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TMI Blog1982 (2) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... original assessments framed on 28-10-1976 and 25-8-1977 for the years under appeal, respectively. Unexplained investment in the construction in both the years was not examined by the ITO at the stage of the original assessments. For both the years, the ITO observed at the stage of the original assessments that the investment in the property was not examined, as the construction was not complete during the period relevant to the assessment years in question. He already observed in both the assessment orders that the investment in the property would be considered after completion of the construction and after the receipt of the report of the Valuation Officer. Admittedly, the assessee showed the investment made in the construction up to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d investment, being the income of the assessee from undisclosed source, had escaped assessment in two years. He, therefore, made the additions of Rs. 3,14,907 and of Rs. 70,670 in the reassessment orders for the year under appeal, respectively, framed on 22-3-1980. 2. Aggrieved, the assessee carried the dispute in appeals to the Commissioner (Appeals) who was of the view that the purported unexplained investment, as added by the ITO in the reassessment orders framed under section 147(a), read with section 148, of the Income-tax Act, 1961 had not escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment and, therefore, he wrongly exercised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made by it up to the assessment year 1973-74 in all the returns, no disclosure of investment was made by the assessee in the returns pertaining to the years under appeal. Admittedly, precise amount of investment was not disclosed by the assessee in the returns filed for the years under appeal. But the argument of Shri Ranka, learned counsel for the assessee, is that the ITO was not in the dark about the fact of construction and what he very well knew was that the construction which had started several years before, continued during the years under appeal. That being so, Shri Ranka says that the ITO well knew that investment had been made by the assessee during the years under appeal on the construction. Admittedly, in the property acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are completely covered by section 147(a) and, therefore, the ITO rightly exercised jurisdiction for reopening. We are not at all impressed by the submission of Shri Swaroop. No column of the return enjoins upon the assessee to disclose the actual investment made in the construction. The facts, necessary for making the assessments, were already before the ITO. He knew that the construction activity continued during the years under appeal. Therefore, the ITO would have got the construction being made during the years under appeal valued or he himself would have valued them and he would have asked the assessee to explain the investment and if any unexplained investment were there after the necessary enquiry, then the same would have been ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 130 ITR 868 (Raj.). A careful perusal of the authorities being relied on by Shri Swaroop shows that they do not substantiate his contention that disclosure of actual investment is a material fact within the meaning of section 147(a). Circumspection of all the submissions and other materials lead us to the conclusion that disclosure of actual investments made in the construction is not sine qua non for making the assessment or a material fact within the meaning of section 147(a) and, therefore, there is no escapement of any income in the instant case due to any omission or failure on the part of the assessee by not having disclosed the actual investment only. For the reasons, we uphold the orders of the Commissioner (Appeals). 5. Then, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the report of Valuation Cell at the time when he was seized of the assessment proceedings at the initial stage, he postponed the procurement of the report until the date of completion of the construction. These facts do not justify the invocation of section 147(b). It was also argued by Shri Swaroop that it is not the duty of the ITO to infer out the facts regarding disclosure after exercising due diligence and making research into the other evidence brought on record by the assessee. Explanation 2 to section 147 is in point. The said Explanation 2 has no bearing on the facts of these cases. These are the cases wherein the ITO was already in seize of the attention, but he postponed the enquiry regarding the actual investment on his o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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