Law:

Section:

Section 34(1)(b) of the indian Income-tax Act, 1922 [Corresponding to section 147(b) of the income-tax act, 1961]-Reassessment-Information-Assessee-company owned building partly let out and partly occupied in business-Assessee declared rental income as business income computed under section 10 of the 1922 act and ITO accepted the same in original assessment after further obtaining some more data-Whether reassessment proceedings subsequently initiated to assess rental income under section 9 instead of section 10 valid and justified-Held, on facts, no Facts The assessee-company had purchased a building part of which was partly occupied by its mining department and the rest by tenants ever since its purchase. In its return for the assessment year 1957-58, the assessee included the rental income from this building amounting to Rs. 10,271 as its business income and claimed deduction of certain expenses in computing the said income which were disallowed by the ITO in the assessment He, however, allowed "depreciation" on the cost of the building. Subsequently, after making some enquiries from the assessee, the ITO reopened the assessment on the ground that income from the said building was computable under section 9 instead of section 10 and that it had not been offered under the correct head in the original return resulting in under assessment. On appeal, the AAC found ( i)that the assessee had filed the relevant profit and loss account with the original return and had shown rental income as "rent receivable" in its balance sheet; and (ii) that details of repair charges were furnished under the caption "spent on repairs to the company's building occupied by its mining department". The AAC observed that the said information with regard to facts was not sufficient for coming to any conclusion as these did not indicate that the said building was owned by the assessee and rent was received from the tenants and that it was, reasonable to infer that the entire building was occupied by the mining department throughout the previous year so that it could not be said that all the relevant facts were available to the ITO at the time of original assessment to come to a correct…

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