TMI Blog1990 (12) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... amount spent towards the cost of construction of the house under Voluntary Disclosure Scheme. The question of cost of construction was fully gone into while making the assessment against the assessee for the asst. yr. 1975-76. The cost of construction was estimated by the Departmental Valuation Officer for purposes of assessments for asst. yr. 1975-76 at Rs. 4.98 lakhs. Deducting the amount of Rs. 2,86,000 the ITO found out the total undisclosed cost of construction at Rs. 2,12,000 while making the assessment for 1975-76. This undisclosed cost of construction was equally spread over four asst. yrs. 1972-73 to 1975-76 since the construction admittedly took place during the period falling in the previous years relevant to these four assessment years. Hence, the ITO added a sum of Rs. 53,000 for asst. yr. 1975-76 and proposed to add a sum of Rs. 53,000 in each of the three previous assessment years, namely 1972-73 to 1974-75. The original assessments for 1972-73 to 1974-75 were completed on 16th Sept., 1972, 14th Nov., 1973 and 14th Nov., 1974 respectively. According to the Revenue, the cost of construction incurred in the previous years relevant to these three asst. yrs. was not dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year, proposals for reopening have been made in 1983 to the CIT. After obtaining permission from the CBDT for asst. yrs. 1972-73 and 1973-74 and from the CIT for Assessment yr. 1974-75 notices under s. 148 were issued to the assessee reopening the assessment for 1972-73 and 1973-74 the notices under s. 148 were issued on 7th March, 1983 and for 1974-75 the said notice was issued on 26th Feb., 1983. Against the order of the AAC dt. 29th April, 1982 for asst. yr. 1975-76 both the assessee as well as the Departmental came up in appeals before this Tribunal. The Tribunal seems to have set aside the orders of the lower authorities and remanded the matter to the ITO to re-examine the question about cost of construction by its order dt. 18th March, 1983. The said order of the Tribunal was said to have been received in the office of the CIT on 16th April, 1983 and the concerned ITO issued those orders only on 17th June, 1983. The reassessments for each of these three assessment years were made on 31st March, 1987 by separate assessment orders passed under s. 144 r/w s. 147. Since by the time of passing the reassessment orders the order of the AAC for asst. yr. 1974-75 was stil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each of these three assessment years under consideration was already placed before the ITO while making the original assessments by the assessee as contended by his counsel. It is no doubt true that copies of the trial balances were appended to the returns filed for these three assessment years. The items of narration in trial balances were all in English and I have perused the trial balances from the original assessment records produced before me by the learned Departmental Representative at the time of enquiry. From the returns filed it is found that the assessee carried on business of financing since he disclosed interest receipts. He also disclosed share income derived by him from M/s Amarlal Kishandas said to be a partnership firm. It is stated that the assessee maintained personal books of account and on the debit side of the trial balance attached to the income-tax return for asst. yr. 1972-73 it is clearly noted that a plot was purchased for a sum of Rs. 38,528.56 and for the construction on the said plot an amount of Rs. 12,000 was shown to have been incurred. As against such clear narration for asst. yr. 1972-73, the narration in the trial balance accompanying the returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 500 and since the order was still holding the field at the time, only a lesser addition of Rs. 32,500 was made though the permission was obtained either from the CBDT or from the CIT with the intention to add Rs. 53,000 for each of the three assessment years. Since the AAC's order did not become final but was subsequently set aside by the Tribunal, the assessee cannot take advantage of the AAC's appellate order for 1975-76 fixing the addition only at Rs. 32,500 instead of Rs. 53,000. Since the whole matter was remanded to the ITO for fresh disposal of assessment for 1975-76 the assessee cannot be permitted to argue that permission for reopening obtained from CBDT was invalid because the amount sought to be added in the reassessment proceedings was less than Rs. 50,000 for asst. yrs. 1972-73 and 1973-74. The learned Departmental Representative also pointed out that the decisions in ITO vs. R. Surendar Reddy (1988) 26 ITD 153 (Hyd) and Ram Gopal Neotia vs. ITO (1982) ITD 160 (Cal) (SB) : 2 SOT 561 (SB) do not have any relevance and no benefit can be derived from those decisions. 5. The learned Departmental Representative ultimately argued that the AAC did not properly appreciate la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion for reopening if the amount sought to be added falls less than Rs.50,000 especially when the reopening is sought to be made more than eight years after close of each of the two assessment years in question. Under s. 151 of the IT Act permission from the CIT can be secured only if the reopening was sought to be made within four years after the close of the asst. yr. Reliance was placed on the decisions in 36 ITD 153 and 2 SOT 561 in support of the contentions of the learned counsel. 7. Thus I have heard these appeals fully. I am of the view that for the asst. yr. 1972-73 all primary and material facts necessary for making the assessment for that year were already disclosed. I have already stated that on the debit side of trial balance filed along with the income-tax return for the year, it was clearly mentioned that a sum of Rs. 38,528.50 was incurred in purchase of plot and Rs. 12,000 was incurred for construction in the said plot. Had the ITO entertained any doubt about the proof or adequacy noted in the account books, this information available in the trial balance is sufficient to enable the ITO to complete the original assessment. The assessee is not at all obliged unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98,528.50 and Rs. 1,13,528.50 were debited in the trial balance filed along with income-tax returns for those two assessment, the narration against each of these debits was common, which is "investment in house". This narration, in my opinion, does not reveal that the amounts were incurred towards cost of construction only. In this assessments for 1972-73 to 1974-75 is a single person or different persons. I have also verified that they are different and three separate ITOs passed original assessment for 1972-73 to 1974-75. However, the very fact that none of them enquired about he truthfulness of the cost of construction made me believe that perhaps the narration made against these debits might made them believe that they do not relate to the construction of the house. I hold that the narration does not give an inkling of an idea that the debits relate to the construction of house. I accept the argument that the investment in house need not necessarily be towards construction of house. Investment may be made to purchase movable property and furnishings in the house also. Further, the house referred to in the narration need not necessarily be the house of the assessee. Only comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... narration as he had given to the debit relating to asst. yr. 1972-73 as against the debit relating asst. yr. 1972-73 as against the debit in the trial balance for 1973-74 and 1974-75 also. I hold that the assessee attempted to hide the real meanings of the debits for asst. yrs. 1973-74 and 1974-75. 9. The next contentions is that the assessments are time barred. Dates of assessment together with the date of issue of notices under s.148 for the three assessment years under consideration are furnished in the table below for purposes of easy appreciation: Asst. yr. Date of original assessment Date of issue of notices under s. 148. 1972-73 15.9.72 7.3.83 1973-73 7.11.77 7.3.83 1974-75 13.11.74 26.2.83 The question of time barring was sought to be substantiated on the following grounds: (1) Reasons were not recorded for reopening. (2) the reopening was in fact made under s. 147(B) and not 147(a) (3) The CBDT has no authority to furnish reopening when the amount sought to be added on reassessment is less than Rs. 50,000. I have already extracted the arguments advanced on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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