Reassessment based on unsubstantiated works contract allegations fails where a composite civil contract cannot be artificially split.

Reassessment could not be sustained where the revision notice issued after four years disclosed no material to show transfer of insulation material in execution of the works contract. The assessing officer rejected the dealer's objection mechanically and proceeded on surmises without supporting evidence, while the contract was for construction of a petrol bunk as a composite civil works contract. Artificial splitting of the contract to deny treatment as a civil works contract was impermissible, and the civil works classification under section 7C was upheld in favour of the assessee.

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Issues: Whether the reassessment could be sustained on the basis of an allegation that the works contract involved transfer of insulation material, and whether the contract was wrongly split to deny treatment as a civil works contract under section 7C.

Analysis: The assessment had been completed earlier on the basis of the records, and the revision notice issued after four years did not disclose any material to show that insulation material was involved in the execution of the contract. The dealer's explanation that the contract was only for construction of a petrol bunk was not met with any evidence, and the reassessment order was passed by rejecting the objection in a mechanical manner. The appellate authority and the Tribunal found that the assessing officer acted on surmises, without supporting material, and that the contract could not be artificially split when the work awarded was a composite civil contract.

Conclusion: The reassessment was not sustainable, and the finding that the contract fell within the civil works category was upheld in favour of the assessee.

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