High Court Of Allahabad
Jai Prakash Guar vs. CIT
Sections 256(2), 147(b)
S.K. Dhaon & D.S. Sinha, JJ.
IT Ref. Appln. No. 124 of 1985
2nd January, 1989
Counsel Appeared
L. Gulati, for the Assessee
BY THE COURT :
In proceedings under s. 256(1) of the IT Act, 1961, the applicant called upon the Tribunal to state two questions of law for being considered by this Court. One of the questions which the Tribunal was required to refer was whether the ITO was justified in reopening the relevant assessment under s. 147(b) of the Act. The Tribunal felt that this question need not be referred.
2. The controversy with regard to the question sought to be referred to this Court centres round the computation of capital gains with regard to jewellery. It appears that the assessee made an application to the ITO that the jewellery was acquired during the period 1963 to 1975 and the capital assessed has to be computed as if the same came into existence on April 1, 1973, on the basis of the decision of the Supreme Court. It also appears that an audit report was received and thereafter the ITO passed an order reopening the assessment under s. 147(b). The Tribunal has taken the view that the ITO was in error in taking a notional value of the jewellery. According to it, the ITO failed to take notice of the provisions of ss. 48 and 52(2) of the Act while computing capital gains in so far as jewellery was concerned.
3. Learned counsel for the parties have been heard at length. Incidentally, both the counsel rely upon the decision in the case of Indian and Eastern Newspaper Society vs. CIT (1979) 12 CTR (SC) 190 : (1979) 119 ITR 996 (SC).
4. Having heard learned counsel for the parties, we are of the opinion that a question of law does arise for consideration by this Court. We, accordingly, direct the Tribunal to draw a statement of the case and to refer the following question :
“Whether, on the facts and in the circumstances of the case, the ITO was justified in initiating proceedings under s. 147(b) of the Act in so far as computation of capital gains in relation to jewellery was concerned ? “
5. In the circumstances of the case, we direct the parties to bear their own costs.
[Citation : 176 ITR 115]
