COMMISSIONER OF INCOME-TAX Vs. BHAWANI SHANKAR WAS

JUDGEMENT

(1.) IN all these appeals filed under Section 260A of the Income -tax Act, 1961, the facts and issues are the same although the appeals themselves pertain to different assessment years. For this reason, all these appeals are being disposed of by this common judgment and order since the substantial questions of law involved in all these appeals are common.

(2.) THE leading appeal in the present bunch of appeal is bearing No. I.T.A. No. 125 of 2007 which is directed against the judgment and order dated February 23, 2007, passed by the Income -tax Appellate Tribunal (hereinafter referred to as 'the ITAT') whereby the said authority has allowed the appeal of the assessee and has set aside the order of the Assessing Officer as well as that of the learned Commissioner of Income -tax (Appeals) (hereinafter referred to as 'the CIT(A)').

(3.) BRIEF facts of the case are as follows: For the assessment year 1998 -99, the assessee, Shri Bhawani Shankar Vyas, proprietor of M/s. Shiva Sanitary Store had filed its return declaring an income of Rs. 90,350. The case was processed under Section 143(1) on May 14, 1999. The case was then fixed for scrutiny and notices issued by the concerned Income -tax Officer on August 27, 1999, which was served upon the assessee on August 31, 1999. The assessee is a proprietor of M/s. Shiva Sanitary Store and has disclosed the income from purchase and sale of sanitary items. For the said assessment year, the assessee had filed two balance -sheets, (A) for M/s. Shiva Sanitary Store, and (B) for M/s. Hotel Gangore. Notice under Section 142(1) was issued by the Income -tax Officer on July 26, 2000, which was served upon the assessee on the same date. In this notice, information was sought from the assessee on various aspects of his income. Subsequently, a notice under Section 143(3) dated October 31, 2000, was served on the assessee and he was required to furnish details along with evidence in respect of electric equipment of Rs. 2,49,057, furniture and fixture of Rs. 3,30,876, fire saver at Rs. 6,875 and telephone equipment of Rs. 52,100 as shown in the balance -sheet of M/s Hotel Gangore as on March 31, 19981 The assessee was also requested to give the complete detail of the building construction shown at Rs. 14,00,805.77 in the balance -sheet as on March 31, 1998. Thereafter, the Income -tax Officer referred the matter to the valuation cell. The Valuation Officer in his valuation report as against the valuation declared by the assessee for the entire period as Rs. 21,36,643.77 had given the value of Rs. 56,55,000. Opportunity was given to the assessee to substantiate the difference between the assessee's valuation and valuation of the Valuation Officer.