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TMI Blog1988 (7) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... of ss. 80P(2)(a)(iii) and 80P(2)(a)(iv). The details of this as filed in the computation of income annexed with the return of income are as follows: Rs. "1. Income from sale of produce of members as shown in Arhat a/c 4,706.96 2. Profit in sale of fertilizer to members . 9,19,826.50 9,24,533.46 Less —Propotionate expenditure . Gross income 11,67,800 . Gross expenses 3,00,000 . Propotionate expenses . 9,25,000 = 30,000 = 2,37,600.00 11,68,000 6,86,933.46 During the course of the original assessment proceedings, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempted income amounted to Rs. 2,37,600 with the result that the net amount of which exemption was sought amounted to Rs. 6,88,933. The ITO who framed the initial order after looking into all these facts estimated the exempted income at Rs. 6,50,000 against the assessee's claim of Rs. 6,86,933 and completed the assessment on 28th Feb., 1977 determining the total income at Rs. 2,03,925. Subsequently, the record of the appellant seems to have been audited by the internal audit who came to the conclusion that the basis of this figure of Rs. 9,19,826 being profit on sale of fertilizer to its members was not indicated by the appellant and since there was no separate trading a/c in r/o sales to members the profit on sale of fertilizer to is membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings does not deserve to be confirmed on the limited ground as, according to her, reliance on the case of Indian and Eastern Newspaper Society was misplaced in the instant case. The ld. Counsel for the assessee Mr. Ram Kumar had nothing to say except relying on the order of the CIT (A). 5. After taking into consideration the rival submissions and going carefully through the record, we find that the CIT (A) has given following office note in his order : "The ITO had informed the audit that there was no substance in the audit objection. This was not acceded to by the audit vide their letter No. 24145 dt. 14th March., 1980 on the ground that the list of the members given by the assessee at pages bearing Sr. Nos. 38 and 39 does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available at the time of original assessment, as is apparent from para 2 of the CIT (A)'s order, extracted and placed above, it is apparently a change of opinion. 7. Coming to proceedings under s. 147(b) having been initiated on the basis of audit note whether it is an objection pertaining to facts or law, would arise afterwards. But initially in case the audit objection is objected to by the Revenue itself and found to be wrong, the very basis of proceedings is taken away and the same cannot stand. 8. Then coming to merit, in the light of the Punjab and Haryana High Court decision in case of the Punjab State Cooperative Society Marketing Federation Ltd., the Revenue has no case. The order of the CIT (A) is, therefore, confirmed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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