- (1.) THESE appeals are directed against the judgment and order of the Tribunal in IT Appeal No. 972, 973, 974 and 359/Jp/1993. Assessment years involved are 1986-87 to 1989-90. The assessments for the asst. yrSection 1986-87, 1987-88 and 1988-89 were completed under Section 143(1) and thereafter notice was issued under Section 148 of the Act 1961. During the course of the reassessment proceedings, the ITO had inquired that after transfer of the plant and machinery, the lease amount received on account of transfer, whether can be treated as a business income ? On considering reply, the AO has negatived the claim of the assesses and expenditure claimed on the basis of business income, that expenses were disallowed.
(2.) IN appeal before the CIT(A), the CIT(A) has allowed 25 per cent of the total expenditure claimed as expenditure incurred for purpose of earning the income. IN appeal before the Tribunal, the Tribunal has restored the matter to the AO, to examine the lease agreement vis-a-vis the balance sheets in the light of the discussion in the order of the Tribunal. For asst. yr. 1989-90, the lease amount received after transfer of the plant and machinery has been treated as income from other sources. The Tribunal has remitted that matter back to the AO to examine the lease agreement and also examine the balance sheet and then find out whether on transfer the receipt on account of the lease amount can be taxed as income from business or income from other sources. Mr. Singhal, learned counsel for the assessee, submits that firstly there was no information with the AO to reopen the assessment within the meaning of Section 147(b) r/w Section 148. He further submits that secondly even in the year 1980-81, the income in the form of lease money, on account of transfer of plant and machinery, was treated as business income. Learned counsel for the Revenue submits that after amendment in Section 147 w.e.f. 1st April, 1989, the amended provision of Section 147 is applicable and notice for reopening has been issued on 15th Jan., 1991, for reassessment for the asst. yrs. 1986-87 to 1989-90. The requirement for reopening the assessment is that there should be the income escaped. In this case as matter has been remitted back to AO, he can reassess and tax that income which is escaped, on merits. The assessee can make his submissions before the AO. Whether the amended provisions of Section 147 which are amended w.e.f. 1st April, 1989, are applicable or not, the same issue has been considered by this Court in the case of Chandi Ram v. ITO and Anr. (1997) 225 ITR 611 (Raj) wherein this Court has considered and held that if limitation period has not expired, the amended provisions of Section 147 of the Act will be applicable. There is no dispute that limitation has not expired for the purpose of reassessment for the asst. yrs. 1986-87 to 1988-89 till notice has been issued in this case.
(3.) FOLLOWING our view, we find no force in the submission of learned counsel that reopening is bad. When income has escaped and when the agreement which goes to the root to the issue has not been placed on record nor considered to see whether in this case lease amount received should be treated as income from business. In absence of that, if income escaped, the ITO was justified in reopening of assessment. Whether lease income should be assessed as income from business and other sources that also has not been considered in 1980-81, that needs consideration. The Tribunal has only directed to consider the issue whether the lease amount received should be treated as income from business or income from other sources and allow the expenses in the light of decision referred in the order of Tribunal. That does not cause any prejudice to the assessee. In the result, we find no infirmity in the order of the Tribunal as assessee will be at liberty to make all submissions whether lease money should be treated as income from business or income from other sources. We find no infirmity in the order of the Tribunal. In the result, all the 4 appeals are dismissed. ;