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TMI Blog1996 (8) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Supreme Court in the case of Indian and Eastern Newspaper Society (1979) 12 CTR (SC) 190 : (1979) 119 ITR 996 (SC) : TC 51R.1371 would apply to the facts of the case ?" 2. There was an agreement of sale of certain properties. One of the conditions in the agreement was that if the entire consideration was not paid before 31st Dec., 1967, the purchaser should pay interest at 9 per cent per annum on the balance amount remaining unpaid on 31st Dec., 1967. The assessee received for these two years such interest of Rs. 7,942 for each of the two years 1970-71 and 1971-72. The assessee filed returns for the asst. yrs. 1970-71 and 1972-73 disclosing the interest income for the delayed payment as sale consideration for the purpose of making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the internal audit report. The Tribunal following the decision of the Supreme Court in the case of Indian Newspaper Society vs. CIT , held that the reassessments were not valid in law. 3. Before this Court, learned standing counsel appearing for the Department submitted that the concession was given only to the extent that the audit report was the basis for reopening the assessments under s. 147(b) of the Act and it does not mean that the Department accepted that the audit report indicated pointing out the law to be applied in this case. Therefore, according to learned standing counsel inasmuch as the reopening was made on the basis of the audit report which pointed out only the factual position, it cannot be said that the reopenin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the balance of the sale consideration as part of the sale consideration for the purpose of levying capital gains tax. The returns filed by the assessee were accepted by the ITO and the assessments were completed. Later, on the basis of the internal audit report, the ITO came to the conclusion that the interest received in the assessment years under consideration for belated payment of sale consideration should not form part of the sale consideration and the interest payment received by the assessee should be assessed separately under the head "Other sources". Accordingly, the assessments were reopened under s. 147(b) of the Act and the ITO completed the reassessments by assessing the interest payment separately under the head "Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary is proved by convincing cogent evidence. In the present case, the audit report was not made available and so also the agreement, dt. 29th March, 1967, was not produced before this Court. Particularly, in the absence of the internal audit report, we cannot say that the audit report pointed out only the factual position and not any question of law that has got to be applied on the facts of this case. A similar question came up for consideration before this Court in Needle Industries (I) Ltd. vs. CIT referred to above wherein this Court held as under: "We are, therefore, constrained to go by the order of the Tribunal in sofar as the contents of the audit report are concerned. The Tribunal has made a passing reference to the audit report ..... X X X X Extracts X X X X X X X X Extracts X X X X
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