Khanna, J. - (1.) This appeal on certificate by the Commissioner of Income-tax is against the judgment of the Calcutta High Court whereby the High Court answered in a reference under the Income-tax Act the following question in favour of the assessee-respondent and against the revenue:"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in making the re-assessment under Section 147 (b) of the Income Tax Act, 1961, the Income-tax Officer could not depart from the method of computation permitted in Rule 33 of the Income-tax Rules and followed in the original assessment, and adopt an alternative method of computation also permitted under the said Rules (corresponding to Rule 10 of the Income-tax Rules, 1962 )"
(2.) The matter relates to the assessment year 1959-60, the corresponding financial year for which ended on March 31, 1959. The assessee is a non-resident company carrying on business as construction engineers. The Income-tax Officer made the original assessment on May 31, 1960 on a total income of Rupees 21,49,169. On November 5, 1962 the Income-tax Officer initiated proceedings under Section 147 (b) of the Income Tax Act, 1961 (hereinafter referred to as the Act) and completed the assessment on February 29, 1964 on a total income of Rs. 69,85,097.
(3.) At the time of the original assessment the assessee filed the return of income along with the auditor's certificate of the trading results of the various contracts. One of those contracts was in respect of work at Durgapur with the Hindustan Steel Ltd. In respect of that work the assessee filed a provisional estimate of income which was arrived at "by calculating the income that could be attributable in relation to the tax deducted under Section 18 (3B) by the Hindustan Steel Ltd." The Income-tax Officer computed the income from that contract at Rs. 5,33,16. The income from the other contracts was computed at Rs. 16,16,005 "as per audited statements.";