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Commissioner Of Income-Tax vs K. Kesava Reddiar on 10 February, 1989

He relied on the decision of the Kerala High Court in CIT v. K. Kesaua Reddiar [1989] 178 ITR 457. It is not as if the ITO was changing his views on the same set of facts when he was in seisin of reassessment. He looked into each and every aspect of the case and held that in the absence of verifiable records for in the absence of need for incurring the expenditure certain disallowances were called for and he made such disallowances. It cannot be construed as a mere change of opinion on the same set of facts. Such a proposition may be relevant for testing the initiation of reassessment proceedings but once the reassessment is made, certainly the ITO can look in great detail and need not confine himself to escaped income only. On merits, he supported the disallowances.
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