TaxTMI 
TaxTMI 
1977 (11) TMI 46
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....ed to us, the first of them at the instance of the Commissioner and the second one at the instance of the assessee. "(1) Whether, on the facts and in the circumstances of the case, the Income-tax Officer had jurisdiction to act under section 154 of the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the assessment order for 1959-60 passed on August 20, 1960, could be rectified under section 154 of the Income-tax Act, 1961 ?" A few facts may be stated: We are concerned in this reference with the assessment year 1959-60, the accounting period being S.Y. 2014 (ending on 11th November, 1958). The assessee is an individual and carries on business in iron and hardware and also manufactures and sells ....
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....ons, the Income-tax Officer passed an order under section 154 adding back the development rebate originally granted. The assessee appealed against the order of rectification, but the Appellate Assistant Commissioner, agreeing with the Income-tax Officer, dismissed the appeal, holding: (i) as regards the motor car, there was nothing on record to suggest that the vehicle was exclusively used for business; (ii) the development rebate reserve had not been created specifically by debiting the profit and loss account. The creation of a reserve by any other method would not satisfy the requirements of law, and (iii) the previous year ended on 10th November, 1958, for which the return of income and balance-sheet were filed on August 6, 1959. The ....
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....e Income-tax Officer's action could be upheld under section 35, in which case the assessee would have even lost the right of appeal. We think that Shri Mulla is not right on this point and if there was an error in fact, there was no legal bar to the Income-tax Officer's proceeding under section 154. But Shri Mulla is right in arguing that there was no error in this case within the meaning of section 154. Before the assessment was completed by the service of the notice of demand on the assessee, the revised balance-sheet was on record. This balance-sheet showed a reserve. The facts clearly support the assessee's statement that the revised balance-sheet was filed to remove the technical objection raised during the course of assessment proceed....