TMI Blog1998 (2) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... he immovable property the rental for 12 months proportionately ought to have been taken and the value should not have been determined just on the basis of four months rental. The Assessing Officer, therefore, issued notice for proposed rectification in respect of the above. The assessee submitted reply raising therein objections to the proposed rectification. Accordingly the Assessing Officer dropped the rectification proceedings by not proceeding further though no specific order regarding dropping of the proceedings was passed. Thereafter the Assessing Officer issued notice u/s 17 of the W.T. Act for reassessment and thereafter completed the reassessment under section 16(3)/17 by taking the value of the said immovable property at Rs. 11,42,438 in the case of Aditya Narula and at Rs. 11,41,550 in the case of Chetanya Narula on 27-3-96 and 29-3-96 respectively (the date being revealed from the calendar of events furnished by the ld. A.R.). Aggrieved against that, the assessee preferred appeal before the DCWT(A) who vide his impugned order, directed the Assessing Officer to recompute the assessee's net wealth by taking the value of the property in question as disclosed by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has contended that the Assessing Officer did not bring any fresh material on record to show that there has been under-assessment. He has cited Garden Silk Mills Ltd. v. Dy. CIT [1997] 90 Taxman 421(Guj.). He has referred to page 2 of the paper book and contended that the assessee had computed the value of this immovable property as per Part-B of Schedule - III of the W.T. Act and therein the assessee had clearly shown the rent received Rs. 9,000 per month and multiplied the same by 4, the resultant figure coming to Rs. 36,000 and working out of the net maintainable rent was done on the basis of that amount and the capitalisation of rental value by adopting multiplier of 12.5 was done on the basis of the net maintainable rent determined by the above taking of the four months' rent. He has contended that there is no fresh material on record where from the Assessing Officer has noticed any escapement. He has also contended that even otherwise there is no mistake in the aforesaid computation and the acceptance thereof by the Assessing Officer in the original assessment for the reason that under rule 8(a) of Schedule - III to the W.T. Act if it is not practicable to apply the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fully and truly disclosed at the stage of original assessment, the ITO is not entitled on change of opinion to commence re-assessment proceedings under section 34(1)(a) of I.T. Act, 1922. Similarly Sunrolling Mills (P.) Ltd.'s case also the Hon'ble jurisdictional High Court has held that ITO was proceeding on a mere change of opinion. it was further held that there was no specific finding by the Tribunal that the assessee had not properly accounted for the recovery out of wastage account and that even if there was a finding it was confined to the assessment year 1976-77. In that case, the questioned reassessment proceedings were in respect of the assessment years 1978-79 to 1981-82. Obviously the cited decisions apply on the specific facts of the particular cases. From the perusal of the provisions of section 17(1) we do not find it to be a requirement of law that the reason to believe regarding escapement of wealth must necessarily ensue from fresh material coming on record subsequent to the assessment order. The Assessing Officer's belief regarding the escapement of wealth from assessment may as well emanate from the facts already on record even at the stage of assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 17(1) stands applicable in the matter the Assessing Officer could well, subsequent to the original assessment, on realising the said mistake, may justifiably have reasons to believe that the wealth has escaped assessment, which in the circumstances, can be said to be due to 'under assessment' as also 'or otherwise'. The ld. A.R.'s contention that after dropping rectification, re-assessment on the same point, is not permissible in view of P. Palaniswami's case is also in our view not weighty. In P. Palaniswami's case rectification to the effect of withdrawing depreciation had been done holding there to be a mistake in allowing depreciation in original assessment. The AAC cancelled the rectification order holding that there was no mistake on the part of the Assessing Officer in allowing depreciation. In the circumstances the Hon'ble High Court held that there was no escapement of taxable income and this order had become final as the department not only did not file any appeal against the order but actually took a decision to accept it. The assessee gets no advantage from the citation for the reason of the facts being different. In the cited case there was a clear finding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He has, therefore, contended that the assessee's contention throughout has been that reopening is not valid and that the assessee's ground Nos. 1, 2 and 3 before the DCWT(A) were specifically taken by way of challenge to the reopening and the ld. DCWT(A) has also given his finding in the last para on page 5 of his order. He has specifically drawn our attention to the said finding of DCWT(A) wherein he has observed that in his opinion the Assessing Officer was not having scope to invoke the provisions of section 17 of the Act and that the Assessing Officer while taking the valuation at Rs. 11,41,55 0 as against the disclosed valuation of property in question at Rs. 3,76,550 acted without appreciating the provisions of law and that in his opinion re-opening the case by Assessing Officer was based on change of opinion. As against this, the ld. D.R. of revenue has contended that the revenue has, in the ground of appeal taken before the Tribunal, challenged the operative part of the DCWT(A)'s impugned order as not legally justified. He has contended that the computation of assessee's wealth by working out the questioned valuation of the immovable property by taking the rent of four mont ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
