TMI Blog1989 (9) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... on 147(b) of the Income-tax Act, 1961 ? (2) Was the Tribunal justified in its finding that the materials collected and relied, upon by the assessing officer for arriving at the market value of rubber trees as on January 1, 1954, are relevant ? For the assessment year 1975-76 : (1) On the facts and in the circumstances of the case, was the Tribunal right in holding that the assessment was validly reopened under section 147(b) of the Income-tax Act, 1961 ? (2) On the facts and in the circumstances of the case and in the light of the facts admitted in ground No. 2 of the appeal memorandum filed before the Tribunal, was the Tribunal justified in holding that the real 'information' for the reopening of the assessment was not the audit no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igated afresh and so the answer to the other questions referred by the Appellate Tribunal will be only academic. We proceed to consider whether the Income-tax Officer validly reopened the assessments under section 147(b) of the Income-tax Act for both the years. In considering the said question, the Appellate Tribunal adverted to the fact that the assessee had shown the receipts from the sale of old rubber trees in Part III of the original return. It was also found that no efforts were made to bring to tax the capital gains embedded in the said receipts. The Audit Department drew the attention of the Income-tax Officer to the fact that certain receipts are shown on sales of rubber trees and no steps were taken for computing the capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the information, relied on for the purpose of reopening the assessments was there even at the time when the original assessments were made, the concerned Income-tax Officer did not apply his mind, nor adverted to the fact of capital gains, and in such circumstances, the proceedings under section 147(b) are not barred. On hearing the rival contentions of the parties, we are of the view that the reopening of the assessments is valid. The Appellate Tribunal, in our opinion, correctly held that the audit report in this case only drew the attention of the Income-tax Officer to the omission, namely, that the capital gains, which accrued, was not brought to tax. The Appellate Tribunal on the basis of materials available before it, held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessments for the two years. Even if the assessee disclosed in the original return the factum of sale of rubber trees and had claimed that it was exempt from tax, if the legal implications were not realised by the Income-tax Officer then, it will not preclude the Income-tax Officer from reopening the assessments on subsequent realisation that income has really escaped assessment. The details available in the original returns were transmitted into an item of information in the possession of the Officer on when its existence is realised and its implications are recognised. A Division Bench of this court in United Mercantile Co. Ltd. v. CIT [1967] 64 ITR 218 has held so. The said decision was referred to with approval by the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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