TMI Blog1980 (8) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered in the original assessment and which was set aside by the Appellate Assistant Commissioner ? The assessee is an individual who was deriving income from property as well as by way of a share from partnership business, apart from his own separate business in timber and petrol agency. In the return filed by the assessee for the assessment year 1963-64, for which the accounting period was the year which ended on March 31, 1963, the assessee had put forward a claim for deduction of interest amounting to Rs. 60,749 on the basis that he had effected certain borrowals from Marwadi hundi brokers. On an investigation conducted by him into the said claim of the assessee the ITO found that the borrowals referred to by the assessee purported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit was approximately Rs. 4,00,000. The AAC, therefore, felt that there was some justification in the submission of the assessee that he was withdrawing and are depositing moneys depending on the needs of the business. Since this crucial aspect in the matter had not been gone into by the ITO before he finalised the assessment disallowing the claim for deduction for the interest payment, the AAC set aside the assessment and directed the ITO " to re-do the assessment after taking into account all the aspects of this case ". Inasmuch as he was setting aside the entire assessment, the appellate authority declined to consider the further point agitated by the appellant before him concerning the addition of Rs. 10,000 as gross profit. Subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his contention that the ITO had acted without jurisdiction in making the impugned addition in the course of the reassessment proceedings, since that was totally outside the scope of the remand order. The Tribunal rejected the aforesaid contention put forward by the assessee in the cross-objections relating to the scope of the jurisdiction exercisable by the ITO in the proceedings after remand. At the instance of the assessee, the question aforesaid was referred to this court for determination. The language of s. 251 of the Act (this provision corresponds to s. 31 of the Indian I.T. Act, 1922) is wide enough to enable the AAC to correct the ITO not only in regard to matters about which the assessee makes grievance, but also with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the enquiry by the ITO to any specified aspect or issue. But, so long as that has not been done but the order of assessment has been set aside in toto and the ITO directed to redo the assessment afresh, the powers of the ITO are untrammelled by anything that he might have said or omitted to say in the original order of assessment which was set aside by the AAC. This is the view that has been taken by the Allahabad High Court in J. K. Cotton Spg. Wvg. Mills Co. Ltd. v. CIT [1963] 47 ITR 906 and Abhai Ram Gopi Nath v. CIT [1971] 79 ITR 339, with which rulings we are in respectful agreement. Tested in the light of the legal position explained above, the contention of the assessee that the ITO acted without jurisdiction in going into the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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