CENTRAL INDIA ELECTRIC, SUPPLY CO. VS COMMISSIONER OF INCOME-TAX
2001 P T D 2366
[247 I T R 54]
[Supreme Court of India]
Present: S. P. Bharucha, S. S. M. Quadri and N. Santosh Hegde, JJ
CENTRAL INDIA ELECTRIC SUPPLY CO.
Versus
COMMISSIONER OF INCOME‑TAX
C. A. No. 14561 of 1996, decided on 02/08/2000.
(a) Income‑tax‑‑‑
‑‑‑‑Income‑‑‑Balancing charge‑‑‑Time of accrual of income‑‑‑Dispute regarding part of amount awarded in accounting year relevant to assessment year 1970‑71‑‑-Balance of amount accrued and was assessable in assessment year 1970‑71‑‑‑Indian Income Tax Act, 1961, S.41(2).
(b) Income‑tax‑‑‑
‑‑‑‑Reassessment‑‑‑Failure to disclose material facts necessary for assessment‑‑‑Reassessment justified‑‑‑Indian Income Tax Act, 1961, S.147(a).
Held, (i) that it was clear from the facts that the dispute before the District Judge, the High Court and the Supreme Court, in regard to the umpire's award made a rule of the Court, was restricted to an amount of Rs.60,000 and to interest. Therefore, the balance of the amount awarded became due to the appellant when the award was made a rule of the Court within the previous year relevant to the assessment year 1970‑71. It was assessable under section 41(2) of the Income Tax Act, 1961, in the assessment year 1970‑71.
(ii) That the High Court was right in corning to the conclusion that the parameters of section 147(a) of the Act were satisfied for the purposes of re‑opening the assessment for the assessment year 1970‑71.
The judgment of the High Court is printed below.
The judgment of the Division Bench of the High Conti comprising Dharmadhikari and R. P. Awasthy, JJ. delivered by Dharmadhikari, J. ran as follows:
D. M. Dharmadhikari, J. (10‑7‑1993).‑‑‑The following questions of law have been referred to this Court, at the instance of the Department, for opinion, under section 256(1) of the Income Tax Act, 1961:
"(1) Whether, on the facts and in the circumstances of .the case, the Tribunal was justified in holding that no income aced to the assessee under section 41(2) of the Income‑tax Act in the assessment year 1970‑71?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Income‑tax Officer 'was not justified in reopening the assessment for the assessment year 1970‑71 under section 147(a) of the Income‑tax Act?"
The answer to the above questions depends upon the correct interpretation and due application of the provisions contained in section 41(2? and section 147(a) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). At the outset, it may be stated that the Department has confined its case for chargeability of the property of the assessee only with regard to the assets at Bilaspur and has not pressed its case for the properties and asset at Katni.
A supplementary statement of the case was called for by this Court in this very case by orders passed on November 16, 1988 (see (1991) 187 ITR 259 (MP)). The Tribunal; in accordance with the directions of this Court, has submitted a supplementary statement of the case showing the contents of the balance‑sheet submitted by the assessee alongwith its return. In the balance‑sheet for the financial year in question i.e., 1969‑70, the written down value of the assets of the assessee are shown as Rs.16,96.246.04 and tire compensation received due to acquisition of the assets by the Madhya Pradesh Electricity Board has been shown as Rs.5,85,000. Thus, the net value of the assets has been shown as Rs.11,11,246.04.
