I.T.A. NO. 9796/LB/DB OF 1991-92 Versus I.T.A. NO. 9796/LB/DB OF 1991-92

ORDER

1. KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER).-- -In this assessee's appeal cancellation of order under section 66-A has been contested to be unjust by the assessee.

2. The A.R. has brought our attention to the relevant para. from the order of the I.T.O. which became base for cancellation at page 3 of the assessment order. For ready reference the same is reproduced as follows:-

3. "It has been observed that from the very start of import business the goods are being import from Taiwan whereas the Lady Director has visited Madina, Jeddah, London, New York and Sanfrancisco where there in no possibility whatsoever to explore foreign market. In fact the foreign countries visited was wholly and exclusively of personal nature and not covered under section 23(1)(XVIII). However, taking a lenient view one-half of Rs.1,67,317 i.e., Rs.83,658 is disallowed. "

4. The above observation of the I.T.O. he said cannot be considered as erroneous as the learned I.T.O. after application of his mind has disallowed one-half of the claim. He argued that the usage of word "However, taking lenient view one-half of, .... is disallowed "clearly envisaged that he was not made any 'error'. He has diligently and vigilantly opted to allow a part of the claim. The word erroneous has been defined in so many cases and the higher Courts do agree that the same is applicable even on facts some time, through mostly if the, error is of law: There is also unanimity that the same cannot be expanded over to the circumstances, wherein the Assessing Officer has consciously applied his mind. In view thereof the cancellation of the I.T.O. is not justified.

5. The order of the Income Tax Officer is hereby restored while the order under: section 66-A is cancelled.

6. C.M.S./390/Trib. Order accordingly.