9911796707
TMI Blog1983 (2) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ise to these petitions, briefly, are as follows : Petitioner No. 2 is a registered partnership firm carrying on business of manufacture and sale of khandsari sugar at village Mahukhedi Nevri, in the district, Dewas. Petitioner No. 1 is one of the partners of petitioner No. 2. For the assessment years 1976-77 and 1977-78, for which the relevant accounting years of the petitioner-firm ended on 30th June, 1975, and 30th June, 1976, respectively, petitioner No. 2 filed its returns.In the relevant years, petitioner No. 2 had paid interest to its partners and to three HUFs, Mohanlal Badrilalji, Sureshchandra Badrilalji and Nandkishore Badrilalji, of which Shri Mohanlalji, Sureshchandraji and Nandkishoreji, partners of petitioner No. 2, were resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax had escaped assessment and that the reasons recorded by the respondent under s. 148(2) of the Act were as follows: "During the previous years relevant to the assessment years 1976-77 & 1977-78, the assessee had paid interest to HUFs styled as S/Shri Mohanlal, Nandkishore and Sureshchand. This interest was not allowable deduction under s. 40(b) in view of CIT v. London Machinery Co. [1979] 117 ITR 111, 121 (All). The assessee also failed to disclose that interest was paid to the aforesaid three HUFs. Thus, the assessee failed to disclose fully and truly all material facts necessary for its assessments for the aforesaid two assessment years and thus the income chargeable to tax has escaped assessment for assessment years 1976-77 & 1977 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the formation of the belief and are not extraneous or irrelevant to the purpose of s. 147 of the Act. Now, on the question as to whether the petitioner-firm had disclosed that it paid interest to the three HUFs in question during the relevant assessment years, there are conflicting versions. The case of the petitioners is that the petitioner-firm had submitted its interest account from which it was clear that the petitioner-firm had paid interest to Mohanlal Badrilalji, Sureshchandra Badrilalji and Nandkishore Badrilalji. The case of the Revenue is that interest account was not filed by the petitioner firm for the assessment year 1976-77 and the interest account filed for the assessment year 1977-78 did not show that interest was paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of the information contained in the letter received from the IAC, that he had reason to believe that income chargeable to tax had escaped assessment for the assessment years 1976-77 and 1977-78. In these circumstances, the ITO had jurisdiction to issue notice under s. 148 of the Act for starting reassessment proceedings under s. 147(b) of the Act. In this connection, we may usefully refer to the following observations of a Division Bench of this court in CIT v. Anand Transport Co. P. Ltd. [1982] 137 ITR 300, 303: " The provisions of s. 147 of the I.T. Act, 1961, depart from the normal rule that there should be, subject to any right of appeal and revision that may be available, finality of orders made in judicial and quasi-jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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