Before taking up for discussion and decision, the two questions one after the other serially, the relevant facts may first be stated. The assessee, the Central India Electric Supply Co. Ltd., Katni, was an undertaking of the State Government engaged in the business of generation and supply of electricity. The Madhya. Pradesh Electricity Board took over the entire undertaking under the provisions of the Indian Electricity Act, 1910 The assessee was entitled to payment of the market value of its undertaking taken over or purchased under that Act and such market value, in the event of difference or dispute about it was to be determined by arbitration, in accordance with section 7A of that Act of 1910. A proviso to subsection (4) of section 7A of the Act of 1910 also required payment of, 20 per cent. of the value determined of the undertaking to be paid as solatium for compulsory purchase. The relevant provision contained in section 7A and subsection (4) hereof is to some extent relevant 's reproduced hereunder:
"7A. Determination of purchase price.‑‑‑(1) Where an undertaking of a licensee, not being a local authority, is sold under subsection (1) of section 5, the purchase price of the undertaking shall be the market value of the undertaking at the time of purchase or where the undertaking has been delivered before the purchase under subsection (3) of that section, at the time of the delivery of the undertaking and if there is any difference or dispute regarding such purchase price, the same shall be determined by arbitration.
(4) Where an undertaking of a licensee is purchased under section 6, the purchase price shall be the value thereof as determined in accordance with the provisions of subsections (1) and (2):
Provided that there shall be added. to such value such percentage, if any, not exceeding twenty per centum of that value as may be specified in the licence on account of compulsory purchase."
During the course of hearing of this case, it was experienced by us as also by counsel appearing for the parties that some additional facts would be necessary for deciding the questions of law referred to us. We were inclined to call a further supplementary statement of the case and that would have entailed further delay in disposal of this case. Luckily, all the facts necessary for deciding the reference became available to us from the record of Miscellaneous (F) Appeal No. 1.81 of 1969, decided by this Court on, September 14, 1971. We have called for the record of the above disposal of appeal for the purpose of deciding this reference and learned counsel appearing for the parties have fairly agreed for the procedure that we have
As is apparent from" the record of the decided appeal of this Court, i.e., M. (F.) A. No. 181 of 1969 between the, Madhya Pradesh Electricity Board and the assessee, the price of the assets taken over, including 20 per cent. for compulsory purchase, as estimated by the assessee, was not accepted by the Board and a dispute arose which was sought to be referred to two arbitrators one each to be appointed by the parties to the dispute. Since the arbitrators, before entering into the reference could not agree upon the name of the umpire, the assessee approached the Civil Court under section 8(1)(c) of the Arbitration Act, for appointment of an umpire. In the proceedings before the Court, the parties agreed to the appointment of Shri B.P. Sinha, former Chief Justice of India, as the umpire. The umpire gave his award on October 7, 1968. The umpire had determined the market price of the assets of the assessee at Rs.12,00,000 as against Rs.7,78,000 offered by the Board. In addition to the above market price twenty per cent. solatium amounting to Rs.2,40,000 was granted. Apart from this amount the umpire awarded a sum of Rs.60,000 being a sum which was five per cent. towards planning and designing. The umpire also awarded 6 per cent, interest per annum from May 5, 1966, which was said to be the reasonable time by which the purchase price should have been determined, till the date of actual payment.
Since the umpire was appointed through the intervention of the Court, his award was filed in the Civil Court. The assessee claimed a decree in terms of the award under section 17 of the Arbitration Act. On the other hand, the Board filed an objection to the award under section 30 of the Arbitration Act. The award of the umpire was challenged by the Board mainly on the ground that Rs.60,000 could not have been awarded towards the claim for planning and designing and the umpire had no jurisdiction to award interest. The Civil Court; i.e., the District Judge, Jabalpur, passed an order on September 16, 1969, and overruled the objections to the award raised by the Board excepting with regard to the grant of 6 per cent. interest on equitable consideration from May 5, 1966, till actual payment. The District Judge instead granted interest only from the date of award till realisation of the amount. The award, in all other respects, particularly the market price. 20 per cent. solatium and 5 per cent. on account of planning and designing was upheld. The District Judge passed a decree in terms of the award, with its judgment, dated September 16, 1969. The Madhya Pradesh Electricity Board then came in appeal to the High Court M. (F.) A. No. 181 of 1969. The High Court in appeal also. maintained the award of the umpire and the decree passed thereon by the District Judge with the only modification that 6 per cent. interest on market price was held payable only from the date of the award till realisation of the awarded sum.
