- (1.) This is a reference under Section 256 of the Income-tax Act, 1961.
(2.) The statement of case shows that the assessee-company initially was subjected to tax at 55 per cent, of the total income by treating it as within "in any other case" mentioned in Part III, Paragraph E, of the respective Finance Acts. Subsequently, by proceeding under Section 154 of the Act the assessee was subjected to tax at 60 per cent, of the total income by treating it as a trading company mentioned in Part III, Paragraph E of the Finance Acts. The contention of the assessee is that it is not a trading company and therefore, not to be taxed at 60 per cent, as its business was of tea brokers and auctioneers which involved wide range of services like sampling, testing, valuing and cataloguing. The order of rectification was passed by the Assessing Officer under Section 154 of the Act for the three assessment years, viz., 1986-87, 1987-88 and 1988-89, and the assessee-company treated as a trading company.
(3.) Being aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) which was allowed and the Assessing Officer was directed to tax the assessee at the rate that was applied in the original assessment.;