1982 (8) TMI 126

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....property income at Rs. 2,000 was assessed at that stage. In the earlier year, the assessee also carried on money lending business but income from the said business was shown as nil for the year under appeal. The assessee filed an affidavit at the stage of the original assessment having deposed that no interest income had been received during the years under appeal. Having accepted such affidavit, no income from money lending business was assessed by the ITO for the year under appeal. Later on, he issued notice under s. 148 for the years under appeal and reopened the assessments under s. 147(a) r/w s. 148. Copy of the reasons recorded by the ITO has been filed before us by the ld. DR but from the orders of the authorities below it appears th....

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....dge of the ITO but he having been satisfied with the affidavit of the assessee did not make any further investigation and he did not choose to assess income from money lending business even on estimate basis as was done in the past years. Still there is no evidence with the Revenue that the assessee had received interest income during the years under appeal and, therefore, it cannot be said that the ITO had reason to believe that there was escapement of income on account of omission or failure of the assessee in disclosing the material facts fully and truly. To take action under s. 147(a), two conditions have to be established cumulatively and they are : (1) that the ITO had reason to believe that the assessee omitted or failed to disclose ....