It has now come on record that the order of the High Court passed in M. (F.) A. No. 181 of 1969, is pending in appeal before the Supreme Court of India, at the instance of the Board.
The assessee for the accounting year in question, i.e., 1970‑71, submitted a return showing its income as nil, although along with the return it had enclosed a balance‑sheet showing therein the written down value of its assets acquired by the Board as also the compensation actually received by it from the Board. The details of that balance‑sheet have been stated in the supplementary statement of the case submitted by the Tribunal to this Court and the relevant portion of it has already been mentioned by us above.
According to the Inspecting Assistant Commissioner, since the award of the umpire, in relation to the Bilaspur assets of the assessee, has been confirmed by the District Judge by passing a decree in terms of the award in the accounting year 1969‑70, for the assessment year‑ in question, i.e., 1970‑71, the assessee had earned income under section 41(2) of the Income‑tax Act, but the assessee had failed to disclose the same in the original assessment and, therefore, proceedings under section 147(a) of the Act for reassessment were justified.
The Commissioner of Income‑tax (Appeals) did not accept the challenge to the reassessment proceedings by the assessee. The assessee, therefore, approached the Tribunal. The Tribunal by order passed on March 30, 1991, allowed the appeal of the assessee holding that no income under section 41(2) of the Income‑tax Act had accrued for the assessment year in question and there was no justification for initiating reassessment proceedings under section 147(a) of the Act. It is thereafter that at the instance of the Department, the two questions quoted above have been referred to us for opinion.
Shri Ravindra Shrivastava, learned counsel 'appearing for the Department, on the first question based on the provisions of section 41(2) of the Act contends that passing of the award by the umpire had made the amount of purchase price payable to the assessee, but it had become due for payment only when the decree in terms of the award was passed by the District Judge and the same having been passed in the relevant financial year, it was a case of income accruing to the assessee and could be brought to tax in the assessment year in question. Learned counsel argues that merely because the decree in terms of the award passed by the District Judge is the subject‑matter of further litigation in appeal before the Supreme Court, that can be no good ground for the Tribunal to hold that the money towards the purchase price of the assets was not payable and due to the assessee for the relevant assessment year in question. For this proposition concerning question No. 1 learned counsel for the Department placed reliance on the following decisions:
(i) Sia Kishori Kuer v. Bhairvi Nandan Sinha, AIR 1953 Patna 42; and
(ii) CIT v. Sheshappa Hegde (1984) 150 ITR 164 (Kar.).
Learned counsel for the Department made an attempt to distinguish the case of Malegaon Electricity Co. (P.) Ltd. v. CIT (1970) 78 ITR 466 .(SC) relied on by the Assessing Officer and Akola Electric Supply Co. (Pvt.) Ltd. v. CIT (1978) 113 ITR 265 (Bom.) and CIT v. United Provinces Electric Supply Co. Ltd. (1987). 166 ITR 565 (Cal.) relied on by the Tribunal. It is submitted that the decision in the case of CIT v. Rohtak Textile Mills Ltd. (1982) 138 ITR 195 (Delhi) does not deal with the point involved directly.
