1. This reference raises a rather important and interesting question as to the powers which the Appellate Assistant Commissioner can exercise when an appeal is preferred by an assessee against an assessment made by the Income-tax Officer.

2. The assesses was carrying on a business in Bombay and in Rajkot and the accounting year of the Bombay and Rajkot business were different and therefore there was some overlapping of income. With regard to the profits of Rajkot, the Income-tax Officer assessed them proportionately at Rs. 1,17,643. He also considered the remittances made from Rajkot to Bombay and determined the amount at Rs. 4,00,000. He considered whether this remittance was liable to tax and came to the conclusion, in view of the concession allowed in Part B States Concession Order, that this sum was not liable to tax. The appeal of the assessee was confined to the profit of Rs. 1,17,643 and its case was that the Rajkot business had suffered a loss of Rs. 61,071. The Appellate Assistant Commissioner disagreed with the Income-tax Officer in his view that the profit should be ascertained on a proportionate basis and he directed that he should ascertain the actual profit for