1982 (1) TMI 79 - AT - Income Tax

Appellate Tribunal upholds separate previous years for income from different employers

The Appellate Tribunal upheld the Commissioner's decision in favor of the assessee, allowing for separate previous years for income received from ... Previous Year Issues:Determining separate previous years for income from different employers.Analysis:The appeal involved a dispute regarding the assessment year 1978-79 where the assessee, an individual earning income from salaries, argued for separate previous years for income received from two different employers. The assessee contended that the salary from the former employer belonged to the previous year ending 31-3-1978, while the salary from the new employer should be assessed in the subsequent year. The Income Tax Officer (ITO) disagreed, asserting that the assessee could not have two separate previous years for the same salary income and included the new employer's salary in the assessment for the year ended 31-3-1978.The assessee appealed to the Commissioner (Appeals), citing relevant case laws to support the claim for different previous years for distinct sources of income. The Commissioner (Appeals) agreed with the assessee, emphasizing that section 3(3) of the Income-tax Act allowed for different previous years for separate sources of income. Additionally, the Commissioner highlighted the option provided under section 3(1)(b) for the assessee to select a different previous year for a new source of income, which the assessee had duly exercised.During the appeal, the departmental representative argued that the previous year should align with the financial year for individuals not maintaining accounts, referencing case law to support this position. However, the representative of the assessee supported the Commissioner's decision, emphasizing the assessee's right to choose the previous year for different sources of income as per the provisions of the Income-tax Act.Upon considering the arguments and facts presented, the Appellate Tribunal upheld the Commissioner's decision, noting that income from different employers could constitute separate sources of income, allowing for distinct previous years as per section 3(3). The Tribunal found merit in the assessee's exercise of the option under section 3(1)(b) for the new source of income, in line with relevant case laws supporting such interpretations. Ultimately, the Tribunal dismissed the appeal, affirming the order of the Commissioner (Appeals) in favor of the assessee.