On question No. 1, relating to section 41(2) of the Act, Shri B.L. Nema, learned counsel appearing for the assessee, raised two contentions. Firstly, it is submitted that income had accrued to the assessee for the purpose of section 41(2) of the Act, on the passing of the award by the umpire and not on the date when the District Judge passed a decree in terms of the award. The second submission made in the alternative is that since the decree passed by the District Judge in terms of the award is sub judice in appeal before the Supreme Court, the money awarded had neither become payable nor due till the litigation is over, with regard to the market value of the assets. Learned counsel argued on behalf of the assessee that the expressions "money payable" and "due" should be construed in the context of the income‑tax law to mean "finally payable and due". Reliance, on behalf of the assessee, has been placed on the decisions in the following rulings:
(1) CIT v. United Provinces Electric Supply Co. Ltd. (1987) 166 ITR 565 (Cal.);
(2) Akola Electric Supply Co. (Pvt.) Ltd. v. CIT (1978) 113 ITR 265 (Bom.);
(3) P.C. Gulati, Voluntary Liquidator, Panipat Electric Supply Co. Ltd. v. CIT (1972) 86 ITR 501 (Delhi);
(4) CIT v. Sheshappa Hegde~1984) 150 ITR 164 (Kar.); and
(5) CIT v. Rohtak Textile Mills Ltd. (1982) 138 ITR 195 (Delhi),
Before expressing opinion on question No.l, it would be necessary to critically examine the provisions of section 41(2) of the Income Tax Act, 1961, as it existed on the relevant date which reads as under:
"41. (2) Where any building, machinery, plant or furniture which is owned by the assessee and which was or has been used for the purpose of business or profession is sold, discarded, demolished or destroyed and the moneys payable in respect of such building, machinery, plant or furniture, as the case may be, together with the amount of scrap value, if any, exceed the written down value, so much of the excess as does not exceed the difference between the actual cost and the written down value shall be chargeable to income‑tax as income of the business or profession of the previous year in which the moneys payable for the building, machinery, plant or furniture became due."
For the purpose of answering question No. 1 two expressions "payable" and "due" have to be properly construed in the context of taxation law. The moot question is whether the market price of the plant and machinery of the assessee taken over by the Board had become "payable" and "due" in the relevant financial year for being assessed in the relevant year.
Words and Phrases, Permanent Edition, Volume 13A, explains the word "due" in various ways in the context in which the expression has been used in different statutes. The meaning nearest for our purpose explained in the same volume is as under:
" 'Due' means having reached the date at which payment is required; payable.' It is also explained by saying that the word 'due' without qualification means owing and immediately payable. At another place in the same volume, the word is explained thus: The word 'due' has two meanings. The one indicates a debt ascertained and fixed, though payable in future and the other a debt where the money has become payable, so that a suit will lie on it presently. According to the consensus of judicial opinion, it has a double meaning: (1) that the debt or obligation to which applied has by contract or operation of law become immediately payable; and (2) a ‑simple indebtedness without reference to the time of payment in which it is synonymous with 'owing' and includes all debts whether payable in praesenti or de futuro". (See Words and Phrases, Permanent Edition, Volume.13A at page 109).
In Corpus Juris Secundum, Volume 28, the word "due" is explained as under:
"In general":
Derived from the Latin word 'debed' indirectly through the, French 'du' and said to be from the same root as 'duty'. It has many definitions or a variety of meanings, influenced largely by the connection in which it is used, and while it has been the subject of many decisions by the Courts, no general rule of interpretation can be safely stated there from. It may on the one hand, express the mere fact, or the state, of indebtment, as an equivalent simply of 'owing' or, on the other hand, it may refer to the time of payment, indicating that the obligation is immediately enforceable, and is then an equivalent of 'payable'. It has been said that there‑ is a practical, if not theoretical, unaninuty of judicial opinion in giving to the word this double meaning."
Apart from the cases cited at the Bar, the decision of the Supreme Court in the case of Kesoram Industries and Cotton Mills Ltd. v. CWT (1966) 59 ITR 767, appears to be a case nearer in point to the instant case. The provisions of section 2(m) of the Wealth Tax Act, defining the words "net wealth", for the purpose of section 7 of the Wealth Tax Act, came up for construction and consideration before the Supreme Court. Under section 2(m) of the Wealth Tax Act, the aggregate value for the purpose of the said Act, of the assets, is, to be determined by excluding all the debts owed by the assessee on the valuation date. The question that arose before the Supreme Court was whether the income‑tax leviable on the assets is liable to be excluded from the aggregate value as "debt owed by the assessee" on the valuation date. The Supreme Court decided the question in the light of the provisions of the Wealth Tax Act and the scheme and the provisions of the Income‑tax Act: The decision of the Supreme Court was that the income? tax leviable in the relevant year can be excluded as debt owed, may be that the income‑tax is quantified in the subsequent year by the Income‑tax Officer by assessment. The following observations of the Supreme Court in the case of Kesoram Industries (1966) 59 ITR 767 are pertinent for the purpose of this case (page 784):
"To summarize: A debt is a present obligation to pay an ascertainable sum of money, whether the amount is payable in pre asenti or in futuro: debitum in pre asenti, solvendum in futuro. But a sum payable upon a contingency does not become a debt until the said contingency has happened. A liability to pay income‑tax is a present liability though it becomes payable after it is quantified in accordance with ascertainable data. There is a perfected debt at any rate on the last day of the accounting year and not a contingent liability. The rate is always easily ascertainable. If the Finance Act is passed, it is the rate fixed by that Act; if the Finance Act has not yet been passed, it is the rate proposed in the Finance Bill pending before Parliament or the rate in force in the preceding year, whichever is more favourable to the assessee. All the ingredients of a 'debt' are present. It is a present liability of an ascertainable amount.
