9911796707
TMI Blog1984 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... 29, 1975. The departmental appeals were dismissed and the assessee's appeals were allowed in part. Thereafter, the assessee filed three applications under section 256(1) of the Income-tax Act, 1961, for these assessment years and all these applications were decided by one composite order dated June 8, 1978. The assessee filed only one reference application. There were some office objections which led to the return of the case; after rectification of the same, the case came before a Bench of this court on January 16, 1980, for admission purposes. The Bench passed an order stating that separate income-tax cases had to be filed for each year and the counsel for the petitioner undertook to file such applications. Two weeks' time was granted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in this case. In this connection, it has been brought to our notice that only one order was passed covering all the six appeals for the three assessment years in question and no separate order was passed such as is normal in the ordinary civil courts. The normal practice in the civil courts is to have one composite order along with short separate orders, but it appears that the Tribunal merely passes one single order. When the reference applications were filed under section 256(1), they were also decided by one composite order. The contention, on behalf of the learned counsel for the assessee, is that there can be a bona fide error by counsel as to whether one application under section 256(2) is to be filed or, whether three applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e moved. As there was only one order covering all the years, it may legitimately be said that one application can suffice to cover ill questions of law even if they arise for several years. Thus, one application serves the purpose. It may also be said that even if there is a blunder by filing one application instead of three applications, it cannot be said that that I one application is beyond time because it was filed within the period of limitation. For the purpose of seeing whether such a contention is bona fide or not, we have to examine, whether on a reading of the section, it can legitimately be inferred that only one application is necessary. No doubt, the wording of the section shows that one application may be filed and if there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice of learned counsel on January 16, 1980, when the case came before the Bench and then the court granted two weeks' time within which time the two additional applications were filed. So, this can be treated as a case in which even the Registry did not raise the objection and the court granted time for the rectification of the error within which time the two additional applications under section 256(2) were filed. We would thus condone the delay in the circumstances of this case. This would mean that the two applications, C.M. No. 156 of 1980 in I.T.C. No. 29 of 1980, and C.M. No. 158 of 1980 in I.T.C. No. 30 of 1980, would stand allowed. One additional point urged by the learned counsel for condoning the delay and also for the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee appealed to the Appellate Assistant Commissioner who came to the conclusion that some amount had to be disallowed, but not the same as found by the Income-tax Officer and so he reduced the amount for each year. It was urged before the Tribunal in a further appeal that the assessee had its own self-generated funds as well as borrowed money and there was nothing to show that payments were made out of the loans. If payments were made out of the mixed funds, it was claimed that the assessee could get the benefit. The Tribunal has partly accepted this contention of the assessee and given certain directions to the Income-tax Officer to compute the amount. In its application under section 256(1), the assessee had claimed that the Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e increase in the advances to the partners was Rs. 20,17,861, thus showing that the increase in advances from third parties was correspondingly represented by the increase in advances to the partners. In other words, the assessee-firm borrowed money on interest and advanced the same without interest to its partners. The Income-tax Appellate Tribunal and the Appellate Assistant Commissioner found that the entire advance was not to be treated as a loan for non-business purposes and on an examination of the facts revealed by the accounts of the firm, the Tribunal came to the conclusion that the partners were entitled to adjust the losses in the firm's business and also the profits and only the other withdrawals had to be treated as interest-fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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