Law:

Section:

Section 147 of the Income-tax Act, 1961, [Corresponding to section 34(1)(a) of the Indian Income-tax Act, 1922] - Income escaping assessment - General - Assessment years 1953-54 and 1954-55 - Whether though ITO has go power to bring in to charge cases following under clause (b) of section 34(1) of 1922 Act in reassessment proceedings validly initiated by issuance of notice under sub-clause (a) of section 34(1) of 1922 Act but such power is subject to limitation that reassessment proceedings initiated should be within period of four years mentioned in that section - Held, yes - Whether one reassessment proceedings are validly initiated by ITO in respect of an item either under section 34(1)(a) or under section 34(1)(b) of 1922 Act, jurisdiction of ITO to reassess is not confined to terms of income in respect of which notice has been issued, but extends to all items of income which have escaped assessment and which may fall either under section 34(1)(a) or 34(1)(b) of 1922 Act - Held, yes FACTS In the original assessment for the assessment years 1953-54 and 1954-55 the interest received by assessee from one 'R' had not been disclosed and the assessment were completed without including these interest receipt. Subsequently in the case of assessment proceedings for the year 1955-56, it was found that 'C' had credited the assessee with certain income as interest income for a number of years. When that interest receipt was included in the income of the assessee for that year, the assessee went on appeal, and the AAC held that the said sum represented interest income for various years and that only Rs. 4,126 should be considered in the assessment for 1955-56. He also held that regarding the earlier years the amounts credited in the books of the debtor as interest due to the assessee should be related to the respective years. Similarly, in the course of the assessment proceedings for the assessment year 1957-58, the ITO found that the loss claimed by the assessee from the sugar mill business could not be allowed as that business had become defunct even prior to the assessment year 1953-54. He was of the view that the loss from the sugar mill business had thus been…

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