Looking from a practical standpoint also, there cannot possibly be any difficulty in ascertaining the liability. As the actual assessment will invariably be made subsequent to the close of the accounting year, the rate would certainly be available to the authorities concerned r the purpose of quantification. ".
Taking aid of the legal dictionaries and the decision) of the Supreme Court in the case of Kesoram Industries (1966) 59 ITR 767 we proceed to answer question No. 1 posed before us on the applicability of section 41(2) of the Act. The main point for consideration is whether the market price of plant and machinery of the assessee taken over by the Board under the Indian Electricity Act, had become payable and due in the financial year 1969‑70 relevant to the assessment year 1970‑71. In our considered opinion, in the two expressions "payable" and "due" there is difference only of degree and time. The money is payable immediately on the date of acquisition or sale under the Act, but it becomes due for payment at some future date, if there is a dispute about the price. In the event of dispute about' the price, quantification of the price is done only through the award of the arbitrator.
In the particular facts and circumstances of this case, on acquisition of the plant and the machinery of the assessee, its price under section 7A of the Electricity Act had become payable on the date of the acquisition and it was quantified when the umpire, resolved the dispute between the parties and made the award, but it became due only when the decree in terms of the award was passed by the Civil Court under section 17 of the Arbitration Act. The contention advanced by Shri B. L. Nema, on behalf of the assessee that the price had become due on its quantification after passing of the award by the umpire, cannot be accepted in view of the peculiar facts of this case. In this case, as has been explained by detailed narration of facts of the arbitration case in the Civil Court and the first appeal in this Court, the arbitration through an umpire took place through the intervention of the Court. An application under section 8 of the Arbitration Act was made to the Civil Court for appointment of an umpire because the arbitrators nominated by the parties had failed to agree on the name of an umpire. The Civil Court allowed that application and appointed Shri B.P. Sinha, former Chief Justice of India as the umpire in the case. The dispute was referred to him by the Court and the umpire after making the award submitted the same in the Court for passing a decree in terms thereof. After the award was filed in the Court, it was made rule of the Court, after deciding the objection under section 30 of the Arbitration Act, raised by the Board. When an award is passed and is filed in the Court, the award as such is not enforceable and the amount awarded therein does not become recoverable till the Civil Court puts its sea: on it and makes a rule by passing a decree in terms thereof. The award when filed in the Court is liable to be confirmed, remitted for reconsideration or set aside, under the provisions of the Act. Where the arbitration is not with the intervention of the Court, it may be contended that passing of the award itself makes the amount awarded due. The facts of this case, therefore, distinguish the case of Sheshappa Hegde (1984) 150 ITR 164 (Kar.). on which strong reliance has been placed by the assessee. In the instant case, the umpire, by his award resolved the dispute of difference of price and quantified the price, but it did not become due for payment soon after the passing of the award. The award filed in the Court and the price became due for payment only when the decree in terms of the award came to be passed.
