ADDITIONAL COMMISSIONER OF INCOME TAX, GUJARAT, I, AHMEDABAD versus M/S. GURJARGRAVURES PRIVATE LIMITED

Citation: [1978] 2 S.C.R. 169 · Decided: 08-11-1977 · Supreme Court of India · Bench: A.C. GUPTA · Disposal: Appeal(s) allowed

Judgment (excerpt)

169 
ADDITIONAL COMMISSIONER OF INCOME TAX, 
GUJARAT, I, AHMEDABAD 
A 
v. 
M/S. GURJARGRAVURES PRIVA1E LIMI1ED 
November 8, 1977 
(A. C. GUPTA AND P. N. SHINGHAL JJ.J 
Income-tax Act, 
1961, s.251(1)(a) 
equivalent 
to s.31(3) of A.ct of 
1922-Powers of 1he Appellate Assistant Commissioner in dispcsing 
of an 
ap[J<Ql-Scope of, 
B 
The respondent assessee is a Company carrying on its business of copper 
engraving and manufacturing labels. For the assessment year 
1963-64, 
the 
assessee did not ask for any ex.emption in respect of a portion of its 
profits 
C 
·under section 84 of the Income-tax Act, though in the subsequent years 
the 
........ did aak and the Income-tax Officer accepted it. Dismissing the appeal 
against the orders of the assessments for the year 
1963-64, 
the 
Appellate 
Assistant Commissioner, therefore, held that the question of error on the part 
of the Income-true Officer did not arise as no claim for exemption under sec-
.tion 84, which was made for the first time before him, bad been made before 
the Income-tax Officer. The Tribunal, on further appeal, took a different view 
and held that "since the entire assessment 
was open before 
the Appellate 
Assistant Commissioner" there was no "reason for not entertaining the claim of 
D 
the assessee.'' The Tribunal directed the Income-tax Officer to allow appropriate 
relief under section 84 of the Act. On a reference made at the instance oC 
·Commissioner of Income-tax, the Gujarat High Court answered it a2ainst the 
·revenue and in favour of the assessee. 
Allowing the appeal the Court, 
HELD : (l) 'Consideration' does not mean incidental or collateral examtna-
tion of any matter by the Income-tax Offi.cer in the process of a5Sessment. 
E 
There must be something in the assessment order to show that the Income-tax 
-Ofttccr applied his mind to the particular subject matter or the particular 
source of income with a view to its taxability or its Iion-taxability. If an 
item of income 
noticed 
by the 
Income-tax Officer, 
but not examined 
by him from the point of view of its taxability or non-taxability cannot be 
said to have been considered by him, the Income-tax Officer examining a 
portion of the profits from the point of view of its taxability should not be 
deemed to have also considered the question of its non-taxability. [172 F-G] 
Commissioner of Income-tax (Central), Calcutta. v. Rai Bahadur Harcturray 
Motilal Chamaria (1967) 66 J.T.R. 443 applied. 
Commissioner of Income-tax v. Shapoorji Pullonji Mistry ( 1962 44 l.T.R. 
891; Narro11das Manordass v. Comntissioner of Income-tax (1957) 31 l.T.R. 
909. referred to. 
F 
(2) In the instant case; (a) on the facts of the case, the question referred 
to the1 f1if!:h Court should have been answered in the negative; (b) Neither any 
claim was made by the assessee before. the Income-tax Officer nor was there any 
G 
material on record supporting such a claim; ( c) in the statement of the case, 
drawn uD bv the Tribunal there is no basis for an assumption by the High Court 
that a oortion of the profit in the relevant assessment year was exempt from 
-tax under section 84 and that the assessee failed to claim an exemption to which 
he was admittedly entitled. From that admission that in the years subsequent 
to the aRsessment year in question, a relief under section 84 had been allowed 
·to the assessee, it cannot be presumed that the prescribed conditions justifying a 
·claim for exemption under the· section were aJso fulfilled in an earlier vear. 
[172 A-C, G-H 173 A-Bl 
H 
CIVIL APPELLATE JURISDICTION : Civil Appeal No., .1655 of 
1972. 
-'"T.'"<f 
170 
SUPREME COURT REPORTS 
[1978] 2 s.c.R. 
A 
From the Judgment and Order dated 13th/14th September. 197ll 
of the Gujarat High Court in Income Tax Reference No. 2/70. 
B 
c 
B. B. Ahuja and R. N. Sachthey for the Appellant. 
G. L. Sanghi, Ravinder Narain, D. N. Mishra, J. B. Dadachanii 
and 0. C.. Mathur for t]Je Respondent. 
The Judgment of the Court was delivered by 
-
GUPTA, J.-This appeal by the, Additional Commissioner of In-
come-tax, Gujarat, I, Alimedabad, on a certificate under section 261 
of the ~ncome-t~x Act, 1961 gra1!_ted by the Gujarat High Court, rai~es 
a questmll relating to the powers of the Appellate Assistant Commis-
sioner in disposing of an appeal. 
The respondent, a company carrying on the business of copper 
engraving and· manufacturing of !ables, appealed. to the 
Appellate 
Assistant Commissioner against an order of 

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