1996 (1) TMI 9

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....? " The assessee is a firm. The assessment in question relates to the assessment year 1961-62, governed by the Indian Income-tax Act, 1922. Since it did not apply for registration, the Income-tax Officer completed the assessment treating the assessee as an unregistered firm. He computed the total income at Rs. 59,623 which included the sum of Rs. 50,000 as income from other sources which was agreed to by the assessee (see paragraph 3 of the statement of case). The assessee's appeal to the Appellate Assistant Commissioner was dismissed and so was the further appeal to the Tribunal. The main and only contention of the assessee before both the appellate authorities was : inasmuch as a partner of the assessee-firm, Sri Manoharlal, has bee....

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....nable to ascertain the precise reasoning on the basis of which the question has been answered by the High Court in the negative. We have, however, heard counsel for both the parties and we presume that in the opinion of the High Court, the assessment on the firm is invalid for the reason that the share income of a partner was included in his individual assessment which means that the Income-tax Officer has exercised the discretion, the option, available to him under the 1922 Act. In ITO v. Ch. Atchaiah [1996] 218 ITR 239 (Civil Appeal No. 2513 of 1977 delivered on December 11, 1995), this court has dealt with the position of law relevant in this behalf both under the 1922 Act and the present Act. Under the 1922 Act, the Income-tax Office....