Bhavnesh Saini, J.M. - (1.) THIS appeal by the assessee is directed against the order of the Commissioner (Appeals) -Ill, Luckow, dated 5 -12 -2002 for the assessment year 1993 -94 on the following grounds : "1. Because the proceedings under section 147 have neither been validly initiated nor concluded and the assessment order dated 30 -3 -2002 (passed in pursuance thereof) is liable to be declared as null and void. 1.2 Because the learned Commissioner (Appeals) -II, Lucknow, on a due consideration of the attendant facts and circumstances of the case, particularly that; (a) no proceedings were pending in the case of the appellant on 15 -3 -1999 when commission was issued in favour of DVO to estimate the cost of construction of the property. (b) for the reason mentioned at Serial No. (a) above, the commission issued in favour of the DVO was invalid and; (c) the report obtained as a result of such an invalid reference could not have constituted material for initiating proceedings under section 147; should have held that the entire proceedings right from commencement thereof to the conclusion in terms of the assessment order dated 30 -3 -2002, were without jurisdiction. 1.3 Because, otherwise also, the DVO's report by itself, dated 25 -11 -1999, could not have constituted the "material" so as to lead to the formation of "reason to believe" that any income had escaped assessment, and consequently the very initiation of proceedings under section 147 was illegal. 1.4 Because, in any case the "reasons recorded" by the learned assessing officer vide ordersheet entry dated 25 -1 -2001, could not have been held to have met the requirement of law and issuance of notice under section 148, on that basis, is wholly illegal. 2. Because the notice served on Shri Lal Sahab Singh cannot be treated to be the service of notice in accordance with the provisions of law and the assessment order dated 30 -3 -2002 based on such a notice is wholly without jurisdiction. Without prejudice to the aforesaid. 3. Because the authorities below have erred in law and on facts in holding that investment in construction of house property to the extent of Rs. 3,82,500 remained unexplained and in adding/sustaining by way of addition, to the income of the appellant is erroneous on facts as well as in law. 4. Because the appellant had sufficient documentary evidence to prove that; (a) construction on plot of land that had been purchased as early as in the year 1984, was in full swing during the financial year 1991 -92; and (b) on such construction, investment to the extent of Rs. 1,86,800 had duly been met in that year itself; and whole of the investments could not have been considered in the year under appeal. 5. Because the investment in house property was spread over in two financial years, relevant to the assessment years 1992 -93 and 1993 -94, as per the breakup given hereunder : JUDGEMENT_333_LAWS(ALL)9_2003.html (year under appeal) which stood fully proved by the "resources" available with the appellant and findings to the contrary are wholly erroneous, illegal and unjustified. 6. Because as far as the investment made during the year under appeal, to the extent of Rs. 5,31,700 is concerned, the said stood fully proved from: (a) the sum of Rs. 3,20,000 as had been taken as loan from the Bank; (b) other sources in the form of own savings and loans, etc., as were available with the appellant; and no addition on this score could have been validly made/sustained. 7. Because the order appealed against is vitiated by non -consideration of attendant facts and circumstances of the case and the same is not tenable, either on facts or in law; 8. Because in any case and wholly without prejudice to the various contentions as have been taken in the foregoing grounds, the quantum of estimate of cost of construction, as made by the DVO, is erroneous, much too high and excessive and addition made/sustained on the basis of such an estimate deserve to be substantially reduced. 9. Because the authorities below have erred in law and on facts in holding that the source of deposits of sums aggregating Rs. 50,000 in the Bank account remained unexplained and in making/upholding the addition for the same, to the income of the appellant. 9.1 Because wholly without prejudice to the contention raised in ground No. 9.1 above, the withdrawals out of Bank account (inclusive of withdrawals out of said sum) should have been held to be the sources available with the appellant for meeting the investment in house property. 10. Because the appellant disputes levy of interest under various sections, even on the ground independent of quantum of assessment. 11. Because the order appealed against is contrary to the facts, law and principles of natural justice."
(2.) THIS appeal was taken up for early hearing vide our order dated 6 -6 -2003 passed in stay petition No. 8 of 2003.
(3.) WE have heard the learned counsel for the assessee. The learned counsel for the assessee on earlier dates filed detailed paper book, copy was also given to the learned Departmental Representative. The paper book contained mainly copy of notice under section 148, reasons recorded by the assessing officer, order -sheet entries, copy of Inspector's report, balance sheet and capital account for the assessment year in question of the preceding three years, copy of the confirmatory letters, pass book of the depositors, copy of the notice issued by the City Magistrate, copy of the report of the DVO and the case law relied upon by the learned counsel for the assessee. However, none appeared on behalf of the revenue, therefore, revenue is proceeded ex parte. The brief facts taken from the record are that the Inspector of Income Tax submitted his report dated 27 -3 -1998 to the assessing officer intimating that the assessee was deriving rental income from UBI and construction of the property during the financial year relevant to the assessment year in question. It was also reported that the assessee is not assessed to tax and has not filed return of income. The assessing officer vide his letter dated 15 -3 -1999 made a reference to the DVO with regard to the valuation of the cost of construction of the property of the assessee. The DVO submitted his report to the assessing officer vide his report dated 25 -11 -1999. The assessing officer recorded the reasons for reopening of the assessment for the purpose of assessment/reassessment under section 147/148 of the Income Tax Act on dated 26 -1 -2001. The same is reproduced as below: There is a construction of building. The DVO, Income Tax department, Allahabad vide his letter F.No. AVOA/IT/(1) 7/99 -2000/314, dated 25 -11 -1999 has reported the valuation of the above building at Rs. 7,18,500 as against Rs. 3,50,000 shown by the assessee. The assessee has not furnished return on total income for the year. It appears that she has concealed the particulars of her income and therefore, I have reason to believe that the income chargeable to tax to the extent of Rs. 7,18,500 has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. Approval may kindly be accorded to issue notice under section 148 of thQ Income Tax Act, 1961. ;