9911796707
TMI Blog1985 (4) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... he ITO, it appears from the original assessment order, treated the capital gain as long-term capital gain and, accordingly, after allowing set off of capital loss of Rs. 30,438 determined for the assessment year 1970-71, took the net capital gain of Rs. 33,287. It would be relevant to mention at this stage that during the year under appeal, section 2(42A) of the Income-tax Act, 1961 ('the Act') was inserted with effect from 1-4-1974 defining 'short-term capital asset'. The definition indicates that the short-term capital asset means a capital asset held by an assessee for not more than 60 months immediately preceding the date of its transfer. The ITO took action under section 147(b) of the Act. A notice under section 148 of the Act was issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60 months. Therefore, the ITO was justified in taking action under section 147(b). The Commissioner (Appeals), therefore, rejected the argument of the assessee. 3. Shri Bajoria, the counsel of the assessee, urged that the action taken by the ITO was illegal. Shri Bajoria stated that the facts are not in dispute and the facts are correctly reproduced in the original assessment order. The computation of the capital gain is also not in dispute. He stated that on those facts, the ITO could have not taken action under section 147(b). Shri Bajoria referring to the decision of the Supreme Court in Kalyanji Mavji Co. v. CIT [1976] 102 ITR 287, urged that the Supreme Court in this decision indicated that section 34(1)(b) of the Indian Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mavji Co.'s case is no longer a good law after the decision in Indian Eastern Newspaper Society's case. 4. Shri Dasgupta, the departmental representative, stated that in order to appreciate the reasoning adopted by the ITO for reopening the assessment under section 147(b) certain dates are necessary. He gave the following dates : (1) Notice under section 148 served on the assessee on 8- 9-1977 (2) The decision in Kalyanji Mavji Co.'s case delivered on 10-12-1975 (3) The decision in Indian Eastern Newspaper Society's case delivered on 31- 8-1979 (4) The date of completion of the reassessment on 15- 3-1978 (5) The date of the order of the Commissioner (Appeals) passed on 28- 9-1981 Shri Dasgupta urged that there was no d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the gain of the assessee as short-term capital gain on 15-3-1978. The assessee did not accept the finding of the ITO on this issue. The assessee came in appeal. The appeal of the assessee was heard on 14-9-1981 and the order was passed by the Commissioner, (Appeals) on 28-9-1981. The decision of the Supreme Court in Indian Eastern Newspapers Society's case was delivered on 31-8-1979 and by this judgment, the Supreme Court did not approve the law indicated in Kalyanji Mavji Co.'s case that action under section 34(1)(b) can be taken for the mistake committed by the ITO due to oversight, inadvertence or mistake. When the Appellate Commissioner took the appeal for the decision, the law on this particular issue indicated in Kalyanji Mavj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case. Shri Dasgupta has referred to certain dates and has indicated that when the ITO assumed jurisdiction, he assumed legally in view of the decision in Kalyanji Mai, Co.'s case. The fact as urged by Shri Dasgupta could not be considered in piecemeal. The assessment proceeding is in continuation till it is finally settled. The assessee did not accept the reassessment order passed by the ITO on 15-3-1978 and the assessee was in appeal before the Commissioner (Appeals). The appeal of the assessee was taken up for hearing oil 14-9-1981. The decision of the Supreme Court in Kalyanji Mavji Co.'s case which was delivered on 10-12-1975, was reconsidered in Indian Eastern Newspaper Society's case which was delivered on 31-8-1979. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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