Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment years 1973-74 and 1974-75 - Assessee constructed a house - He disclosed amount spent on construction in his books and subsequently disclosed a further sum invested in construction under VDS - Department assessed value at a higher figure and made addition of Rs. 53,000 in each assessment year which was reduced to Rs. 32,500 on appeal - Subsequently, notices under section 148 were issued and assessments were completed making addition of Rs. 32,500 in each of assessment years which assessee disputed as unwarranted and time-barred - Whether since assessee had not disclosed all primary facts and had withheld information with regard to factum of construction being in progress and investment made on such construction, reopening of assessment was justified - Held, yes - Whether even though amount of addition was less than Rs. 50,000, as Rs. 32,500 was part of larger sum of Rs. 1,30,000, reopening could not be considered as unwarranted - Held, yes V.S. Jayakumar for the Applicant. T.C.A. Ramanujam for the Respondent. JUDGMENT R. Jayasimha Babu, J. - The assessee constructed a house commencing some time in the year 1971 and completed it in November, 1974. The assessee had disclosed in his books the amounts spent by him on that construction as Rs. 2,12,000. He subsequently disclosed a further sum of Rs. 60,000 as having been invested in such construction under the voluntary disclosure scheme. After the house was completed in the assessment year 1975-76, the Department assessed the value of that construction at Rs. 4,98,500. The differences between the amount disclosed by the assessee and the value as found by the Department was directed to be spread over during the assessment years 1972-73 to 1975-76. The amount of addition to be made each year came to Rs. 53,000. 2. The assessee filed an appeal against that order of assessment for the assessment year 1975-76 and the appeal came to be allowed on April 26, 1982, in which the cost of construction was assessed at Rs. 4,48,000 instead of Rs. 4,98,500. The appellate authority also directed that the addition be…

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