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TMI Blog1984 (7) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal assessment was completed on 31-3-1975. The Commissioner set aside the original assessment by an order passed under section 263 on 4-1-1977. It is not necessary for us to go into the question about the validity of this order. Suffice it to say that the order under section 263 was not challenged on appeal. 3. In the reassessment proceedings consequent to section 263 order, the assessee claimed certain further deductions which had not been claimed by them in the original proceedings. On appeal, the Commissioner (Appeals) held that the ITO, having completed an assessment on regular basis, could not review his own order by allowing the assessee to make fresh claims in the assessment consequent to section 263 order. Since the original as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT [1963] 47 ITR 906 and the decision of the Madras High Court in the case of CIT v. Seth Manicklal Fomra [1975] 99 ITR 470. Shri Bagaria admitted that these decisions are connected with the powers of the ITO in setting aside assessments consequent to the directions of an appellate authority. But, he submitted that the same position would be applicable where the revisionary authority exercises his power under section 263. Shri Agarwala, for the department, submitted that the Commissioner has not completely set aside the assessment order of the ITO. He has set aside only partially. The ITO is only directed to make certain limited enquiries. The matter concerned is only in respect of a single item. Under these circumstances, it is not open t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be usefully referred to. This decision is in respect of wealth-tax provisions but the law on the point is in pari materia with the provisions in income-tax. In fact, their Lordships referred to a decision given under the Act of the Bombay High Court in the case of Kevaldas Ranchhodas v. CIT [1968] 68 ITR 842. They have observed that recomputation under section 34(1)(a) of the Indian Income-tax Act, 1922, can take place only with a view to garnering in the income escaping assessment under the first clause and that it was clear from the provisions of section 34 themselves that it was not intended for the benefit of the assessee but only for the benefit of the revenue. This view of the Bombay High Court had been approved and applied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITO has to function under certain restraints. It is those restraints which prevent the assessee from making any claim which was not before the ITO in the original proceedings. An assessment which had been set aside by an appellate authority restores the matter to the original position from where the ITO started the proceedings. Where an order under section 263 or a matter is reopened under section 147, there is no such restoration to the original position as between the assessee and the department. The objects of these types of proceedings are different. The objects are only for garnering the additional revenue. 8. The decision of the Madras High Court in Seth Manicklal Fomra's case is also more or less identical with the decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner (Appeals) that the assessee cannot claim any new deduction in these proceedings, which was not claimed by it in the original proceedings. 9 to 11. [These paras are not reproduced here as they involve minor issues.] 12. In Ground Nos. 10 to 12, the question is whether certain interest received by the assessee during the accounting year is assessable for the year under consideration. The interest relates to the excess profit duty payable by the assessee to the Holkar State in respect of the profits for the calendar year 1943 and subsequent years. As per Huzur Shree Shanker Order No. 297, a tax called ' excess profit duty ' was levied on all profits of industries in Holkar State exceeding the limit of Rs. 75,000. A part of the duty thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. Shri Bagaria, the learned counsel for the assessee, did not make any submission that the receipt is not taxable income. However, his contention is that under the law, the interest accrues automatically. Therefore, the year of accrual was in the 1950s. It cannot, therefore, be treated as having accrued in the financial year assessable for the year 1972-73. 16. We are afraid, we are unable to accept the submission. It may be true that as per the statute, the interest accrues and arises on the date of refund. But the assessment to income-tax does not depend merely on accrual. It also depends upon the method of accounting followed by the assessee in respect of these receipts. It cannot be disputed that a part of the excess profit duty w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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