AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 870
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.... decided the appellants' four appeals by assigning identical reasons, we propose to decide these appeals by passing a common order as the facts are interconnected and overlapping. 2. The facts giving rise to these appeals are that the assessees (husband and wife) filed their separate returns of income declaring business income, Long Term Capital Gains and agricultural income for the Assessment Year 2000-01. Subsequently, on the basis of proceedings initiated for the Assessment Year 2003-04, they received notices on 05.05.2006 under Section 148 of the Income Tax Act, 1961 (in short, 'the Act') alleging that they had purchased two-third share in SCO No. 60-61, Sector 17-D, Chandigarh for a consideration of Rs. 85 lacs as per the 'agreement t....
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....nce the realizable price of the property was very low. The assessees asserted that the sale consideration of Rs. 85 lacs was a fake entry made by JD Gupta in the 'agreement to sell' dated 14.10.1999 for his personal gains and without giving any sanctity to the said agreement, the parties in fact bound themselves down with a fresh agreement on 03.02.2000 depicting the agreed sale consideration of Rs.16 lacs. The appellant-assessees also explained that though they were in possession of the property and had been receiving its rental income since February, 2000 yet they had to approach the Civil Court and it was pursuant to the decree passed in their favour that a Local Commissioner was appointed who got the sale deed executed on 13.02.2002 for....
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....ellant-assessees is peripherial to the scope of Section 147 of the Act, especially the phrase "reason to believe" as according to them the assessment has been re-opened by the AO on mere suspicion without verifying the correctness of the information received by him nor did he record his satisfaction about correctness of the said information. According to them, the Revenue has failed to discharge its onus in proving that the consideration mentioned in the sale deed dated 20.09.2002 was less than what was actually agreed to or paid to the sellers and the only evidence relied upon against them is the statement of a third party, namely, JD Gupta who had an axe to grind against the assessees due to non-payment of the commission. Since the vendor....
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....ssessment. Such a recourse is available to the AO before the expiry of four years from the end of the relevant assessment year if for whatever reason he has reason to believe that the income has escaped assessment. The first proviso to Section 147 further confers jurisdiction on the AO to re-open the assessment if the income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under Section 142(1) or Section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Section 148(1) contemplates that before making the assessment, re-assessment or re-computation under Section 147, the ....
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....ble to Income Tax have escaped assessment; and (ii) that such escapement has occurred by reason of either omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. [Ref. S. Ganga Saran & Sons (P.) Ltd. v. ITO [1981] 3 SCC 143]. 12. There is, however, a sea-change after the amendment in Section 147 for determining jurisdictional scope for re-assessment of the escaped income. The Hon'ble Supreme Court in Rajesh Jhaveri Stock Brokers (P.) Ltd.'s case (supra) has explained and laid down that under the substituted Section 147 "existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income ....
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....ional hearing. 15. There can be no escape in the light of the above-referred interpretation of Section 147 that there existed sufficient reasons for the AO to believe that the undisclosed income in the hands of the appellant-assessees escaped assessment in the year 2000-01. The agreement to sell dated 14.11.1999 was admittedly signed by both of them. The Notary Public also supported the cause of Revenue regarding execution of the said agreement. JD Gupta was cross-examined by the assessees at length but he withstood the test of credibility. The agreement to sell dated 14.11.1999 referred to four demand drafts which were exactly the same as mentioned in the sale deed dated 13.09.2002. These very demand drafts appeared in the subsequent agre....