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TMI Blog2006 (10) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... .e., asst. yr. 2000-01), whereas in the earlier years, he had shown rental income from this property are totally wrong facts. When the assessee had no rental income from 1st floor of Mahipalpur office during the asst. yr. 1999-2000, how the learned AO issued notice under s. 148 on the ground that the income was shown in the earlier year but not in the year under appeal and how his action was subsequently confirmed by learned CIT(A). The property in question was undisputedly occupied by the appellant for his business purposes till the asst. yr. 2000-01 which is duly accepted by learned CIT(A). 2. That the learned CIT(A) has erred in upholding the addition of the sum of Rs. 38,103 made by the AO on account of sinking fund while assessing income from house property. 3. That the appellant craves leave to add, modify or delete any ground of appeal before or at the time of hearing of the appeal." ITA No. 4025/Del/2004 (Revenue's appeal): "On the facts and circumstances of the case, the learned CIT(A) erred in deleting the income from house property at Rs. 19.80 lakhs being ALV of house property at RZ-293A, Mahipalpur, holding that the assessee occupied the said property for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission income but the fact remained that the appellant still occupied the building for the purpose of his business. He may not earn any business income but he was maintaining his office there and sorting and completing the old business which he had taken in the earlier years and since this was not a residential property it cannot he said that the appellant was using it for the purpose of his residence. The appellant was occupying it for the purpose of business and concluding the various business which he had earlier done from the said premises. The AO by any stretch of imagination cannot treat it as house property and add notional income on this premises since the appellant was using it for the business purpose and the finding of the AO that business discontinued after 31st March, 1999 is based on surmises without any proof. The said premises continued to be occupied by the appellant because he had to sort out pending issues and disputes with the clients of the principals and to suggest solutions for the settlement of disputes with them as such matters related to the transactions handled by the appellant in the period prior to 1st April, 1999. Hence, the contention of the AO that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said property at first floor, RZ-293, A Block, Mahipalpur, New Delhi, in the asst. yr. 2001-02 at Rs. 19,80,000. Since this income was not offered during the assessment year under consideration which is immediately prior to the asst. yr. 2001-02, the AO was having reasons to believe that there was escapement of income. After the amendment of provisions of s. 147 w.e.f. 1998-99, a reason to believe that income has escaped assessment is sufficient to issue notice under s. 148, and at the time of issue of notice it is not required to be established that there is actually an escapement of income and mere existence of cogent reason is sufficient to initiate reassessment proceedings. However, during the course of having assessment under s. 143(3)/147, it is required to be established that there was actual escapement of income. We, therefore, do not find any infirmity in the orders of lower authorities for initiating the reassessment proceedings. 8. In the instant case, the assessee was working as an agent of his principals, which were undertaking air freight services for its customers. The assessee was deriving commission income from his principals on air freight turnover and during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions entered into through him and for which the assessee was in receipt of huge amount of commission. We also found that assessee continued to enjoy the telephone connection for his business at premises No. RZ-293, A Block, Mahipalpur, in the name of T.N. Vohra and which has been confirmed by the photocopy of bill issued by Mahanagar Telephone Nigam Limited. The AO has no material in his hands which lays the cogent material to say that premises were occupied by the assessee for his personal purposes. The conclusion of the AO that business of the assessee was fully discontinued after 31st March, 1999 and the premises were occupied by the assessee for his personal purposes and not for the purpose of business is not corroborated by any documentary or circumstantial evidence. The business arrangements entered into by the assessee with the principals cannot be brushed aside and the duties which the assessee was supposed to undertake with respect to its earlier transactions have to be taken care of. Such work could not come to a standstill on the stroke of the closing hour of 31st March of 1999. There is a point to be carried out unfinished worked in this regard. For this purpose, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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