9911796707
TMI Blog1982 (3) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... aised in the notice issued by the Commissioner. 3. After considering the objections of the assessee, the Commissioner has passed his order dated 20-11-1979 under section 263 of the Income-tax Act, 1961 ("the Act"). He has held that in respect of loss of Rs. 3,71,000 on account of breakages of bottles, the ITO ought to have scrutinised this item in great detail before accepting the assessee's claim. With regard to the sales tax liability of Rs. 96,238 he held that this related to the earlier years and it is not debitable for this year. On the point relating to the sale of beer, he held that the price reductions were not the result of commercial consideration but something else. He further held that for advance tax purpose the income was es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancelled. 5. The learned departmental representative submitted that the ITO has not scrutinised the various items pointed out in the notice of the Commissioner. In fact, in the questionnaire issued by the ITO to the assessee for information the items noted in the notice of the Commissioner do not figure though the amounts involved are heavy. The ITO without scrutiny, has accepted the claim of the assessee in respect of the loss on breakage of bottles, the sales tax liability, and the reduction in the rate of selling price of beer, with retrospective effect. He also pointed out that for advance tax, the estimated income was Rs. 12 lakhs whereas the returned income was Rs. 2,90,000. This itself required a probe by the ITO but be did not pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO ought to have probed into the matter. The action of the Commissioner with respect to this item also is perfectly justified. 7. Coming to the sales tax liability, it is admittedly a liability for the assessment years 1973-74, 1974-75 and 1975-76. Even the demand for these three years has not been raised in this year, but has been raised in the earlier years. In view of the decision of the Supreme Court in the case of Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363, this item cannot be allowed as a deduction in this year. The action of the ITO in allowing the same as a deduction is certainly prejudicial to the interests of revenue. The returned income when compared to estimated income for advance tax needs to be examined in detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry into the details as regards both the deductions and also that want of such enquiry had resulted in prejudice to the interests of the revenue. 9. In Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 the Supreme Court, on the facts of the case, held that there was material to show that the ITO had made the assessment in undue haste, without any evidence or inquiry and the Commissioner has jurisdiction under section 33B of the 1922 Act to revise the assessment order. It was further held that the assessee had not in any way suffered from the failure of the Commissioner to indicate the results of the enquiries to the assessee as the assessee would have full opportunity of showing to the ITO whether the income assessed in the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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