COMMISSIONER OF INCOME TAX Vs. SHIRINBAI ABDULLABHAI

JUDGEMENT

(1.) As per our directions on an application under Section 256(2) of the Income-tax Act, 1961, the following question has been referred to this court for the opinion of this court :

(2.) The asessee filed return of income in July 1974, showing income from house property at Rs. 6,785. The assessment was completed under Section 143(3) on March 29, 1977, accepting the returned income. Subsequently, the Inspector of Income-tax was deputed to evaluate the investment made by the assessee in the construction of a house property at P-l, Hyde Lane, Calcutta, who reported in the matter stating that the house has been constructed by the assessee and his wives jointly, viz., Smt. Fatemabai Hassenali and Smt. Fizza Abbasbhai. A lift has also been installed in that house. As per the report of the Inspector the investment cost during the year is Rs. 8,08,000 as against Rs. 5,08,776 shown by the three co-owners. The difference comes to more than Rs. 1 lakh.

(3.) Thereafter a notice under Section 148 of the Act was sent to the assessee for reopening of the assessment under Section 147(a) of the Act. In the reassessment under Section 143(3) read with Section 147(a) the total income assessed was Rs. 22,77,200. Thereafter, the assessee has challenged the reassessment order before the Commissioner of Income-tax (Appeals). Before the Commissioner of Income-tax (Appeals) it was submitted that all material information relevant to the construction of the house property was furnished before the Assessing Officer and the rent received by the assessee was also duly disclosed. It was also brought to the notice of the Commissioner of Income-tax (Appeals) that the construction of the house was not completed during the previous year relevant to the assessment year 1974-75 and it was completed only in the assessment year 1975-76.