MAHAVEER FINANCIERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(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 ?

(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.

(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.