AJIT K.SENGUPTA, J. - (1.) IN this reference under s. 256(1) of the IT Act, 1961 for the asst. yr. 1983-84 the following question of law has been referred to this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessment proceedings under s. 147(a) r/w s. 148 of the IT Act, 1961 as per recorded reasons under s. 148(2) is valid in law ?" Briefly stated the facts are that the original assessment in the case of the assessee was made more or less on the basis of the return filed. In the course of assessment proceedings, the assessee filed a statement in regard to the transactions with M/s New Age Corporation in which the credit balance was shown at Rs. 60,000 which was duly confirmed by the creditor.
(2.) WHEN the assessment for the asst. yr. 1984-85 was taken up the Assessing Officer noticed that a sum of Rs. 60,000 which was shown as payable to New Age Corporation as on 31st Dec., 1982 was not shown in the opening balance as on 1st Jan., 1983. The Assessing Officer verified the books of account of the assessee and found that no amount was payable by the assessee to New Age Corporation on 31st Dec., 1982. He, therefore, reopened the assessment for the asst. yr. 1983-84 under s. 147(a) of the IT Act, 1961 by the issue of notice under s. 148 dt. 3rd Jan., 1986. The following reasons have been recorded for reopening the assessment for the asst. yr. 1983-84 : "3rd Jan., 1986 1983-84 Under s. 147 In the balance-sheet as at 31st Dec., 1983 relevant for the asst. yr. 1983-84 assessee has shown loan outstanding of Rs. 60,000 to M/s New Age Corporation. Loan Confirmation filed as well as verification of books of accounts with reference to bank statement of M/s New Age Corporation show that assessee has no dues as loan payable to M/s New Age Corporation on 31st Dec., 1982. As such said amount of Rs. 60,000 is assessee's cash credit for the asst. yr. 1983-84. In view of the above, I have reason to believe that assessee failed to disclose fully and truly all material facts necessary for assessments for asst. yr. 1983-84 and income chargeable to tax has escaped assessment for the asst. yr. 1983-84. Issue notice under s. 148. sd. M.M. Mazumdar." Various explanations were offered by the assessee in regard to the discrepancy in the balance- sheet. The Assessing Officer, however, rejected the explanations as not acceptable and assessed the sum of Rs. 60,000 observing that the amount was rightly assessable as cash credit for the period relevant to the asst. yr. 1983-84.
(3.) AGGRIEVED by the said order of assessment, the assessee took up the matter in appeal before the CIT(A) and raised various points challenging the validity of reopening of assessment and also of the assessability for the year under consideration. The learned CIT(A) accepted the contention and held that the reasons recorded by the Assessing Officer for reopening of the assessment were factually wrong and hence the reopening of the assessment was invalid. The learned CIT(A) further held that the statement in the balance-sheet as on 31st Dec., 1982 that an amount of Rs. 60,000 was due to M/s New Age Corporation was not based on the entries in the books of account maintained and, therefore, it cannot be held that the income chargeable to tax escaped assessment in the absence of actual entry of credit of such amount in the assessee's books of account. The learned CIT(A) held that additional reasons cannot be imported to substantiate the issue of notice under s. 148. The learned CIT(A) further held that the mere difference in the balance-sheet involving assets being in excess of liabilities will not automatically result in income chargeable to tax escaping assessment. Even in any case it was his view that the amount of Rs. 60,000 cannot be assessed as income under s. 68 of the Act. He accordingly deleted the addition of Rs. 60,000.;