TMI Blog1993 (11) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-4-1979. The Assessing Officer made a reference under section 131(1)(d) of the Income-tax Act to the Valuation Officer who prepared a report as regards the cost of construction of the property in question. The Valuation Officer estimated the cost of construction at Rs. 2,94,000 vide his report dated 19-1-1985. There was thus a difference of Rs. 1,15,320 in the cost of construction shown by the assessee at Rs. 1,78,000 and the cost of construction determined by the Valuation Officer at Rs. 2,94,000. Consequently proceedings under section 147(b) of the Act were initiated by the Assessing Officer. The Assessing Officer treated the difference of Rs. 1,15,320 as unexplained investment and hence the income of the assessee. 3. The assessee pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llity, it could not be set aside and hence the first appellate authority had committed an error in setting aside the issue for a fresh decision by the Assessing Officer. 5. The learned D.R. strongly supported the order of the first appellate authority. 6. We have carefully considered the rival submissions as also the facts on records. Before an Assessing Officer can exercise his jurisdiction under section 147(b) of the Act, the following two conditions have to be satisfied: (1) The Assessing Officer must have reason to believe that income chargeable to tax had escaped assessment; and (2) He must have reasons to entertain that belief in consequence of 'information' which he has in his possession. As held by the Gujarat High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a tax clearance certificate under section 230A(1) of the Act with a view to effecting a proposed sale of the property to an Embassy. In that application, the proposed sale price was shown at Rs. 27,65,825 of which the sum of Rs. 23,65,825 was indicated as payable to the Government as unearned increase in price. On the basis of information in that application, the Assessing Officer took action under section 17(1)(b) of the Wealth-tax Act and the High Court held that there was no lack of jurisdiction to issue notice for those years. The High Court observed that clauses (a) and (b) of sub-section (1) of section 17 of the Wealth-tax Act contemplated different situations for exercise of jurisdiction but the same set of facts may be basis fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had received information regarding the market value of the asset at the time of sale, he had reason to believe that capital gains had escaped assessment and the provisions of section 147(b) were applicable. 10. In the case of CWT v. Chhatrshal Sinhji D. Zala [1982] 135 ITR 826 (Guj.), the facts were that the assessee declared market value of the property it Rs. 3,77,200 on the basis of the valuation report for assessment year 1968-69. On that basis, the Assessing Officer reopened proceedings for earlier assessment years, namely, assessment years 1966-67 and 1967-68. The High Court held that the valuer's report submitted by the assessee himself for assessment year 1968-69 constituted information on the basis of which assessments could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst figure of Rs. 1,54,400 and the second figure of Rs. 2,33,940. On these facts, the High Court held that on the basis of a subsequent valuation report, it could not be said that the assessee was guilty of not disclosing fully and truly all material facts necessary for assessment of his case. 13. From the above, it would be seen that that case is distinguishable from the present case for the simple reason that in that case proceedings had been taken under section 147(a) whereas in the present case, the proceedings have been taken under section 147(b) of the Act. Moreover, in that case, the Assessing Officer had accepted the valuation given by the assessee's registered valuer and later on he wanted to substitute the value of the Valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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