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TMI Blog1987 (7) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... n the words of the ITO "later on it was found that the freezing plant was installed on 27-3-1975 only and that according to section 16(c) of the Finance Act, 1974 development rebate on machinery and plant installed after 31-5-1974 but before 1-6-1975 is admissible only if the assessee had either purchased or entered into contract for the purchase of machinery before the first day of December, 1973". The ITO noticed that the assessee by its letter dt. 16-9-1976, during the original assessment proceedings, has, however, admitted that there was no contract with the suppliers for the purchase of the freezing plant installed on 27-3-1975 and that the order for purchase was placed on 20.6.1974 only. The ITO came to the conclusion that in those ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 21-3-1981. 3. Against the withdrawal of the development rebate in the reassessment order, the assessee appealed to the CIT (A). The CIT (A) annulled the reassessment observing as under:- "From the assessment order it is clear that by letter dated 16-9-1976, the appellant had admitted that there was no contract or agreement with the suppliers for the purchase of Freezing Plant. The first assessment was completed only on 9-1-1978 after the receipt of this letter. Therefore, whatever information was necessary for coming to a correct decision in this case was available with the Income-tax Officer when he made the first assessment. The Income-tax Officer has not pointed out that he has received any information subsequent to the completio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cago, U. S. A. The assessee, by its letter dated 8-11-1976 informed the ITO that it had entered into an agreement with the seller of the Freezer M/s. Crepaco Inc., U. S. A. as early as in November 1973 and that the order was supplied on 30-9-1974 in pursuance of the said agreement. The ITO vide his letter dated 24-11-1976 required the assessee to produce the agreement said to have been entered into by the assessee with M/s. Crepaco Inc. in November 1973 and the entire correspondence relating to the purchase of the freezer. The agreement alleged to have been entered into by the assessee with the American company in November 1973 was not produced before the ITO. Then there was a change in the incumbent of the office of the ITO. The successor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of the Freezer Plant so as to be eligible for development rebate for the assessment year 1975-76 in terms of section 16(c) of the Finance Act, 1974. Jurisdiction of the Income-tax Officer to reassess income arises if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment. That information be such that it could have been obtained during the previous assessment from an investigation of the material on record, or the facts disclosed thereby, or from other enquiry or research into facts on law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected. See the decision of the Supreme Court in CIT v. A. Raman Co. [1968] 67 ITR 11. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement entered into in November 1973 was only oral. Order was placed on 20-6-1974. All the relevant information connected with the claim of development rebate was available with the ITO when he made the original assessment on 9-1-1978. The information should be got by the ITO from external sources only and not from the existing record. In the present case as the relevant information was in existence in the record of the ITO section 147(B) is not attracted. 6. We have considered the rival submissions. The ITO, long after the completion of the original assessment found out from the available record that the Freezing Plant was installed on 27-3-1975 and that the assessee admitted in its letter dated 16-9-1976 that there was no contract with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of that expression as used in section 34(1)(b) of the Indian Income-tax Act, 1922, and the reopening of the assessment order under section 34(1)(b) was not illegal." Later, the Kerala High Court held in Kerala State Industrial Development Corpn. Ltd.'s case that : "If there was non-advertence of the mind on the earlier occasion and an advertence on a later one that would be sufficient to form the foundation for reassessment." According to the ITO the information that there was no agreement with the suppliers of the Freezing Plant came to him subsequent to the completion of the assessment on 9-1-1978. That is why he mentions in the reassessment order dated 21-3-1981 that "Later on, it was found that the Freezing Plant was inst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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