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TMI Blog2005 (8) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed by both the parties that the assessee did not file any appeal/revision against the above assessment order. Subsequently, the ld. CIT on examination of assessment records, found that the assessee had shown receipt on transport account at Rs. 3,54,66,555 but as per TDS certificate filed along with the return, the gross receipts comes to Rs. 3,85,86,931. Thus, the assessee had shown lesser income to the extent of Rs. 31,20,578. The ld. CIT alter giving opportunity to the assessee and considering the submission of the assessee found that the Assessing Officer did not make proper enquiry and, therefore, directed the Assessing Officer to make fresh assessment after conducting propel enquiry/investigation and after affording reasonable opportunity to the assessee. In pursuant to the order under section 263 the impugned assessment was made by the Assessing Officer at an income of Rs. 7,96,500 as below: "Income as per return Rs. 34,490 Add back: 1. Discrepancy in gross receipt - as discussed above Rs. 531 2. Telephone expenses - as discussed above. Rs. 51,479 3. Travelling and conveyance - as discussed above Rs. 10,000 4. Interest paid on loan taken on personal a/c - as discussed A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to make fresh assessment." 5.1 The ld. Departmental Representative submits that since the ld. CIT has set aside the whole assessment, therefore, the Assessing Officer was justified in disallowing Rs. 2 lakhs out of interest and bank charges of Rs. 2,11,058 on the ground that such interest was paid in personal capacity and not for business purposes. She further submits that the ld. CIT(A) has erred in deleting the disallowance by holding that under section 263 there is no such direction to the Assessing Officer to make any such enquiry on these lines and thus the Assessing Officer seems to have exceeded his brief when he made this addition. She, therefore, submits that the disallowance of Rs. 2 lakhs made by the Assessing Officer be restored. 5.2 On the other hand, the ld. counsel for the assessee supports the order of the ld. CIT(A). 5.3 We have carefully considered the rival submissions of the parties and perused the material available on record. We find that the facts are not in dispute. We further find that it is necessary to reproduce the findings of the ld. CIT appearing at page 2 of his order passed under section 263 which read as below: "I have considered the submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntext in which the Commissioner has exercised his powers of revision. We have seen on the facts of the case that all three businesses cannot be regarded as one and it was fairly represented before the Commissioner that the loss incurred by the assessee in the cashew department and the hessian department cannot be set oil against the profits from the insecticides department. The irresistible conclusion one reaches is that the set off of the loss from the two different and distinct businesses against the profits of other businesses was not warranted by the provisions of the law and the direction of the Commissioner to exclude the losses of the cashew department and the hessian department has to be read along with or coupled with his earlier direction to make a fresh assessment in accordance with the law. In other words, he directed the Income-tax Officer to make a fresh assessment after excluding the losses in the cashew department and hessian department and, therefore, it is not permissible for the assessee to pick out one portion of the order of the Commissioner and contend that the order of assessment in its entirety was set aside. The order of the Commissioner has to be read in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fresh assessment pursuant to the directions contained in an appellate order, only such issues can be agitated which have not attained finality. Similarly, in an appeal against the fresh order, only such issues which have not become final by the earlier orders of the appellate authority can be agitated. The assessee cannot be allowed to challenge the findings of the appellate authority collaterally before the Income-tax Officer in the proceedings for the fresh assessment. In the present case, the Income-tax Officer disregarded the direction of the Appellate Assistant Commissioner when he examined the legality of the reassessment proceedings. He went wrong in examining the legality of the reassessment proceedings while making a fresh assessment pursuant to the directions of the Appellate Assistant Commissioner. Similarly, the Appellate Assistant Commissioner also erred in examining the question of legality of reassessment in appeal against the fresh order of the Income-tax Officer. The Tribunal was correct in reversing the same." (ii) In Herdillia Chemicals Ltd. v. CIT [1996] 221 ITR 194 (Bom.) it has been held at page 201 that- "The Tribunal, in this case, in our opinion, was rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner, if read as a whole in its proper context, would clearly show that it was neither the intent nor the purpose not the import of the order that the whole assessment was set aside and everything is kept at large so as to allow the Income-tax Officer to make a fresh assessment on all the aspects of the matter and give a free hand to the assessee to make all claims and all arguments in that assessment. In that view of the matter, we are unable to accept the contentions of Mr. J.C. Paul. The hands of the Income-tax Officer and in appeal against his order, of the Appellate Assistant Commissioner were tied." (v) In CIT v Lalchand Agarwal [2003] 259 ITR 497 (Raj.) it has been held at page 501 as under: "When the direction of the Commissioner of Income-tax (Appeals) in the point of first round was limited for valuing the jewellery which was available to the Assessing Officer at the time of original assessment made on March 27, 1991, and when the jewellery which was found in the locker of Smt. Radha Devi was not the subject-matter of the original assessment and there was no direction of the Commissioner of Income-tax (Appeals) in respect of the jewellery found in the locker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent which is against the provision of the law and, accordingly, there is no error in the order of the ld. CIT(A) in deleting the disallowance of Rs. 2 lakhs. The ground taken by the revenue is, therefore, rejected. 6. Ground No.3 is against the relief of Rs. 4 lacs allowed by the ld. CIT(A) out of the disallowance of transportation charges and tank lorry operational expenses of Rs. 5 lakhs. 6.1 The ld. Departmental Representative submits that for the reasons as discussed in the assessment order, the ld. CIT(A) has erred in reducing the disallowance to Rs. 1 lakh out of disallowance of Rs. 5 lakhs made by the Assessing Officer on account of unverifiable transportation charges and tank lorry operational expenses. She, therefore, submits that the disallowance made by the Assessing Officer be restored. 6.2 On the other hand, the ld. counsel for the assessee supports the order of the ld. CIT(A). 6.3 We have carefully considered the rival submissions of the parties and perused the material available on record. We find that there is no dispute that in the original assessment the Assessing Officer has made the similar disallowance of Rs. 5 lakhs which was not disputed by the assessee e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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