Y.R. Meena, J. - (1.) ON an application under Section 256(2) of the Income-tax Act, 1961, this court has directed the Tribunal to refer the following questions set out in para. 1 at page 2 of the application : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in annulling the impugned order of the Commissioner of Income-tax dated June 10, 1986, passed under Section 263 of the Income-tax Act, 1961 ?
(2.) WHETHER the findings of the Tribunal leading to the conclusion that the order of the Commissioner of Income-tax dated June 10,1986, was not valid in law are unreasonable and perverse ?" 2. The assessee is a partnership firm and the firm carries on business of construction equipment, building materials, electrical fittings, acquiring and own-ing immovable properties, real estates, including rights therein, renting out properties as acquired and also deals in shares and securities. The assessment years involved in this case are 1981-82 to 1985-86. The assessments in all these years are completed under Section 143(3) of the Act. On a scrutiny of the assessment records for these years the Commissioner of Income-tax has taken the view that the assessment orders in these years of the Income-tax Officer are erroneous and prejudicial to the interests of the Revenue on the following grounds : "(i) The price of the leasehold land was found to be of the order of Rs. 24 lakhs. (ii) The acquisition of the leasehold right over 21 cottahs of land for a period of 75 years against the consideration of a mere deposit of Rs. 1 lakh. (iii) While the cost of construction of building was computed at Rs. 100 per sft. The seized records indicated a much higher cost of construction as indicated therein, in the sale of premises. (iv) The receipts of on-money involved. (v) The proceeds on the demolition of the old building not estimated correctly. (vi) The crediting or the personal accounts of the partners on revaluation of the leasehold property to the extent of Rs. 74,12,700 without a corresponding reflection in the wealth-tax returns of the respective partners ; and (vii) Non-verification of the loans alleged to have been received." A show-cause notice was issued to the assessee by the Commissioner of Income-tax, why these assessment orders in these years should not be revised under Section 263of the Act. After hearing the assessee, the Commissioner of Income-tax in his order held that- (a) The price of land paid by the assessee to the lessor could be taken at Rs. 22,84,168. (b) The assessee has received on-money to the tune of Rs. 1,02,45,000 on the sale of flats. (c) The Assessing Officer should have included Rs. 51,000 towards the sale proceeds from the sale of materials which was sold by the assessee on demolition of the old building. Therefore, the Commissioner of Income-tax has directed the Assessing Officer to examine the question regarding cost of construction of the building, receipt of on money, examine to add Rs. 23,000 on account of sale proceeds of the building material and verify the loans which the assessee claimed to have taken from different parties.
(3.) THE case of the assessee before the Tribunal was that there was no material before the Commissioner of Income-tax to estimate the cost of land at Rs. 22,84,168, which was taken on lease. THE assessment order was passed and assessment proceedings were monitored by the Commissioner of Income-tax (Investigation), all the relevant materials were collected and on record for making the assessments, the on money theory of the Commissioner is baseless. For sale proceeds of the building material the assessee has explained that though earlier the amount of Rs. 51,000 was offered by A.R. Sharma but that could not be accepted as there was stay of the court on demolition work. THErefore, that firm withdrew from the offer and the material ultimately was sold for Rs. 28,000. THErefore, there is no question of taking sale proceeds at Rs. 51,000 against Rs. 28,000. The Tribunal has framed (vii) questions to consider whether the Commissioner of Income-tax was justified in setting aside the assessment orders and the questions which are as under : (i) Whether the assessments are made without proper enquiry by the Income-tax Officer ? (ii) the price of the leasehold land was found to be of the order of Rs. 24 lakhs and the leasehold right over 21 cottahs of land for a period of 75 years against the consideration of a mere deposit of Rs. 1 lakh whether justified ? (iii) while the cost of construction of building was computed at Rs. 100 per sq. ft. The seized records indicated a much higher cost of construction as indicated therein, in the sale of premises ; (iv) the receipts of on money involved ; (v) the proceeds on the demolition of the old building ; (vi) the crediting of the personal accounts of the partners on revaluation of the leasehold property to the extent of Rs. 74,12,700 without a corresponding reflection in the wealth-tax returns of the respective partners ; and (vii) Non-verification of the loans alleged to have been received. ;