TaxTMI 
TaxTMI 
1989 (4) TMI 2
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....s under section 148 for each of the assessment years 1959-60 and 1960-61 was justified ? (2) Whether the Tribunal was right in law in holding that the original assessment for each of the years having been made on the agents, the real assessment proceedings could not be initiated against the assessee direct ?" The appellant assessee is a non-resident sterling company whose business consists in the purchase of tobacco from India and its sale outside. The tobacco is sold directly on the assessee's own account and for commission on behalf of others. The purchases of tobacco were effected through the British India Corporation Ltd., Guntur, who were appointed agents of the assessee under section 43 of the Indian Income-tax Act, 1922. For th....
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....year had disclosed that the overhead expenses were attributable to the entire business of the assessee, including the business as commission agents, and not merely for the business of purchase and sale of tobacco. The Income-tax Officer believed that he ought to have first computed the proportionate overhead expenses in relation to the total profits by taking the proportion which the profits bore to the total of profits and commission and then worked out the proportionate overhead expenses for the profits arising out of the Indian sales. On that basis, he determined that the adjusted profits would be 160 pounds (Rs. 2,253), and that this would have to be substituted in place of the loss of Rs. 37,680 arrived in the original assessment. Simi....
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....d further as the assessments had been made originally on the agents, it, was not open to the Income-tax Officer to proceed directly against the assessee. Accordingly, the Appellate Tribunal allowed the appeals and set aside the reassessments made on the assessee. At the instance of the Revenue, the Appellate Tribunal referred the two questions of law set forth earlier to the High Court of Andhra Pradesh for its opinion. On the first question, the High Court held that it was not mere change of opinion on the part of the Income-tax Officer pursuant to which he made the reassessments, but that the Income-tax Officer had received information subsequent to the original assessments from the records of the subsequent assessment year that the ov....
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....iness of purchase and sale. It is true, as the High Court has observed, that this information could have been acquired by the Income-tax Officer if he had exercised due diligence at the time of the original assessment itself. It does not appear, however, that the attention of the Income-tax Officer was directed by anything before him to the fact that the overhead expenses related to the entire business. The information derived by the Income-tax Officer evidently came into his possession when taking assessment proceedings for the subsequent year, In the circumstances, it cannot be doubted that the case falls within the terms of clause (b) of section 147 of the Act, and that, therefore, the High Court is right in holding against the assessee.....