Short Overview:

The assessee company filed a loss return along with audited profit and loss a/c, balance sheet and other statements. The ITO without considering the audited financial statements and other statements rejected the loss return filed by the assessee and computed the total income at `nil’.

IT is held that the CIT(A) himself looked into the audited accounts as well as the past assessment records of the assessee-company and, thereafter, computed the total income of the assessee for the asst. yr. 1982-83. The procedure adopted by the CIT(A) was fully justified. In fact, the ITO should have himself followed the same procedure which the CIT(A) did. The ITO was not justified in rejecting the loss return filed by the assessee-company in toto without examining the audited profit and loss account, balance sheet and other statements accompanying the return as well as the past assessment records of the assessee-company.

Conclusion:

Ignoring audited financial statements and other documents accompanying the return and rejecting the `loss return’ and determining `nil’ income is unjustified.