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Section 147 of the Income-tax Act, 1961 (Corresponding to section 34(1)(a) of Indian Income-tax Act, 1922) - Income escaping assessment - General - Assessment year 1948-49 - Whether power conferred upon ITO under section 34(1)(a) of 1922 Act is to "recompute loss" and when legislation speaks of recomputing loss it means only loss and not income, profits or gains, so that this particular clause cannot empower a general recomputation of income, profits or gains - Held, yes - Whether therefore, in course of re-assessment proceedings properly initiated under section 34(1)(a), assessee cannot claim revision of loss that was determined in original assessment which had otherwise become final and conclusive - Held, yes FACTS For the assessment year 1948-49, the assessee, a karta of a HUF, was assessed under section 23 in respect of his income from the business of speculation which he carried on among other businesses. Later, the ITO came to know that the assessee had suppressed speculation profits. He, therefore, issued a notice against the assessee under section 34(1)(a). At that stage the assessee himself disclosed new figures as to his receipts from the speculation business as also of his payments made in the speculation business. The ITO accepted the figure of receipts and reduced the losses, but rejected the claim with regard to excess payments made in the speculation business. He held that a claim for relief, which was omitted to be made in the original assessment, could not be made in the proceedings under section 34. On second appeal, the Tribunal while upholding the ITO's view, also observed that once the original assessment had become final it was not possible for the assessee to ask for a recomputation of his income as a whole or claim that the items which had become final sould be recomputed especially when the case came under section 34(1)(a). The Tribunal also observed in passing that section 34(2) was inapplicable in cases where proceedings were taken under section 34(1)(a). On reference: HELD Having regard to the provisions of sec. 34(1)(a ), the power conferred upon the ITO is to 'recompute the loss' and when the legislation speaks of recomputing the…

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