Law: Income Tax Act, 1922

Section: 33

Law: Income Tax Act, 1922

Section: 33

Section 253, read with section 250, of the Income-tax Act, 1961 [Corresponding to section 33, read with section 31, of the Indian Income-tax Act, 1922] - Appellate Tribunal - Appealable orders - Assessment year 1954-55 - Assessee-company, which was dealing in shares, declared certain loss on account of depreciation in value of shares in stock and on sale - ITO disallowed assessee's claim - On appeal AAC did not accept method of valuation of shares adopted by ITO and directed ITO to make valuation afresh - None of assessee or revenue challenged method suggested by AAC and ITO made afresh assessment in accordance with valuation prescribed by AAC - On appeal, assessee challenged only arithmetical errors committed by ITO - However, on second appeal assessee challenged before Tribunal method of valuation of shares adopted by authorities below - Whether since earlier order passed by AAC stipulating method of valuation, was not challenged by assessee, same had become binding on both parties and, hence, assessee was not competent to challenge it in appeal against arithmetical error made in final order - Held, yes FACTS The assessee-company was a shareholder of several companies. For the assessment year 1954-55, the assessee had claimed loss on account of the depreciation in the value of the shares in the stock as well as on sale of shares. The AAC did not accept the method of valuation of shares. He remanded matter to the ITO with direction to make valuation of share at the cost or at the market price. The order of AAC was neither challenged by the assessee nor by revenue. The ITO made a fresh assessment order as directed by the AAC. On appeal, the assessee challenged before the AAC the arithmetical errors in the order of the ITO it was only on second appeal, before the Tribunal the assessee challenged the method of valuation adopted. The Tribunal held that the respective contentions of the assessee and of the department were determined by the first order of the AAC made on 27-2-1958, and since there was no appeal against that order either by the assessee or by the department, no part of it could be challenged in the course of the appeal before the Tribunal. It was…

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