9911796707
TMI Blog1982 (9) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... 1978. Thereafter, by a notice dated August 16, 1980, the respondent-Agrl. ITO, I-Circle, Chickmagalur, called upon the petitioner to show cause why the order of assessment concluded on August 31, 1978, for the assessment year 1978-79 should not be rectified in respect of four matters. In the notice, it was indicated that depreciation had not been calculated Correctly, as result of which a sum of Rs. 8,157 came to be allowed on the declared value of the car at Rs. 32,614 at 25% of such value whereas the assessee petitioner was entitled to only 10% depreciation. Secondly, the assessee was intimated that the sale proceeds of the car belonging to the estate sold and the profits therefrom had not been subjected to tax. Therefore, it was liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the car sold by the assessee in the assessment year 1977-78. Similarly, he recalculated the life insurance policy rebate and added back a sum of Rs. 3,237 to the taxable income. In the result, the assessee was called upon to pay Rs. 13,240 as balance of tax. Aggrieved by the rectification order which is at annex. E to, the petition, the petitioner has approached this court under art. 226 of the Constitution, inter alia, contending that the order is patently erroneous and without jurisdiction and, therefore, it is liable to be set aside. Shri. G. Sarangan, learned counsel for the petitioner, has urged that in terms of r. 3 of the Karnataka Agrl. I.T. Rules, 1957 (hereinafter referred to as " the Rules "), he is entitled to 30% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The car which is purchased in the assessment year is entitled to 10 plus 20% depreciation, that is, 30% deduction and the Revenue has not been prejudiced and the respondent was clearly in error in law in taking the view that only 10% deduction was permissible. It was next contended by Mr. Sarangan that the assessee did not disclose the sale price of the car in the relevant assessment year 1978-79, which ought to have been treated as a profit accrued to the estate clearly and fell, if true, within the ambit of the correction available to the officer under s. 36 of the Act, as an escaped income and was not a matter for rectification under s. 37 of the Act. If the income from the sale of the car was not disclosed in the return, it was a cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the records in the relevant assessment year. On both grounds urged, the assessee should succeed. If knowingly, the ITO had allowed the full expenditure as deductible expenditure, it cannot be said later that he should have allowed only half. He did so with a knowledge that the vehicle was used exclusively for the maintenance of estate work. If it was a mistake due to his negligence and such a mistake on the part of the officer cannot be rectified as an apparent error of law and, therefore, there is no justification to look at the previous year's records of the assessment and rely upon that material to come to the conclusion that only half the expenditure should have been allowed. It is well settled principle now that for rectification, an ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
