- (1.) THIS appeal, has been filed, by the Revenue, seeking to challenge the judgment of the Tribunal dt. 3rd Jan., 2005 reported as Asstt. CIT v. Pokar Hotel : (2006) 101 TTJ (Jd) 1042 Ed., affirming the order of the CIT(A), dt. 19th May, 2000, whereby he had set aside the reassessment order, made by the Dy. CIT on 24th March, 2000.
(2.) THE appeal was admitted on 9th March, 2006, by framing following substantial question of law: Whether in the facts and circumstances of the case, the Tribunal was right in holding that the proceedings under Section 147/148 of IT Act, 1961, were not validly initiated against the assessee? The necessary facts are, that for the relevant asst. yr. 1993 -94, the assessee filed return on 1st Sept., 1993, which was processed under Section 143(1)(a) on 23rd Nov., 1993. The assessment was reopened, and notice under Section 148 was served, on 29th March, 1998. As appears from the assessment order, that action under Section 132(1) was carried out, at the residence of Shri Pokar Bhati, and his sons on 29th Nov., 1994, and simultaneously, survey was conducted at Pokar Hotel under Section 133A. In the course of survey, it was noticed that the assessee made substantial investment in the hotel building, which was constructed, during the period, relevant to the asst. yrs. 1991 -92 to 1995 -96, however major investment was made, in the period, relevant to assessment year under consideration, being 1993 -94, which was not found supported with bills and vouchers, reference was made under Section 131(1)(d), to the valuation cell of the IT Department. The valuation officer vide report dt. 19th Jan., 1996, determined the cost of construction of the hotel building, at Rs. 25,30,000 as against Rs. 18,11,444, shown by the assessee. Thus, it is on this basis, that notice under Section 148 was issued, and AO, ultimately, made an addition of Rs. 4,92,346, as unexplained investment, in construction of the hotel building, and passed the assessment order, and also directed the levy of interests, under Sections 234A, 234B and 234C, and for initiation of penalty proceedings, under Section 271(1)(c).
(3.) THIS order was challenged in appeal, on the ground, that the reopening proceedings have been initiated on the basis of DVO's report, which was contended to be not a permissible ground, for reopening of the assessment, and that contention was decided in favour of the assessee by the learned CIT(A) and the learned Tribunal.;