1989 (10) TMI 85 - AT - Income Tax

Tribunal Upheld Reassessment & Undisclosed Income Inclusion | Voluntary Disclosure Certificate Valid

The Tribunal upheld the reassessment under section 147(b), the inclusion of Rs. 72,049 as undisclosed income under section 69A, and the validity of the ... Assessment Order, Assessment Year, Income Tax Return, Total Income, Unexplained Money, Voluntary Disclosure Of Income And Wealth Ordinance, Voluntary Disclosure Scheme, Wealth Tax Return Issues Involved:1. Validity of the reassessment under section 147(a).2. Inclusion of the value of jewellery amounting to Rs. 72,049 as undisclosed income under section 69A.3. Discrepancies in the Voluntary Disclosure Certificate under section 8(2).Detailed Analysis:1. Validity of the Reassessment under Section 147(a):The assessee contended that the reassessment under section 147(a) was void ab initio and without jurisdiction, arguing that all relevant facts and particulars were disclosed during the original assessment. The AAC upheld the reassessment's validity, noting that the ITO had no occasion to consider the jewellery valued at Rs. 1,03,557 during the original income-tax assessment. The jewellery was disclosed for the first time in the wealth-tax return, which led to the initiation of proceedings under section 147(a). The Tribunal upheld the reopening of the assessment under section 147(b), citing the case of United Mercantile Co. Ltd. v. CIT and Mriganka Mohan Sur v. CIT, which allowed treating the notice under section 147(a) as one under section 147(b) if the conditions for the latter were met.2. Inclusion of the Value of Jewellery Amounting to Rs. 72,049 as Undisclosed Income under Section 69A:The ITO included Rs. 72,049 as the assessee's income from undisclosed sources under section 69A, as the assessee could not produce evidence supporting the acquisition of the jewellery. The AAC confirmed this inclusion, stating that there was no evidence as to the acquisition of the jewellery valued at Rs. 72,049. The Tribunal also upheld this decision, agreeing with the ITO's action and finding no error in invoking section 69A.3. Discrepancies in the Voluntary Disclosure Certificate under Section 8(2):The assessee argued that there was a mistake in the certificate under section 8(2), which only mentioned 'silver utensils' and not the gold and diamond jewellery included in the disclosure petition. The CIT declined to amend the certificate, and the AAC rejected the assessee's contention, stating that the certificate did not include the value of gold and diamonds. The Tribunal noted that the assessee's petition for rectification was filed three years after the certificate was issued, suggesting it was an afterthought. The Tribunal found that the ITO correctly identified the discrepancy during the wealth-tax assessment and initiated proceedings under section 147 based on this information.Conclusion:The Tribunal upheld the AAC's order, confirming the reassessment under section 147(b), the inclusion of Rs. 72,049 as undisclosed income under section 69A, and the validity of the Voluntary Disclosure Certificate under section 8(2). The appeal filed by the assessee was dismissed.