9911796707
TMI Blog1976 (2) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... the fields for the use of the cattle as part of its salvage farm programme. In making the assessments for the asst. yrs. 1964-65 to 1967-68 under s. 143(3) on 28th Sept., 1968 the ITO disallowed losses in salvage farm amounting to Rs. 17,138, Rs. 15,009, Rs. 14,464 and Rs. 17,577 respectively on the ground that the above losses being 1/4th of the loss in the salvage farm related to agricultural operations and hence not allowable as deduction against its total income. By orders dt. 22nd Sept., 1972 passed under s. 154 of the IT Act, 1961 the ITO held that in the original assessment orders referred to above a mistake has been committed by wrong application of law. He observed that the above losses allowed in the original assessments related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the light of the decision of the Supreme Court in the case of T.S. Balram vs. Volkart Bros. & Ors, reported in 82 ITR 50 (SC). He found that the ITO who made the original assessment had come to the conclusion that the assessee was not entitled to the deduction of the entire loss from the salvage farm and that a portion related to agricultural operations the loss from which was not admissible as deduction in the assessment. that the loss in maintenance of stud bulls was allowed separately as claimed in the profit and loss account, that the decision of the successor ITO that the activities of the assessee in having the salvage farm where cows and she-buffalows were looked after and in maintaining stud bulls would amount to carrying on bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properly rectified by the ITO. He relied upon the decision of the Supreme Court in the case of M.K. Venkatachalam, ITO, & Anr. vs. Bombay Dyeing and Manufacturing Co. Ltd., reported in (1968) 34 ITR 143 (SC) and the decision of the Supreme Court in the case of ITO, Allwaye vs. Asok Textiles Ltd., reported in (1961), 41 ITR 732 (SC). He further submitted that the AAC erred in following the decision of the Supreme Court in the case of T.S. Balaram vs. Volkart Brothers, reported in, as the facts of that case were different from the facts of the instant case. 4. On behalf of the assessee reliance was placed on the order of the AAC. The learned representative for the assessee submitted that there was no mistake apparent from the record warrant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the salvage farm which was done only at the insistence of the government and that as a matter of fact this activity of the salvage farm was stopped altogether with the end of 1971-72. He strenuously urged that there was no mistake, much less a mistake apparent from the record to invoke the jurisdiction of s. 154. He, therefore, urged that the order of the AAC should be confirmed. 5. We have carefully considered the rival submissions and the records brought to our notice. It is common ground that the assessments for the years under appeal were made originally under s. 143(3) on 28th Sept., 1968. It is also noticed that in making these assessments the ITO had discussions with the representatives of the assessee. The assessee had also fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by means of a government subsidy amounting to Rs. 6,972 per year which has been credited in the salvage farm account. On about 15 acres of the land there are irrigation facilities (with the help of the three existing wells). For the rest, the farm depends only on rains. The green fodder grown on the lands is grown as part of the business activity of the society and the cattle which derive the benefit from the lands on account of the fodder are not used for agricultural purposes. hence it is submitted that the activities concerned with this salvage farm are entirely in the nature of business activities and therefore it is requested that the net result in the salvage farm account should be taken as the result of a business activity". The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of such a finding the application of s. 10(27) does not arise. We are, therefore, clear in our minds that there was no mistake of law in the order of original assessments passed by the ITO as pointed out by Shri Raghavan for the Revenue. As pointed out by the Supreme Court in T.S. Balaram vs. Volkart Bros. Reported in, a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. The ITO who made the original assessments was fully aware of the entirety of the facts of the case as set out above and he has not given any finding on the said facts that the assessee was carrying on the business of l ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
