TaxTMI 
TaxTMI 
1996 (6) TMI 11
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....n 263 of the Income-tax Act, 1961, passed by the Commissioner in relation to the assessment year 1974-75 in the assessee's case? 2. Whether, the satisfaction of the Commissioner as to the erroneous and prejudicial nature of the order passed by the Income-tax Officer as contemplated in section 263 of the Income-tax Act, 1961, is confined only to the issue of notice to the assessee under that section, or should it be a must for the purpose of passing an order under the said section, as has been held by the Appellate Tribunal?" The assessee is carrying on money-lending business. For the assessment year 1974-75, the Income-tax Officer determined the assessee's total income at Rs. 59,050 by his order, dated September 30, 1976. Later, the C....
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....issioner of Income-tax felt that as the sum of rupees one lakh has been shown as a debt owed by the said Dhandayuthapani Films, the Income-tax Officer should be directed to make fresh assessment after obtaining necessary clarification from the assessee in this regard. Accordingly, the Commissioner of Income-tax set aside the assessment and gave a direction to the Income-tax Officer in this matter. Aggrieved, the assessee filed an appeal before the Appellate Tribunal, contending that in the absence of any definite conclusion arrived at by the Commissioner of Income-tax as to the erroneous or prejudicial nature of the assessment order passed by the Income-tax Officer, he should not have set aside the assessment, thereby giving a direction ....
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....ted him to re-do the assessment on this aspect, after getting clarification from the assessee. Hence, it cannot be said that the order passed by the Commissioner of Income-tax was without any finding as to whether the order passed by the Income-tax Officer is erroneous and prejudicial to the interests of the Revenue. Therefore, according to learned standing counsel, there is no infirmity in the order passed by the Commissioner of Income-tax under section 263 of the Act. We have heard learned standing counsel appearing for the Department and perused the records carefully. A scrutiny of the income-tax records of the assessee as well as the other connected file of Dhandayuthapani Films disclosed the fact that the latter owed a sum of rup....
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.... no escapement of income, inasmuch as the investment of rupees one lakh has been admitted by the assessee not in the name of Dhandayuthapani Films, but in the name of Fathima Trust. Dhandayuthapani Films, Coimbatore, being a producer is in the practice of making adjustments in respect of advances received from distributors after the picture is released. As "Vellikizhamai Viradham" was released only in the accounting period, relevant for 1975-76 assessment in the case, of Dhandayuthapani Films, this adjustment has been made only in the accounting period April 1, 1974, to March 31, 1975. This is the reason for the omission on the part of the assessee to admit this investment and on the part of the producer to show this amount under distributo....