9911796707
TMI Blog1993 (9) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ive thousand plus was filed and after adjustments in respect of depreciation and preliminary expenses loss was determined. The business loss along with unabsorbed depreciation was allowed to be carried forward. The assessment was made under section 143(3) on 28-6-1985. 3. The case was offered for inspection by the Assessing Officer Shri P. K. Kedia, who had completed the assessment, for the purpose of inspection by the I.A.C. Range-III, Bombay during financial year 1985-86, i.e., soon after the assessment was completed. The I.A.C. found that the assessee entered into an agreement with M/s. Pramashaw Finance Corporation on 19-6-1982 for purchase of office premises in Raheja Centre, Nariman Point, Bombay for a consideration of Rs. 3,15,575 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he annexure to the notice as under: "The assessee purchased office premises at Raheja Chambers, Nariman Point, for Rs. 3,15,505 at the rate of Rs. 325 per sq. feet whereas the market value of the property in the same locality at that time was Rs. 1025 per sq. feet. At the time of assessment the adequacy or otherwise of the price paid for purchase of the premises was not enquired into by the ITO. The asst. is, therefore, erroneous insofar as it is prejudicial to the interest of the revenue." 4. Vide letter dated 3-3-1988, the assessee made written submissions stating that--- (i) The price was paid as agreed and why a particular buyer or seller bought or sold at some other price was not assessee's consideration; (ii) The relevant facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... locality which had given a return of more than this rate. 5. The Commissioner referred to few of the statements and contentions stated by the assessee and formed the view that--- (i) record showed that at the time of assessment the adequacy or otherwise of the price paid by the assessee for the office premises at Raheja Chambers was not inquired into; (ii) even considering the principle laid down in the case of Ganga Properties it could be seen that the Assessing Officer failed to make proper enquiry regarding price; (iii) regarding section under which the charge is sought to be levied the answer would depend upon the result to proper enquiry into the transaction; and (iv) action under section 263 could be taken in case where any reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instances the Assessing Officer should have forwarded the same to the assessee for its comments, besides the Assessing Officer should also have verified from the assessment record of the vendor whether the consideration was accepted in that case or not. Consequent to this direction given by the Commissioner (Appeals) on 24-10-1989 the Assessing Officer completed fresh assessment on 14-2-1992 where he adopted market value at Rs. 4,51,500 in place of Rs. 9,00,000 estimated earlier and considered by the Commissioner as also the Assessing Officer in earlier assessment. Consequently the income from unexplained sources under section 69 was made only of Rs. 1,36,075. Against this assessment again the assessee had preferred an appeal before the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court referred to by the learned Sr. Departmental Representative was considered by Their Lordships of the Madras High Court In the case relied upon by him. 8. On consideration of the rival submissions and the materials to which our attention was drawn, we are of the opinion that assumption of jurisdiction by the Commissioner under section 263 of the Act was not justified. The reasons are as follows: We do not find any error in the assessment order nor there was any material on the basis of which it could be said that there was failure on the part of the Assessing Officer to make enquiries. In the assessment order the Assessing Officer specifically refers to the fact that the assessee-company had purchased office premises, deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the various provisions of the Income-tax Act, to our mind, probably section 69B is relevant to the facts. Provisions of section 69B can be invoked if (i) it is found that the assessee has made investment, and (ii) it is found that the amount expended on making such investment exceeded the amount recorded in that behalf in the books of account, and (iii) either the assessee offers no explanation about such excess amount or the explanation offered is not satisfactory in the opinion of the Assessing Officer. These three findings are cumulative, to be recorded on gathering the necessary facts, but the basic finding which is to be recorded on clear and cogent material is in respect of the amount expended by the assessee in excess of tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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