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TMI Blog1980 (4) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner-company was completed by the ITO on March 30, 1965, on a total income of Rs. 5,04,449. Before completing the above assessment the ITO issued letter to the assessee on March 6. 1965, inter alia, seeking certain clarifications in regard to the purchase of a large tract of land by the assessee company from one Pt. Lila Ram. It is not necessary to refer to the details of this transaction. It is sufficient to say that according to the assessee it had originally entered into an agreement to purchase this land from Pt. Lila Ram at a rate of Rs. 1,025 per bigha. But this agreement of purchase had been entered into by the assessee jointly with a firm known as L.M G. Colonisers and Traders of which the son of Pt. Lila Ram was one of the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was called upon to produce its account books relevant for the assessment year 1960-61 and also its cash vouchers for the period February to April, 1959. According to the writ petition the information called for was furnished and annexed thereto were, inter alia, copies of the vouchers, receipts and details of payments made to Pt. Lila Ram in discharge of the liability for Rs. 10,30,000. On January 22, 1969, the ITO issued a notice under s. 147 read with s. 148 of the I.T. Act, 1961. Since he refused to comply with the request of the assessee for the supply of reasons on the basis of which the notice had been issued, the assessee filed this writ petition. However, subsequent to the filing of the writ petition, the ITO furnished to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rces." In the affidavit of Pt. Lila Ram, which was enclosed, Pt. Lila Ram stated that he had sold the lands to the assessee for Rs. 19,00,654 and that he had received Rs. 8,70,654 in cash and the balance of Rs. 10,30,000 by way of hundis which were retired later. Full details of the various payments aggregating to Rs. 19,00,654 as per the account books of Pt. Lila Ram were also furnished as an annexure to the letter dated July 10, 1969. It is on the basis of the above material that the question in this writ petition falls to be decided. Mr. Desai, learned counsel for the petitioner, contended that even at the time of original assessment the assessee had supplied fully and truly all the necessary facts in regard to this aspect of the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted. We are unable to agree with the contentions put forward by the learned counsel for the petitioner. In our opinion the material on record discloses sufficient grounds for action under s. 147(a). At the time of original assessment the only aspect of the transaction which was examined by the ITO was as to why the assessee had agreed to pay for the land at Rs. 1,350 per bigha even though there was an original agreement in its favour which would have enabled it to purchase the land for Rs. 1,025 per bigha. This aspect was apparently explained to the satisfaction of the ITO by the assessee. But at the time of original assessment there was no reason for the ITO to doubt that the assessee had paid Pt. Lila Ram the sum of Rs. 21,93,058 as st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statements made by Pt. Lila Ram. On the other hand the only method by which the ITO could satisfy himself as to the correctness or otherwise would be by initiating reassessment proceedings and having Pt. Lila Ram and the assessee examined and cross-examined in the course of the assessment proceedings so initiated. In our opinion it is clearly a case which falls within the terms of s. 147(a). The facts in the present case are also to large extent analogous to those considered by the Supreme Court in the case of CIT v. T. S. PI. P. Chidambaram Chettiar [1971] 80 ITR 467. In that case also the original assessment had been completed by the ITO accepting the statement of the assessee, though there was some information before him (which the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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