Law:

Section:

Section 150 of the Income-tax Act, 1961-Reassessment-Forgiving effect to a finding or direction in appeal, reference or revision-AAC deleted part income from undisclosed sources in assessment year 1960-61 as it related to assessment year 1959-60-Whether, in assessment for assessement year 1959-60 reopened to give effect to appellate order, addition to trading account permissible, besides addition of income from undisclosed sources-Held, no Facts The assessee, a registered firm, was carrying on business in cloth. For the assessment year 1959-60, it returned a loss of Rs. 5,401. The assessment was completed on 14-3-1960 at Rs. 9,560 after disallowing certain amounts toward interest and bad debt. No addition was made to the gross profit. The assessment for the assessment year 1960-61 was also completed on 14-3-1960 after making an addition of Rs. 1,41,729 as income from undisclosed sources. On appeal against the assessment for the assessment year 1960-61, the AAC held that, out of the addition of Rs. 1,41,729, a sum of Rs. 90,721 represented receipts in the assessment year 1959-60 and, accordingly, deleted this sum from the assessment for the assessment year 1960-61. The ITO consequently reopened the assessment for the assessment year 1959-60 after obtaining permission from the Commissioner and issued a notice under section 148 on 16-3-1968. In reassessment, the ITO added a sum of Rs. 88,173 as income from undiclosed sources and a further sum of Rs. 78,793 for deficiency in the gross profit. On appeal, the AAC upheld the addition of Rs. 88,173 but deleted the addition of Rs. 78,793 to the gross profit on the ground that the assessment had been reopened only to tax the amount deleted from the assessment for the assessment year 1960-61 so that no other addition could be made. On revenue's appeal against the deletion of Rs. 78,793, the Tribunal held that the reassessment was made not under section 147(a) but under section 150 so that no addition could be made other than to give effect to the finding of the AAC in the assessment year 1960-61. On reference, the revenue contended (i) that once the assessment was reopended, be it under section 147 or 150, the entire…

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