The fact that the judgment and the decree of the Civil Court passed line award was pending consideration in appeal before the High Court is also not a good ground to contend that the price was not due till the litigation with regard to the award was over. We have no doubt that in law the money payable under a decree becomes due for payment on the date of passing of the decree and nonetheless it is so even if the decree is appealed against and there is likelihood of the decree being set aside, modified or confirmed in appeal. The price, therefore, due for payment to the assessee on the date of the passing of the decree was taxable in the relevant succeeding assessment year to the financial year, in which the decree was passed, even though the amount under the decree may not have been actually paid or received by the assessee. In the scheme of the Income‑tax Act, the taxable event is on "accrual of income" and not on actual receipt thereof. Pendency of litigation in respect of an amount or price due has no relevancy so far as the taxability of such accrued income is concerned. The likelihood of the income being reduced in the subsequent assessment year as a result of the litigation may give rise to resort to other remedies available in the Act for rectification and refund of the tax, but on that ground it cannot be held that no income had accrued to the assessee for the relevant assessment year. We find great support for our decision from the decision of the Supreme Court in the case of Kesoram Industries (1966) 59 ITR 767. As for the wealth tax so also the income‑tax. The liability to pay income‑tax arises in the relevant financial year on accrual of income in that year and if the income is ascertainable and quantified, it can be brought to tax in the relevant assessment year. The Income‑tax Act permits tax to be imposed on the present income in a given financial year, although assessed in the subsequent assessment year.
Our answer to question No.1, therefore, is that in the facts and circumstances of this case, the Tribunal was not justified in holding that no income accrued to the assessee under section 41(2) of the Income‑tax Act in the assessment year 1970‑71. Question No.l is, therefore, answered in the negative, in favour of the Department.
Now we take up for consideration the second question regarding justification for initiating reassessment proceedings under section 147(a) of the Act.
The contention of learned counsel for the assessee is that all primary facts necessary for assessment were disclosed "fully and truly" to the Assessing Officer by furnishing with the return a copy of their balance‑sheet and taxability in that year of the deemed income under section 41(2) was a subject‑matter of legal inference to be drawn by the Assessing Officer. Learned counsel after tracing out the form of return prescribed in the relevant year pointed out that the filing of the balance‑sheet alongwith the return was the legal requirement and, hence, he argued that it should be treated as part of it and, m any case, according to him, the contents of the balance‑sheet furnished all the relevant information to the Assessing Officer to bring to tax the deemed income of the assessee under section 41(2) of the Act. Learned counsel or the assessee, therefore, challenges the reassessment proceedings as not warranted by the provisions of section 147(a) of the Act. Reliance is placed for the assessee on the following decisions:
(i) CIT v. Wilk Wilhelmsen Lines Ltd. (1980) 126 ITR 318 (Cal.);
(ii) Modi Spinning and Weaving Mills Co. Ltd. v. ITO (1970) 75 ITR 367 (SC);
(iii) CIT v. Bhanji Lavji (1971) 79 ITR 582 (SC); ,
(iv) ITO v. Madnani Engineering Works Ltd. (1979) 118 ITR 1 (SC);
(v) ITO v. Lakmani Mewal Das (1976) 103 ITR 437 (SC);
(vi) Ganesh Chandra Khan v. ITO (1978) 111 ITR 934 (Cal.); and
(vii) Star Automobiles v. ITO (1989) 178 ITR 613 (MP).
Learned counsel for the assessee made an alternative submission that the letters addressed by the assessee seeking advice of the taxing authority on the taxability of the deemed income under section 41(2) should be deemed to be disclosure of all material facts which were sufficient enough to invite the attention of the Assessing Officer to the legal question of taxability under section 41(2) of the Act.
