TMI Blog1976 (12) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... installation and constructions were done in the relevant financial year. The ITO passed an order under s. 143(3) accepting the claim made by the petitioner that no business was made in that year. The residential premises of the petitioner were searched in August, 1972, under s. 132 of the Act and in the course of investigation the valuation of the petitioner's cold storage was referred to the Valuation Officer. His report was submitted on 20th February, 1975, and therein the investment in the construction of the building portion only was estimated at Rs. 1,46,530 during the financial year for the assessment year 1961-62. The ITO, on a perusal of that report, issued a notice to the petitioner under s. 148 stating that he had reason to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urged that the argument raised on behalf of the petitioner that the building, plant and machinery should be considered as separate items of investment was misconceived and that the notice issued, in the circumstances, was justified and was in accordance with the law. The conditions on the fulfilment of which the ITO acquires jurisdiction to issue a notice under s. 148 have been pointed out by the Supreme Court in a very recent decision in ITO v. Lakhmani Mewal Das [1976] 103, ITR 437, 445. The court, after pointing out the necessary conditions, proceeded to add : " We may add that the duty which is cast upon the assessee is to make a true and full disclosure of the primary facts at the time of the original assessment. Production befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate the investment in the construction of the building portion only for the assessment year 1961-62 at Rs. 1,46,530." Annexure A to the report is the abstract of cost. The relevant portion of it reads as follows : Rs. 1. Cold storage main building, two chambers including insulation of walls and A. C. sheet roof, etc., all complete 62,236 2. Wooden staging (three floors) for stocking perishable including insulated ceiling, wooden staircase, etc., all complete for storage. 64,352 3. Land including boundary walls. 11,330 -------------- Total 1,46,530 ------------- Out of the total value of the investment of Rs. 1,46,530 on the cold storage, as estimated by the valuation officer, the sum of Rs. 64,352 was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment, he was entitled to take into consideration the difference between the total investment on the cold storage in the assessment year 1961-62 as valued by the valuation officer and the total investment as disclosed by the petitioner during the assessment for that year, that as such difference exceeded Rs. 50,000, the ITO had reason to believe that the income which had escaped assessment for the assessment year 1961-62 exceeded Rs. 50,000. In reply, Shri Hajela pointed out that in his report to the CBDT setting out the reasons for initiating proceedings under s. 148 of the I.T. Act, 1961(produced as annexure C to the counter-affidavit), the ITO had stated that the reason for his belief that income had escaped assessment was that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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