Somnath Iyer, J.
1. This is a reference directed by this court under section 66(2) of the Indian Income-tax Act, 1922, at the instance of the assessee and the question of law which is now before us is whether, on the facts and in the circumstances of the case, the Appellate Assistant commissioner was justified in law in enhancing the revised figure of income computed by the Income-tax Officer by a sum of Rs. 3,822.
The material facts are the case :
The assessee was a transport and clearing contractor for the food department of the Central Government. During the relevant accounting year, he operated two lorries for the transportation of goods for the performance of the contract into which he had entered. He also used these lorries for the transportation of goods for others. In respect of the relevant period, the income-tax Officer determined the income from the transport business to be Rs. 6,875 and the income from the lorry business to be Rs. 8,600. But in proceedings under section 34 of the Act when there was a reassessment of the income, the Income-tax Officer came to the conclusion that the income format the transport business was Rs. 15,525 and that the income from the very lorry business was Rs. 4,778. The effect of the reassessment made by the Income-tax Officer was that the original income for the lorry business which was determined to be Rs. 8,600 became smaller to the extent of Rs. 3,822.
2. The assessee preferred an appeal from this assessment to the Appellate Assistant commissioner and that appeal proved unfortunate for him for the reason that in the proceedings in that proved unfortunate for him for the missioner proposed to enhance the income from the lorry business to the original sum of Rs. 8,600 determined by the income-tax Officer. This he proposed to do on the basis of the pronouncement made by this court in S. Natarajan v. Commissioner of Income-tax in which it was explained that an enquiry under section 34 should be confined in a case where it was proposed to assessment or reassessment. He accordingly made the enhancement with he proposed and determined the income from the lorry business to be Rs. 8,600 on no other ground than that the income-tax Officer had no power to reduce that income to a smaller figure.
3. It is clear that this view taken by the Appellate Assistant Commissioner is unsupportable and that the Tribunal should not have shared that view. That decision in Natarajan's case can have no application to the present case in which the notice under section 34 proposed to make a re-assessment of the total income of the assessee in respect of only one business which comprised the transport and the lorry businesses. The assessee did not have two distinct businesses but was carrying on only one business and that business related to the transport and clearing operation for the food department of the Government of India. Although the Income-tax Officer separated the income from what he described as transport business from the income which he called the income from the lorry business, the total income of Rs. 15,475 which was determined by his under the original assessment was the income from one and the same business which he was carrying on and that business, as we have already observed, was the business which concerned the contract into which he had entered with the Government of India.
4. Now, in the reassessment proceedings, the Income-tax Officer increased the income from the transport business and reduced the income from the lorry business but the total income assessed by him was higher than the total income which he had previously assessed. That being so, and since in the notice issued by the Income-tax Officer under section 34 he intimated the assessee that there would be a reassessment of the total income, it was not impossible for the Income-tax Officer to say that the income for the lorry business was smaller but that the income from the transport business was higher and by that process reach the inclusion that the total assessable income was higher then the total income. M previously determined.
5. This, therefore, is a case in with there was a misapplication of the enunciation made by this court in Natarajan's case. The Appellate Assistant commissioner did not, on a perusal of the available material, reach the conclusion that there was any mistake committed by the Income-tax Officer in reducing the income from the lorry business. The only basis for his view was that the income-tax Officer had no competence to make that reduction. But it is clear that that view taken by him was mistaken.
6. So, we answer the question referred to us in over of the assessee and our answer is that the Appellate Assistant commissioner was not justified in law in enhancing the revised figure of income computed by the Income-tax Officer by a sum of Rs. 3,822.
7. The assessee will get his costs. Advocate's fee, Rs. 250.