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TMI Blog1984 (8) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... S.Y. 2029 corresponding to the period from November 7, 1972, to October 26, 1973, was the previous year to the assessment year 1974-75. Similarly, S.Y. 2028 corresponding to the period from October 20, 1971, to November 6, 1972, was the previous year to the assessment year 1973-74. The petitioner-assessee had derived income by way of share income from partnership firm under the name and style of M/s. Tolaram Brothers. The assessee was one of five owners having 1/5th share each in the property known as " Mira Palace " situate at Maninagar, Ahmedabad. It is common ground that the construction of the said property was completed somewhere in December, 1972. The total cost of construction of the said building was shown in the return filed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compiled and filed by the assessee. The Tribunal, therefore, held that the inclusion of the impugned amount in the assessee's total income could not, therefore, be sustained since it has to be considered as income of the financial year, that is, 1972-73, and could be treated, if at all, as undisclosed investment under s. 69 and, therefore , could not have been brought to tax in assessment year 1974-75. The Tribunal, therefore, allowed the appeal. It is this order which has prompted the ITO to issue notice for reassessment for reopening assessment for assessment year 1973-74, because, according to the Tribunal the impugned amount was the income of the financial year 1972-73, and, therefore, consequently liable to be taxed if at all in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter for fresh valuation which was called for from the valuation cell, and according to the report it has been now valued at Rs. 3,34,000. Meanwhile the Appellate Tribunal by its order of August 29, 1979, held that the addition could not be sustained for assessment year 1974-75 as the same was purported to have been made under s. 69. It is in the context of these rival contentions that we have to consider as to whether the ITO was within his jurisdiction to initiate reassessment proceedings in exercise of his powers under s. 147(a) of the I.T. Act, 1961. We are of the opinion that this petition must be allowed obviously for the following reason : It is difficult to agree, on the facts and in the circumstances of the case, that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuer's report, Rs. 50,955) for which the assessee was required to show cause why the difference between the estimated value of the cost of construction of the said building of Rs. 2,20,805 minus cost of construction of the said building of Rs. 1,64,906 which comes to Rs. 55,899 which may be rounded to Rs. 55,000 should not be considered to have been spent jointly by him with other co-owners in which 1/5th share of the assessee comes to Rs. 11,000 to have been spent from some income from some undisclosed sources and added in his income. " The ITO had two documents with him. Firstly, the ITO had a statement of construction before him and, secondly, the report of the registered valuer, M/s. L. D. Asarporta and Asarporta, Ahmedabad. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the Tribunal that if at all this impugned addition can be made, it can be made only under s. 69 in which case it should be treated as an income of financial year 1972-73, and by necessary implication, therefore, could be brought to tax in assessment year 1973-74. It is in the light of this order that the ITO had reason to believe that it escaped assessment in assessment year 1973-74 since the assessee had failed to disclose truly and completely all the material facts necessary for assessment of the house property, Mira Palace. Though this contention appears to be attractive on the face of it on close scrutiny, with respect to the Revenue, it is fallacious. We should again remind ourselves that the construction was completed in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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