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TMI Blog1988 (9) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... on agricultural lands. of 21.22 acres at Balakrishnapuram amounting to Rs. 1,23,460 in its net wealth and offered the same for assessment The original assessments were completed by the IAC under s. 16(3) of the Act on 28th July, 1986 determining the net wealth at Rs. 27,57,590 for 1984-85 and at. Rs. 24,34,090 for the asst. yr. 1985-86 It is seen from the copies of these assessment orders dt. 28th July, 1986 that the returned net wealth was accepted by the IAC in both the years. 3. Subsequently the appellant filed voluntary returns of net wealth on 29th Sept., 1986 for both the years under the Amnesty Scheme. In the covering letters dt. 19th Sept., 1986 to these fresh returns file by it the assessee claimed that the value of the non agricultural lands of 21.22 acres amounting to Rs. 1,23,460 was erroneously included in the assessable wealth and that the same should be excluded for purposes of assessment while processing the fresh wealth tax return filed by it including the value of certain other assets namely (i) office space occupied by wholly owned subsidiary (ii) play ground area and (iii) value of cars which were offered by it in these fresh returns as taxable wealth. 4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited scope of the power and jurisdiction of the WTO in reassessing to tax the escaped net wealth by allowing the assessee to seek a recomputation of the net wealth and a redoing of the assessment, and allow a claim which the assessee failed to make at the time of the regular assessment; especially when the assessment became final. The CIT(A) further held that in the original assessment in the present case there was no claim by the appellant that the Airport land was a business asset and that the appellant had in fact treated the same as a non-business asset being land not required for running the textile mill, which was the appellant's business and offered for assessment and the IAC had charged tax on its value. The CIT(A) also relied on the decision of the Appellate Tribunal, Cochin Bench in the case of A. Rashid vs. ITO reported in (1985) 23 TTJ (Coch) 129 : (1985) 14 ITD 200 (Coch) to hold that the assessee was not entitled to claim a relief for the first time in the course of the reassessment proceedings when the matter had already become final in the original assessment. He therefore held that the IAC had rightly rejected the assessee's claim for exclusion of the value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Andhra Pradesh High Court in State Bank of Hyderabad vs. CIT reported in (1987) 171 ITR 232 at 239 (AP) and submitted that the first two propositions laid down in the said case by the Andhra Pradesh High Court were in favour of the assessee. The learned counsel therefore contended that the appellant was entitled to succeed in its appeals. 8. Shri K.V. Ananthachari, the learned Departmental Representative relied on the decision of the Madras High Court in the case of Chettinad Corporation P. Ltd. vs. CIT and contended that this decision squarely applied to the facts of the present case and that therefore the action of the departmental authorities in rejecting the assessee's claim should be upheld. He further argued that the decisions relied on by the appellant's learned counsel should be confined to their facts and that the line of distinction sought to be drawn by the learned counsel for the appellant to distinguish the decision in the case of Chettinad Corporation was not correct. He further submitted that in view of this decision of the Madras High Court, reliance placed by the assessee's learned counsel on the decision of the Andhra Pradesh High Court would be of no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 147(a) of the IT Act, the ITO still has jurisdiction to assess the entire income in the hands of the assessee, irrespective of the fact whether the items of income which escaped assessment fall under s. 147(a) or s. 147(b) of the Act, even though the issue of a notice under s. 147(b) would be barred by the period of limitation prescribed therefor under s. 149 of the Act. It would be noticed from the second question set out at page 882 of the Reports, that the question that was raised was whether the Tribunal was right in holding that the provisions of s. 147(a) could not be invoked for withdrawing the excess depreciation allowed originally on certain machineries for the three asst. yrs. 1961-62, 1962-63 and 1963-64. The ITO had restricted the depreciation allowance which was originally granted by him at 10 per cent in the original assessment proceedings, to 7 per cent in the reassessment proceedings. This was held to be wrong by the Tribunal, but this decision of the Tribunal was reversed by the High Court in this decision. 12. The decision of the case of CIT vs. B. Nagi Reddi follows the decision in the case of CIT vs. Standard Motor Products (India) Ltd. In this case the ITO ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Lordships of the Madras High Court have held as follows at page 65 of the reports: "However, having regard to the object and the language of s. 34 of the 1922 Act and s. 147 of the 1961 Act and s. 8 of the surtax Act, we are of the view that the reopening can only be for the benefit of the Revenue. But this is subject to one exception. Where a particular item is sought to be brought to charge for the first time in the assessment proceedings, any allowance, deduction or other relief in relation to that item can be put forward by the assessee and that has to be necessarily considered by the assessing authority and relief granted if the circumstances warrant. If any disallowances made during the course of the original assessment, which the assessee wants to be reconsidered during the reassessment, is relevant or has a nexus with items of income brought to charge by the ITO on reassessment, that can be considered. All other items of disallowances or relief claimed by the assessee which are the subject-matter of the enquiry during reassessment cannot be considered again by the ITO at the stage of the reassessment. Therefore, in reassessment proceedings, the assessee cannot reagitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ps finally held that if after issuing notice under s. 34 the ITO was satisfied that really no income had escaped assessment in that year, it was open to him to drop the proceedings to assess or reassess the income and that the assessee was not entitled, in such event, to insist that the ITO should proceed to assess the income and give him relief under s. 24(3). 16. The next decision is reported in Hindu Bank Karur Ltd vs. Addl CIT, Madras (1976) 103 ITR 553 (Mad). While dealing with the revisionary powers of the Commissioner under s. 263 of the IT Act, 1961, their Lordships of the Madras High Court held as follows at page 561 of the reports: "In cases where the income had escaped assessment and where proceedings were taken under s. 34 of the Indian IT Act, 1922 corresponding to s. 147 of the IT Act, 1961 questions had arisen as to whether an assessee could resist such proceedings, by showing that other income, which was not assessable had been assessed. The several cases in which the assessee 's attempt to resist such proceedings in this manner had failed, are set out at page 782 of Kanga and Palkhivala on Income-tax, Volume I, sixth edition pages 782-783. Under s. 152(2) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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