K.C. Agrawal, C.J. - (1.) THE following question has been referred under Section 256(1) of the Income-tax Act, 1961 (for short, "the Act"), by the Income-tax Appellate Tribunal for opinion, to the High Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Income-tax Officer was not justified in starting proceedings under Section 147(b) of the Income-tax Act, 1961 ?"
(2.) THE year of assessment is 1972-73. The assessee purchased a plot of land measuring 2,077.80 sq. yards in the retreat area of Prithviraj Road, SMS Highway, near the hospital on June 20, 1975, from Messrs. Vinaychand Pravind Chand (Hindu undivided family). As the income-tax authorities felt that the land was sold at a low price, the matter was referred to the Executive Engineer, Valuation, Unit-I, Jaipur, under Section 55A of the Income-tax Act, 1961, read with Section 16A(5) of the Wealth-tax Act, 1957. The valuation was estimated at Rs. 1,58,400. Since the assessee had claimed that she purchased the land for Rs. 1,04,000, the case was reopened under Section 147(b) of the Income-tax Act on the ground that the assessee declared a lesser amount than actually paid. The Income-tax Officer was not satisfied with the explanation of the assessee, and consequently held that a sum of Rs. 54,400 had escaped assessment and it was added in the hands of the assessee. Against the order of the Income-tax Officer, an appeal was filed under Section 246 of the Act before the Appellate Assistant Commissioner of Income-tax. The Appellate Assistant Commissioner found that Rs. 54,400 had been added in the hands of the assessee. In the further appeal, the Income-tax Appellate Tribunal, by taking a view different from what has been taken by the authorities below, allowed the appeal and quashed the orders of the two authorities below. Against this order, the Department moved an application for referring two questions out of which one of them referred was quoted above. Learned counsel for the Department urged that, as the value of the land purchased was deliberately underestimated and was not correctly shown, the Department, under Section 147(b) of the Act, could take proceedings for reassessment. It is also contended that the valuer's report was "information" within the meaning of that expression used in Section 147(b) of the Act and, therefore, reassessment proceedings could be initiated against the assessee on that basis. The Income-tax Appellate Tribunal was of the view that it had not been proved by the Revenue that the assessee had invested Rs. 1,04,000 in the purchase of the plot. The Income-tax Appellate Tribunal further held that, whereas the case was of the year 1971-72, the report was obtained in 1974.
(3.) ON the ground that the valuer's report was not conclusive, escapement was not found established and as such the addition made by the Appellate Assistant Commissioner was not justified. Hence, the reference is liable to be answered against the Revenue on the ground that the controversy raised by it was one of fact and was beyond the scope of Section 256(1) of the Act. ON an appraisal of evidence, the Income-tax Appellate Tribunal found that no escapement had been established. As the final determination of the issue did not involve the application of any principle of law, interference with the judgment of the Income-tax Appellate Tribunal would be on facts. Consequently, this question deserves to be decided against the Revenue on this ground. In J.K. Synthetics Ltd. v. CIT [1981] 130 ITR 23, the Supreme Court reversed the High Court's judgment, which interfered on a question of fact Apart from what has been said above, on merits also, we find that the question has to be answered against the Department on the ground that no proceedings under Section 147(b) of the Act could be initiated on the basis of the valuer's report. It is only an information which, without being substantiated by convincing evidence or circumstances, could not be the basis for reopening of an assessment order. In L.B. Kharawala v. ITO [1984] 147 ITR 67 (Guj), Dinkarrai Anantrai Mankad v. ITO [1985] 155 ITR 406 (Guj) and Sardar Kehar Singh v. CIT [1992] 195 ITR 769 (Raj), it has been held that the valuation report did not constitute information under Clause (b) of Section 147 of the Act and as such the same cannot be a valid basis for reassessment. ;