2001 (3) TMI 84

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....e following question of law arises for determination in the above two appeals which are disposed of by this common judgment. "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that since the assessment was framed under section 143(1) of the Income-tax Act, the Commissioner of Income-tax was not justified in invoking the jurisdiction under section ....

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....August 26, 1987. It was accepted by the Assessing Officer under section 143(1). However, the Commissioner of Income-tax, on the above facts, came to the conclusion that the above arrangement was entered into in order to evade the tax. The Commissioner further found that the goodwill of Rs. 2,50,000 was credited in the books of the firm which was to be collectively paid to the trust by the incoming....

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....assessment is made under section 143(1), it was not open to the Commissioner to invoke section 263 of the Income-tax Act. The Tribunal further came to the conclusion that since the proposed addition made by the Commissioner was not within the ambit of section 143(1), the order of the Assessing Officer cannot be considered as erroneous and the Commissioner erred in assuming jurisdiction under se....

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....r to invoke section 263 of the Income-tax Act. In the present matter, the above facts clearly show that the assessees claimed deduction in respect of the interest amount paid to the trust on the goodwill during the assessment years 1986-87, 1987-88 and 1988-89 whereas under the partnership deed, the goodwill amount was payable by incoming partners and, therefore, no amount was payable by the fi....