1982 the amount of loss hag been wrongly shown as ₹ 1,60,400 instead of the actual amount of ₹ 1,06,004.70) 3. The ITO by his order dated 13-9-1982 rejected the assessee s petition under section 154 observing that the fact whether the assessee had actually lost goods of the value of ₹ 1,06,004.70 in high seas on 6-2-1978 and whether the assessee had obtained any amount by way of insurance claim have to be enquired into in detail and such detailed enquiries cannot be made in a proceeding under section 154. Aggrieved by the said order of the ITO the assessee preferred an appeal to the Commissioner (Appeals). 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessee did not claim the same as trading loss. He showed the same in closing stock as on 31-3-1978. But the ITO should have allowed the same as trading loss by following the decision of the Supreme Court in the cases of CIT v. S.N.A.S.A. Annamalai Chettiar [1972] 86 ITR 607 and CIT v. Nainital Bank Ltd. [1965] 55 ITR 707 . The officers of the department must not take advantage of the ignorance of the assessee as to his rights. It is the duty of the officer to assist the taxpayer in the matter of claiming and securing relief as pointed out by the CBDT in its Circular No. 14 of 1955 dated 11-4-1955, reproduced in Chaturvedi and Pithisaria s Income-tax Law, Third edn., Vol. 1, p. 856. When applicable provision of law or the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Chaturvedi Pithisaria s Income-tax Law, Third edn., Vol. 3, p. 3152]. Reliance is placed on the order of the ITO under section 154. 7. We have considered the rival submissions. The additional ground raised by the assessee in respect of ₹ 1,06,004.70 was not entertained b y the Tribunal as can be seen from paragraph 13 in order dated 30-6-1982. The Tribunal did not adjudicate and give a decision on the additional ground raised by the assessee. Section 154(1A), therefore, has no application in the facts of assessee s case. The Supreme Court in the case of M.K. Venkatachalam, ITO v. Bombay Dyeing Mfg. Co. Ltd. [1958] 34 ITR 143 held that a mistake may be either of law or of fact and that a glaring and obvious mistake of law ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Supreme Court held in the case of Maharana Mills (P.) Ltd. v. ITO [1959] 36 ITR 350 that the record contemplated by section 35 [of the Indian Income-tax Act, 1922] does not mean only the order of assessment but it comprises all proceedings on which the assessment order is based and the Income-tax Officer is entitled for the purpose of exercising his jurisdiction under section 35 to look into the whole evidence and the law applicable to ascertain whether there was an error . So, in the instant case, though the assessee had not claimed deduction for the trading loss of ₹ 1,06,004.70 the ITO, when he made the assessment on 23-10-1978 was duty bound to inform the assessee that he was entitled to the deduction. This duty is st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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