1985 (1) TMI 27

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....h was completed by the assessment order dated June, 17, 1982. A few facts need be noticed in order to appreciate the circumstances which resulted in the impugned notice for reassessment. The petitioner purchased a building in Rajkot on April 2, 1962, for .I sum of Rs. 37,000. It appears that in the financial year 1967-68, the petitioner made substantial alterations and additions to the said building at cost of Rs. 55,700. The building was sold thereafter by him on September 24, 1980, for an aggregate amount of Rs. 1,64,000. In the course of the assessment proceedings for the assessment year 1981-82, the petitioner filed a statement of income showing long-term capital gain of Rs. 49,730 as per the computation contained in the said stateme....

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....the reopening of the said assessment was on the basis of an audit note which had opined that the cost of additional construction arrived at by the petitioner was on the higher side and, therefore, the assessment should be reopened. It is in these circumstances that the notice for reassessment has been sought to be impugned. Broadly stated, two grounds are urged in support of the challenge. Firstly, the audit could not have constituted an information so as to justify the notice for reassessment. Secondly, in any case, having regard to the fact that all details having been disclosed at the time of original assessment as clearly evident from the order of assessment dated June 17, 1982, the impugned notice is merely a change of opinion, and,....

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.... the assessee was also filed before the ITO to show as to how the expenses for the additions and alterations in the sum of Rs. 55,700 were entailed. In the assessment order for the assessment year 1981-82, the ITO has recorded, inter alia, that the advocate for the assessee attended from time to time and filed details regarding the building, construction, etc., and had also produced the map of the building and an affidavit from the assessee regarding the expenses incurred for the construction of the building and the necessary details as well as a copy of the sale deed were filed before him. The pertinent observation of the ITO in the assessment order is that, " the payment for the construction has been verified from the bank's pass-book " a....