1994 (12) TMI 63

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....he petitioner had submitted its return of income on August 31, 1978, declaring its total income at Rs. 27,040. Thereafter, a notice was issued by the respondent under section 143(2) of the Act to verify the correctness and completeness of the return filed by the petitioner. By its letter dated January 7, 1981, the petitioner clarified certain queries raised by the respondent and, ultimately, by an order dated March 11, 1981, the respondent assessed the income of the petitioner at Rs. 59,926 under section 143(3) of the Act. Being aggrieved by the said order, the petitioner filed an appeal before the appellate authority. During the pendency of the appeal, the respondent issued a notice under section 154/155 of the Act alleging that there w....

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....y 27, 1984, issued by the respondent under section 148 of the Act proposing to reassess the income of the petitioner for the assessment year 1979-80. Hence, the said notice is challenged in this petition. Contentions : It is contended by the petitioner that, in both the cases, it had disclosed all the primary relevant facts to the Department. It had also replied promptly to the queries raised by the respondent in the proceedings under section 143(2) of the Act. After verification of reasons and materials on record, the respondent had passed an assessment order, yet without there being any reasons for reopening the assessment, the respondent had issued notices. At the time of admission of these matters, the court had granted interim....

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....ssment order, which is produced on record, it is clear that all these aspects were considered by the assessing authority. The assessing authority has disallowed the following expenses, including interest: Rs. Electric expenses 460 Advertisement expenses 391 The excess debit in profit and loss account 279 ------ 1,130 ------ The assessing authority has also added certain other items as discussed in the assessment order. Further, as stated in the assessment order itself, income was assessed by considering the fact that the accounting method of the petitioner was the mercantile system. Once the mercantile system of accounting is maintained by the petitioner, there was no reason for the respondent, nor has any reason bee....