9911796707
TMI Blog1968 (11) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1965-66. The return was drawn up on the basis that the income of the previous year relevant to the assessment year 1965-66 was Rs. 3,79,889 and after setting off the aggregate of the losses carried over from the preceding years totalling Rs. 3,32,477 the net taxable income was Rs. 47,412. On the basis of the return, the petitioner paid a sum of Rs. 23,705 as self-assessed tax under section 140A of the Income-tax Act, 1961. On August 21, 1965, the Income-tax Officer, A-Ward, Aligarh, served a notice upon the petitioner stating : " Kindly refer to your returned income at Rs. 47,412. The income at this figure has been returned by you after claiming loss of Rs. 3,32,477 for which no details have been filed. A perusal of this office record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , requested to explain the computation of Rs. 3,32,477." The petitioner submitted a reply explaining how the figure of Rs. 3,32,477 was arrived at. The relevant extract from the reply is set out hereunder: Rs. -- 4,64,357 Loss returned, unascertained losses pending in appeals for the assessment year 1960-61. -- 35,857 Less items not seriously disputed-Assessment years 1959-60 and 1960-61. --------- -- 4,28,500 Loss for the assessment year 1960-61. -- 92,079 Add loss for the assessment year 1961-62. --------- -- 5,20,579 Loss -- 2,14,843 Less income-Assessment year 1962-63 as per return. --------- -- 3,05,736 Loss-As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment, any excess paid being refundable to the assessee. The section further declares that nothing done or suffered by reason or in consequence of any provisional assessment made under it shall prejudice the determination on the merits of any issue which may arise in the course of a regular assessment. A right of appeal has been expressly denied against a provisional assessment. An assessment to tax, provisional or regular, necessarily requires a determination of the assessable income. Unless the assessable income is determined, the tax cannot be computed. Now, the provisional assessment of tax must be made on the basis indicated by section 141 and that basis is the return filed by the assessee and the accounts and documents, if any, acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grant departure from the provisions of the statute and is in effect an unreal return. To what degree can such deviations be questioned by the Income-tax Officer will depend upon the facts of each case. We are unable to accept the contention of the petitioner in the broad terms in which it is made that the Income-tax Officer must accept the return and proceed on its basis even though in drawing it up the provisions of the Act have been grossly violated. Turning from these general observations to the specific objection raised by the Income-tax Officer upon the assessee's return in this case, the first objection appears to be to the carry forward of the loss as claimed by the petitioner in the assessment year 1960-61. The petitioner claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceeded to the stage of assessment by the Income-tax Officer or to the further stage of appellate determination by an Appellate Assistant Commissioner or even by the Income-tax Appellate Tribunal, or to the still further stage of a reference in the High Court or an appeal before the Supreme Court. The loss as determined at the furthest stage to which the proceeding has reached is the loss which must be carried forward. It is not open to the assessee to say that the loss as determined by the Income-tax Officer in the assessment proceeding is not the loss to be carried forward because he has appealed against the assessment, and that, therefore, he is justified in falling back upon the loss as claimed by him when drawing up the return. A l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of supplying information in support of a claim to deduction of business expenditure arises upon the investigation of the claim. To examine the merits of the claim, the Income-tax Officer would have to determine, whether the payment was actually made, whether the litigation on account of which it was made was related to the business, and whether it could be said that the expenditure was laid out or expended wholly and exclusively for the purpose of the business. The question arises when the Income-tax Officer proceeds to investigate the claim. There is no material before us to show that the assessment proceeding for the year 1961-62 had reached that stage. We are not satisfied that the assessment proceedings for 1961-62 had progressed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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