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TMI Blog1996 (10) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... arty of the Department, after examining the proceeding, wrote a note as under : " Nothing has been mentioned as to why the goodwill of the firm has not been added to the P. V. while making assessment of the estate duty. The Assistant Controller of Estate Duty promised to look into the matter. " The Assistant Controller, on the basis of the aforesaid note of the audit party, issued a notice to the accountable person under section 59 of the Act on January 6, 1977. The audit note was treated as information within the meaning of section 59(b) of the Act. The deceased, Daya Nand Munjal, was a partner in two firms, namely, Hero Cycle Industries, Ludhiana, and Rockman Cycle Industries, Ludhiana, in his individual status and also a partner in another firm, namely, Munjal Sales Corporation, Ludhiana, in the status of karta of his Hindu undivided family. The Assistant Controller determined the share of the deceased in the value of the goodwill of the aforesaid three firms and then worked out the principal value of the estate thereafter. An appeal was filed before the Controller of Estate Duty, challenging the proceedings under section 59 of the Act. The plea taken by the accountable pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghtly issued. Section 59 of the Act reads as under : " 59. Property escaping assessment. --- If the Controller,--- (a) has reason to believe that by reason of the omission or failure on the part of the person accountable to submit an account of the estate of the deceased under section 53 or section 56 or to disclose fully and truly all material facts necessary for assessment, any property chargeable to estate duty has escaped assessment by reason of undervaluation of the property included in the account or of omission to include therein any property which ought to have been included or of assessment at too low a rate or otherwise, or (b) has, in consequence of any information in his possession, reason to believe notwithstanding that there has not been such omission or failure as is referred to in clause (a) that any property chargeable to estate duty has escaped assessment, whether by reason of undervaluation of the property included in the account or of omission to include therein any property which ought to have been included, or of assessment at too low a rate or otherwise, he may at any time, subject to the provisions of section 73A, require the person accountable to submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Shri Daya Nand Munjal. In this case, both the points regarding correct assessment of appreciation in the value of buildings and regarding the assessment of goodwill require thorough consideration. Notice under section 59(b) of the Estate Duty Act should be issued. The accountable person's both items have escaped assessment. " The reasons recorded by the Assistant Controller on the basis of the audit report do not make a mention of the letter dated March 23, 1973, which is said to have been filed by the accountable person, giving therein the details of the goodwill of the firms. Therefore, the said letter, not having been mentioned either by the audit party or by the Assistant Controller, would not form the basis of any information. The Bombay High Court had an occasion to examine the question relating to reassessment under the Act in Ramesh Chandrasen Ashar v. K. M. Barshiwala, Addl. First Asst. CED [1984] 148 ITR 1. That was a case where the accountable person had submitted an account of the estate of the deceased, which included 81 shares held by the deceased in a company, valued at Rs. 1,217.23 per share based on the report of a valuer. However, the Departmental value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit Officer could not be treated as "information". The question of reassessment and reopening has been examined by the Supreme Court in Chhugamal Rajpal v. S. P. Chaliha [1971] 79 ITR 603. The Income-tax Officer had completed the assessment after enquiry. The assessee had produced the books of account and also a statement giving full names and addresses of the various creditors. However, a notice under section 148 of the Income-tax Act was issued, initiating reassessment proceedings. The Income-tax Officer had relied upon certain communication received by him from the Commissioner of Income-tax, from which it appeared that the creditors were name-lenders and the loan transactions were bogus. The Income-tax Officer did not mention any material which was before him. Since the Income-tax Officer had not come to a prima facie conclusion that the loan transactions were not genuine transactions and had only a vague feeling that they might be bogus transactions, such a conclusion was held to be not sufficient. The Supreme Court has again examined the question of reassessment on the basis of subsequent information, in ITO v. Lakhmani Mewal Das [1976] 103 ITR 437. That was a case under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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