AI Drafter 
TaxTMI 
TaxTMI 
1974 (8) TMI 18
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....ck for the assessment year 1959-60 ? " The question relates to the assessment year 1959-60, the corresponding year being S.Y. 2014. The assessee is an individual doing business in hardware. He started the business in S.Y. 2011, and he was assessed for the assessment years 1956-57, 1957-58 and 1958-59 in respect of the income from his said business. The assessment for the year 1959-60 was completed on 29th of July, 1961, on a sum of Rs. 26,554. It appears that in the course of the assessment proceedings for the assessment year 1960-61, the Income-tax Officer found that the assessee had valued his stock neither at the cost nor it the market price, nor at " cost or market price whichever was lower ". For that assessment year an addition ....
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.... the Income-tax Officer. The assessee carried the matter to the Tribunal and it was contended that while adjusting the under-valuation of the closing stock in S.Y. 2014, relevant to the assessment year 1959-60, the income-tax authorities should have gone a step further and re-valued the opening stock as well. The Tribunal, however, rejected the contention of the assessee on two grounds. It first took the view that in tracing the under-valuation to its original source there would be a difficulty of the bar of limitation prescribed by section 34 and, secondly, it held that in the revised return, which was filed by the assessee before the Income-tax Officer pursuant to the notice under section 34 of the Act, the assessee had merely revalued th....
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.... limitation, which was regarded by the Tribunal as an insuperable difficulty, did not arise at all in the instant case inasmuch as the reassessment that was made by the Income-tax Officer was for the assessment year 1959-60, and it was in respect of the opening stock of that very assessment year that an adjustment on account of under-valuation of the opening stock was sought by the assessee. It is not possible to accept this contention of Mr. Patil for the reasons we shall presently indicate. There is no doubt that the correct position in law has been indicated by the Privy Council in its decision in Commissioner of Income-tax v. Ahmedabad New Cotton Mills Co. Ltd. The principle has been enunciated by the Privy Council thus: " When th....
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....s less ", and this was so both in regard to the opening stock as also the closing stock for the said period. When this aspect was noticed by him, the Income-tax Officer felt that income had escaped assessment for the assessment year 1959-60 inasmuch as the opening stock for the accounting period relevant to the assessment year 1960-61 would be the closing stock for the accounting period relevant for the assessment year 1959-60 and, therefore, he issued a notice under section 34 of the Act to the assessee. It was in response to this notice that the assessee himself filed a revised return in which he accepted the aspect which was realised by the Income-tax Officer and himself revalued the closing stock for the assessment year 1959-60. It was,....
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....r years was filed before the Tribunal suggesting that the real under-valuation was in S. Y. 2011 which under-valuation had progressively increased during the subsequent years. Since the revised return in which the assessee had shown revaluation of the closing stock for the accounting year relevant to the assessment year 1959-60 had been filed by the assessee himself, which was accepted by the lower authorities, we do not think that the assessee could have been allowed to raise this contention for the first time at the appeal stage and the Appellate Assistant Commissioner as well as the Tribunal, in our view, were right in rejecting that contention. It was urged by Mr. Patil that the bar of limitation which has been indicated by the Tribu....