1993 (12) TMI 38

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....nk in the interest bf the general public in exercise of his powers under article 240 of the Constitution of India. Regulation 6 is as follows : " 6. (1) For the purposes of enabling the Custodian to discharge the obligations imposed on him under this Regulation, the Central Government may, after due appropriation made by Parliament by law in this behalf, grant to the Custodian such loans on account of either of the banks as it may deem fit. (2) The terms and conditions on which such loans may be granted shall be determined by the Central Government from time to time, and it shall be competent for the Central Government, if it is necessary so to do, to adjust any loan or any portion thereof against any subsidy which the Central Governm....

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....otice under section 148 of the Income-tax Act was issued for reopening the assessment, inter alia, for the assessment year 1970-71. In the reassessment proceedings, the Income-tax Officer held that the subsidy of Rs. 3,50,238 was the assessee's income. The Income-tax Officer did not take into account the loss or the expenditure shown in the revised return or the original return. In appeal the Commissioner of Income-tax upheld the Income-tax Officer's finding that the subsidy was the assessee's income. He, however, directed the Income-tax Officer to take into consideration the loss of Rs. 3,46,952 for the purpose of reassessment. The Tribunal has upheld the order of the Commissioner of Income-tax and has dismissed the appeal. The following q....

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....ut forward claims for deduction of any expenditure in respect of that income. . . ." In other words, while the assessee cannot reagitate claims already assessed, it is open to the assessee in reassessment proceedings to put forward claims for deductions for any expenditure which is relatable to the income which is sought to be assessed as escaped income in the reassessment proceedings. In the present case, the income in the form of subsidy is paid to the assessee in connection with the assessee's liability to incur the expenditure of paying interest on the loans which the assessee has taken from the Central Government. This is clear from the returns which are filed by the assessee which show the interest paid by the assessee on Central G....