Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - General - Assessment years 1958-59 and 1959-60 - For relevant assessment years, ITO reopened assessment taking a view that assessee had not furnished true particulars regarding construction of house property, investment made therein and amounts obtained from certain parties - Tribunal, however, found that in support of borrowings, assessee had filed confirmatory letters, copies of accounts, interest paid to parties etc. - So for as investment in house property was concerned, Tribunal observed that in original assessment itself, there was discussion at length regarding construction of property by ITO - In view of aforesaid circumstances, Tribunal set aside orders of reassessment - Whether having regard to Tribunal's order in light of provisions of section 147(a), it could be concluded that assessee had disclosed fully and truly all material facts at time of original assessment, and therefore, Tribunal was justified in holding that reassessment proceedings initiated by ITO were not valid in law - Held, yes FACTS For the relevant assessment years, the original assessments were completed. Subsequently the ITO found that the assessee had not furnished the true particulars regarding the construction of the house property the investment made therein and the amounts obtained from certain parties. Proceedings under section 147 for reassessment of the income were initiated by issue of notice under section 148. On second appeal, the Tribunal found that the assessee borrowed various amounts from several parties in support of which he filed confirmatory letters, copies of the accounts, interest paid to the parties, copy of profit and loss account and balance-sheet. All the parties had admitted that they had advanced loans to the assessee. Under such circumstances, the Tribunal observed that it could not be said that the assessee had not disclosed true and material facts at the time of the original assessment. So far as the assessment year 1959-60 was concerned in which the investment in the house property was involved, the Tribunal, observed that, in the original assessment itself, there was discussion…

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