Learned counsel appearing on the other side for the Department supported the action under section 147(a) of the Act, and argued that accepting that the balance‑sheet filed in the relevant year can be looked at as a part of the return, there was no full and complete disclosure of all material facts. It is contended that the date of passing of the decree, the decretal amount of the award and all other relevant facts for determining the taxability under section 41(2) of the Act, nowhere find place in any part of the return or in the balance‑sheet. Reliance on behalf of the Department is placed on the following decisions:
(i) Malegaon Electricity Co. (P.) Ltd. v. CIT 1970) 78.ITR 466 (SC),:
(ii) Kantamani Venkata Narayana & Sons v. First Addl. ITO (1967) 63 ITR 638 (SC);
(iii) Calcutta Discount Co. Ltd. v. ITO (1961) 41 ITR 191 (SC);
(iv) ITO v. Sudhir Kumar Bhose (1972) 84 ITR 60 (Cal.);
(v) Indo‑Aden Salt Mfg. and Trading Co. (P.) Ltd. v. CIT (1986) 159 ITR 624 (SC); and
(vi) S.D. Sachdeva v. CIT (1972) 86 ITR 447 (P & H).
So far as the abovementioned letter sent by the assessee to the Departmental authorities is concerned, learned counsel for the Department submits that they did not form part of the return and disclosure of some facts otherwise than in the return cannot' take away the jurisdiction of the concerned authority to reopen the assessment because in the return the assessee showed the income as nil and the balance‑sheet also did not contain full and true disclosure of material facts.
Having considered the submissions made by the Department, learned counsel for the parties and the rulings cited at the Bar; we are of the opinion that question No.2 also deserves to be answered in the negative and in favour of the Department.
Having answered the first question in favour of the Department that deemed income under section 41(2) of the Act was liable to be taxed in the 'assessment year in question, there is no escape from holding that income was liable to be shown in the return. Even if the balance‑sheet and the letters of the assessee seeking advice of the Department are taken to be disclosure of relevant facts, that did not amount to full and true disclosure of all material facts to save the assessee from the ill effects of section 147(a) of the Act. The Assessing Officer was never informed of the fact of passing of the decree by the Court in terms of the award of the umpire or the amount in the decree and the amount receivable from the Board. Without all the above relevant facts, it was not possible for the Assessing Officer to determine the taxability and the quantum of tax under section 41(2) of the Act. As has been pointed out by us at the outset, the balance‑sheet merely showed the written down value of the assets of the assessee and the actual compensation offered by the Board and received by the assessee in the relevant financial year. In the return, the income showed was nil. The Inspecting Assistant Commissioner was, therefore, fully justified in inferring failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that year and to resort to the provisions of section 147(a) for the escaped assessment.
Consequently, both the questions are thus answered, in the negative, in favour of the Department and so against the assessee.
P. N. Monga, Manu Monga, Rakesh K. Sharma and Navneet Negi, Advocates for Appellant.
K. N. Shukla, Senior Advocate (Rajiv Nanda, Advocate for Ms. Sushma Suri, Advocate with him) for Respondent.
JUDGMENT
We have heard learned counsel for the appellant, read the judgment of the High Court under appeal and the judgment of the Tribunal, which the High Court reversed We are of the view, having regard to the facts and. circumstances of the case, that the High Court was right in answering the following two questions in the negative and in favour of the Revenue.
"(1)????? Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that no income accrued to the assessee under section 41(2) of the Income‑tax Act in the assessment year 1970‑71?
(2)??????? Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the Income‑tax Officer was not justified in reopening the assessment for the assessment year 1970‑71 under section 147(a) of the Income‑tax Act'?"
The High Court was right in coming to conclusion that the para?meters of section 147(a) of the Income‑tax were satisfied for e purposes of reopening the assessment for the assessment year 1970‑71.
It was also justified in coming to the conclusion that income had accrued to the assessee under section 41(2) of the Act in the assessment year 1970‑71. It is clear from the facts that the dispute before the District Judge, the High Court and this Court in regard to the umpire's award, made a rule of the Court, was restricted to an amount of Rs.60,000 and to interest. Therefore, the balance of the amount awarded became due to the appellant when the award was made a Nile of the Court within the previous year relevant to the assessment year 1970‑71.
The appeal is dismissed with costs.
M.B.A/969/FC??????????????????????????????????????????????????????????????????????????????????? Appeal dismissed.