9911796707
TMI Blog1973 (5) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is an individual. The assessee carried on business in hessian. The reference relates to the assessment year 1956-57, the relevant year being calendar year 1955. In the hessian business, there were two transactions in one of which the assessee got a profit of Rs. 1,83,062 while in another he sustained a loss of Rs. 2,71,919. The net result of these transactions was a loss of Rs. 88,857 which was shown as such in the profit and loss account. In the course of the assessment proceedings dealing with this claim for allowing this loss, the Income-tax Officer wrote a letter to the assessee on 10th November, 1960, and which contained statements, inter alia, as follows : " Please adduce evidence to prove conclusively the claim for loss in the hessian trading account at Rs. 2,71,920 ; it has to be proved that actual deliveries were taken and given in those transactions. It may also be proved that these transactions are not of a speculative nature. " The reply of the assessee is dated 29th November, 1960, which contained, inter alia, the following statement : " That in explaining how the loss of Rs. 2,71,920 was suffered, your petitioner begs to state that the loss arose from transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is what has been held by the Benches of the Income-tax Appellate Tribunal in the following cases : (a) I.T.O. V(1) v. Manickchand Newar (I.T.A. No. 8771 of 1958-59 of Bench A) (b) Sree Ram Jagannath v. I.T.O. II(1), Calcutta (I.T.A. No. 12900 of 1958-59 of Bench B). " In the aforesaid cases the Tribunal had held that in the circumstances where actual and physical delivery of a commodity was not taken or given and only P.D.Os. had passed, the transactions would be treated as speculative for the purpose of the Income-tax Act. In effect, these decisions take a view contrary to the decision taken by the Tribunal for the assessment year 1954-55 and overrule the previous decision. The short question is whether the delivery of the pucca delivery order constituted the actual delivery or whether dealing in pucca delivery order constituted a speculative transaction. The previous decision of the Tribunal was that it constituted a genuine transaction while the later decisions were of the view that it was speculative in nature. It is the knowledge of the fact that subsequently the Tribunal had held the aforesaid view about the effect of the delivery of the pucca delivery order that led t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o others in the course of securing order, the Tribunal in 1948-49 had disallowed a major portion of the expenses and had allowed it to the extent of Rs. 3,000. In view of the Tribunal's decision, amounts of Rs. 3,000, Rs. 2,963, Rs. 2,887 and Rs. 2,939, respectively, were allowed in each year from 1949-50 to 1952-53 as business expenditure in respect of the similar payments. When appeals relating to these assessment years were heard by a different Bench of the Tribunal on the same facts as were found by the Tribunal in 1948-49, it was held that no deduction at all should have been allowed. Thereupon, the Income-tax Officer started reassessment proceedings in respect of the years 1949-50 to 1952-53 in order to assess the amounts allowed as business expenditure. It was held by the Division Bench of the Bombay High Court that the observations made in the order of the Tribunal relating to the assessment years 1949-50 to 1952-53 did not amount to information in the possession of the Income-tax Officer and did not entitle him to reopen the assessment for these years. It was observed that a mere change of opinion on the part of the Tribunal regarding the admissibility of certain amounts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-valued. Section 59 of the Estate Duty Act, 1953, is in pari materia with the provision of section 34 of the Indian Income-tax Act, 1922. At page 379 of the report referring to the decision of Commissioner of Income-tax v. A. Raman Co. it was observed that the expression information in the context of section 147(b) of the Income-tax Act, 1961, must mean instruction or knowledge derived from extraneous sources concerning the facts or particulars or as to law relating to a matter bearing on the assessment. The Supreme Court also referred to the decision in the case of R. B. Bansilal Abirchand Firm v. Commissioner of Income-tax. In that case when the first assessment of the assessee's income was made by the Income-tax Officer the latter's information was that the assessee was a partner in another concern known as Bisesar House and that the interest had been received from that concern in the capacity of a partner. It was only after the Tribunal and the High Court had given their decision in the proceedings of the assessment of Bisesar House that the Income-tax Officer came to know that the interest was not being received by the assessee-firm in the capacity of a partner but in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a question of fact but a mixed question of law and fact and the interpretation by the Tribunal on such a question would be knowledge as to the correct nature of the transaction in a particular set of facts and from that point of view the facts of the instant case are different from the facts before the Bombay High Court as mentioned hereinbefore. But if the view of the Bombay High Court in that decision be that change of opinion on the legal character of a transaction in a particular set of facts by a Tribunal subsequent to its original view would not be information upon which the Income-tax Officer could act, we are, with respect, unable to agree with that view of the Bombay High Court and we are of the opinion that, in view of the decisions of the Supreme Court mentioned hereinbefore and the language of the section, the information in this case was sufficient in terms of the section. In the premises, the question referred to this court must be answered in the affirmative and in favour of the revenue. The Tribunal will now dispose of the matter in accordance with law in the light of the answer given. There will be no order as to costs. HAZRA J.-I agree. Question answere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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