TMI Blog1998 (11) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... disclose the same again and it is omission on the part of the Income-tax Officer himself and, therefore, he is not entitled to reopen the assessments under section 147(a) ?" This reference pertains to the assessment year 1975-76. The material facts giving rise to this reference, briefly stated, are as follows : The income of the assessees for the assessment year 1975-76 was assessed by the Income-tax Officer under section 143(3) of the Income-tax Act, 1961 ("the Act"). The assessees owned extensive lands situated in the heart of Panaji town which were valued by them as follows: ------------------------------------------------------------------------------------------------- Sl.No Name of the assessee Area Amount (in Rs.) ------------------------------------------------------------------------------------------------- 1. Mr. Joao de Deuz, Carvalho Vasco 5,481 sq. mtrs. 7,00,000 2. Mrs. Maria Jose Miranda Carvalho 6/7ths of the property 7,00,000 3. Miss Esther P. Carvalho, Goa 1/7th of the property 2,40,000 4. Mr. Manual F. de Carvalho 1,866 sq. mtrs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear non-disclosure of the primary facts by the assessees, the Income-tax Officer was justified in exercising power under section 147(a) (if the Act and reopen the assessments and reassess the income of the assessees. The Tribunal did not accept the above contention of the Revenue, as it was also of the view that while making the assessment of the firm, Carvalho Real Estate, of which the assessees were partners, the Income-tax Officer was aware of the fact of transfer of the lands belonging to the assessees to the firm and hence there was no necessity for the assessees to disclose those facts in their individual returns. The Tribunal observed that it was a case of omission on the part of the Income-tax Officer himself. The Tribunal, therefore, upheld the order of the Commissioner (Appeals) and dismissed the appeal of the Revenue. Hence, this reference at the instance of the Revenue. We have heard Mr. R. V. Desai, learned counsel for the Revenue, who submits that this is a clear case of non-disclosure of material facts necessary for the assessment by the assessees. He, therefore, submits that the Income-tax Officer was justified in exercising power under section 147(a) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year). Explanation 1.---- For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :---- (a) where income chargeable to tax has been underassessed or (b) where such income has been assessed at too low a rate or (c) where such income has been made the subject of excessive relief under this Act or under the Indian Income-tax Act, 1922 (11 of 1922); or (d) where excessive loss or depreciation allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry for assessment. Obviously, there was a failure on the part of the assessees to disclose material facts relevant for the assessment of capital gains on transfer of lands by them to the partnership firm. The lands were transferred by the assessees to the firm which resulted in capital gains chargeable to tax. In the return of income furnished by the assessees, there was no mention of the transfer of the lands by the assessees to the firm. The Income-tax Officer discovered this omission, may be from the assessment of the firm to which the lands in question were transferred by the assessees. Having found that the assessees had not disclosed the fact of transfer of lands by them to the partnership firm which resulted in escapement of capital gain arising therefrom to tax, the Income-tax Officer initiated proceedings under section 147(a) of the Act and assessed the capital gain to tax. We do not find any infirmity in the above action of the Income-tax Officer. In our opinion, the Income-tax Officer rightly initiated reassessment proceedings under section 147(a) of the Act on the basis of information which was specific, relevant and reliable under section 147(a) of the Act, as the esca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56 (Bom), during the accounting year relevant to the assessment year 1987-88, the assessee had received a sum of Rs. 45 lakhs for the assignment of his beneficial interest in Lokhandwala Developers. The assessee showed this amount in his return of income as a receipt and claimed the same to be exempt from levy of capital gains tax on the basis of the decision of the Supreme Court in CIT v. B. C. Srinivasa Setty [1981] 128 ITR 294, wherein it was held that there will be no capital gains from the transfer of a capital asset if its cost of acquisition was nil. This claim of the assessee was allowed by the Assessing Officer. After the completion of the assessment, the Assessing Officer discovered that the cost of the beneficial interest of the assessee in the property transferred for a sum of Rs. 45 lakhs was Rs. 300. This was found on a perusal of the trust deed as well as the deed of assignment which showed that the assessee, who was a beneficiary of the trust, was entitled not only to 30 per cent. of the net income of the trust but also to a 30 per cent. share of the corpus of the trust. It was found that the share in the corpus of the trust was the cost of the beneficial interest o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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