1975 (2) TMI 12

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..... ss loss was determined at Rs. 1,37,674 and Rs. 1,51,221, respectively. The Income-tax Officer also computed that the assessee-firm derived capital gains of Rs. 22,865 and Rs. 58,360, respectively. But, in the original assessment order, the Income-tax Officer did not set off the business loss against the capital gains and did not strike the net figure of loss. Consequently, in the individual assessments of the partners, the Income-tax Officer allowed deduction for the gross business loss apportioned in the ratio in which they were entitled to share profit and loss and brought to tax the share of capital gains as allocated to them. On the ground that a mistake apparent on the face of the record has crept in the original assessment orders, in .....

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..... applicable. In that view, the Tribunal cancelled the order of rectification for each of these assessment years as made without jurisdiction. All the same, the Tribunal gave a finding that there was a mistake apparent from the record, which could have been rectified by the Income-tax Officer under section 35(1) of the Indian Income-tax Act, 1922. At the instance of the revenue, the following question has been referred : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in cancelling the order of rectification made on December 10, 1965, under section 154 of the Income-tax Act, 1961, as illegal ? " Section 35(1) of the Indian Income-tax Act, 1922, and section 154 of the Income-tax Act, 1961, are in p .....

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..... if the order was one otherwise within his jurisdiction. In support of this contention, the learned counsel has referred to the decision of this court in VR.C.RM. Adaikkappa Chettiar v. Commissioner of Income-tax, wherein the earlier decision of the Supreme Court in Hazari Mal Kuthiala v. Income-tax Officer was quoted and followed. In Hazari Mal Kuthiala v. Income-tax Officer, where an order of the Commissioner of Income-tax passed under sections 5(5) and 5(7A) of the Indian Income-tax Act, 1922, was attacked as ultra vires and incompetent on the ground that the correct provision to be invoked for the assessment in question was section 5(5) of the Patiala Income-tax Act, the Supreme Court upheld the order treating the same as one passed unde .....

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