9911796707
TMI Blog1985 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... rrived at Rs. 350 per cent is without any basis. Thus, the cost of acquisition as worked out by the assessee is on an arbitrary basis. He estimated the value of the land extending to 2.5 acres as on 1-1-1954 as also the value of the building and compound wall. He computed the capital gains by deducting Rs. 61,977 as the cost of acquisition of the property out of the compensation received of Rs. 1,23,953 and also allowing deduction under section 80T of the Act. On appeal, the AAC held that in the return filed originally on 5-8-1974 and the statements filed along with the same, the assessee had shown the compensation received and also the cost of the same. Thus, the primary facts necessary for the purpose of assessment had been filed at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to disclose the facts fully and truly. Since there is no information subsequent to the original assessment section 147(b) cannot be applied. Thus, he supported the order of the AAC. 3. We have considered the rival submissions. In the return filed by the assessee, the capital gain of Rs. 7,954 was included. In the statement filed along with the return, the compensation received at Rs. 1,23,953 was shown and out of it the cost of acquisition of the property as on 1-1-1954 at Rs. 87,500 and the cost of the building and compound wall at Rs. 23,500 and the expenses incurred at Rs. 5,000, totalling, Rs. 1,16,000, were deducted and the capital gain was arrived at Rs. 7,954. It is clear from the return and the statement filed along with it t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w could not be regarded as information enabling the ITO to initiate reassessment proceedings under section 147(b). As already pointed out, the audit report does not refer to any point of law but refers to the estimated value of the cost of acquisition of the land in 1954, which according to it, is law and not supported by any evidence. This, in our view, does not constitute information for reopening the assessment under section 147(b). In Harshvadan Mangaldas v. ITO [1982] 137 ITR 147 (Guj.) the assessee sold shares which were not quoted in the market and disclosed a capital loss on the basis of the market value of the shares as on 1-1-1954, which was worked out by an approved valuer. The ITO accepted the same and computed the capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he figure of capital gain was computed. On those facts, the Supreme Court held that for the ascertainment of the fair market value of the shares as on 1-1-1954 any issue of bonus shares subsequent to that date was wholly extraneous and irrelevant and could not be taken into consideration. The assessee was bound to disclose only such material facts which were necessary for its assessment and not those facts which were wholly extraneous or irrelevant. Under clause (b) of section 147, the information had to be such as would lead the ITO to believe that income chargeable to tax had escaped assessment. The information relating to the acquisition of bonus shares subsequent to 1-1-1954 could not possibly furnish any reason to the ITO to form the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1981] 129 ITR 531 (Delhi) in support of his contention that even if it cannot be sustained under section 147(a) it can be considered under section 147(b) if it is within limitation. This contention will not survive as we have held that neither section 147(a) nor section 147(b) is applicable for reopening the assessment in this case. The decision of the Madras High Court in M. A. Murugappan v. CWT [1985] 153 ITR 626 relied on by the departmental representative is distinguishable. In that case, the audit party merely brought to the notice of the ITO the note given by the assessee along with the return claiming to be a resident but not ordinarily resident. The facts of that case are, thus, entirely on different ground and that case has no ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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