This appeal by assessee is against order of CIT(A), in his Appeal No. B-III-2/81-82, dt. 4th Dec., 1982, relating to asst. yr. 1976-77, upholding reopening of assessment under s. 147(b) and also confirming gross profit addition made by ITO to some extent. facts relating to reopening of assessment, rival submissions and our conclusion thereon are discussed hereunder. assessee is dealer in silver bullion and old silver ornaments, which he purchases from various sources and converts same into bullion for purposes of sale. In this case, assessment was originally completed under s. 143(1) accepting returned income of Rs. 53,540. assessment was reopened on t h e basis of audit objection, that, closing stock of bullion and silver ornaments was valued at uniform rate of Rs. 500 per k.g. irrespective of fluctuations in its cost and, therefore, there was escapement of income on account of under valuation of closing stock. reasons furnished in order sheet by entry dt. 23rd June, 1980 are as under: "Closing balances of bullion/silver ornaments appear to have been undervalued during asst. yrs. 1975-76, 1976-77 and 1977-78. In consequence of information in my possession, I have reason to believe that income chargeable to tax has escaped assessment for years 1975-76, 1976- 77 and 1977-78." assessee filed return in response to 148 notice, admitting i n c o m e as originally assessed. During course of assessment proceedings, assessee, while objecting to reopening of assessment under s. 147(b), applied to IAC Rang-II, Raipur under s. 144A for suitable instruction in this regard to ITO. IAC after examination of case records, came to conclusion, that, audit objection regarding under valuation of closing stock pertained to question of fact and, therefore, decision of Supreme Court in Indian & Eastern Newspaper Society vs. CIT (1979) 12 CTR (SC) 190: (1979) 119 ITR 996 (SC) namely, that audit party could not pronounce on law and such pronouncement would not amount to "information" under s. 147(b), was not applicable to facts of case and, therefore, ITO was justified in reopening assessment under s. 147(b) based on audit objection. However, after examining issue relating to under valuation of closing stock in through manner, with reference to purposes made during year as also earlier, he concluded, that valuation of Rs. 500 per k.g. adopted by ITO could not be termed as unreasonable. He, therefore, finally gave following direction to ITO on 144A application filed by assessee: "In regard to difference of 25 kg. in asst. yr. 1976-77 since book produced by assessee reveal that party having purchased that much quantity of silver at rate of Rs. 500 per kg. adopting Rs. 500 on entire stock remaining on valuation date relatable to asst. yr. 1976-77 is also not unreasonable. Thus for asst. yrs. 1975-76 to 1977-78, stock valuation adopted by assessee is reasonable and be not disturbed. For asst. yr. 1978- 79, same old stock continued in business, valuation be adopted on similar line." While completing reassessment, ITO in pursuance of directions of IAC under s. 144A, accepted closing stock valuation. However, in reopened proceedings, he disturbed trading results for following reasons: He noticed that percentage of impurity claimed on melting old ornaments was taken at arbitrary figures ranging from 70 per cent to 95 per cent n d accordingly yield of pure silver could not be verified. He, therefore, applied proviso to s. 145(1) as gross profit of 3.7 per cent shown by assessee compared unfavourably with gross profit of 8.5 per cent admitted by assessee for earlier year and, estimated sales at Rs. 13 lakhs as against Rs. 12,81,382 and determined gross profit thereon at 10 per cent. This resulted in addition of Rs. 82,124 to trading profits being difference between gross profit estimated and gross profit shown by assessee. ITO also made certain disallowances of expenses amounting to Rs. 1,000 and claim on account of professional tax. On appeal, CIT(A) upheld reopening of assessment under s. 141(b). He also agreed with IAC that, decision in (1979) 12 CTR (SC) 190: (1979) 119 ITR 996 (SC) would only preclude audit from pronouncing on law and preclution did not apply to mistakes of fact pointed out by audit party. As in this case, audit party had pronounced on under- valuation of closing stock, according to him, same constituted information within ambit of s. 147(b). Even though in final analysis, it was held, that, there was no under valuation of closing stock as opined by audit party CIT(A) held that, assessment, having once been reopened, it would reopen to ITO to bring to assessment, any other escaped income not covered by reasons which originally necessitated reopening. He also held, that, what has to be considered in this context was, whether ITO had some information at time when he reopened proceedings under s. 147(b). He held, that even though, that reason might not have held good subsequently, it did not constitute information for reopening proceedings under s. 147(b). [Para No. 5 is deleted as same is not related to main issue.] assessee being aggrieved with this order, is in appeal before us. submission of ld. Representative for assessee may be summarised as under. assessee has been following consistent method of valuing bullion stocks at Rs. 500 per k.g. over period of years and same had been accepted buy Department in previous years. There was no fresh information as result of audit objection and hence proceeding under s. 147(b) were not in order. Reference was made to Supreme Court s decision in (1979) 12 CTR (SC) 190: (1979) 119 ITR 997 (SC) and it was submitted, that audit party, according to this decision, was incompetent to pronounce on question of law and, since its pronouncement on method of valuation adopted by assessee constituted question of law, decision of Supreme Court would squarely apply to facts of case and, therefore, there was no information to enable ITO to reopen proceedings under s. 147(b). In any event, IAC in his instructions on 144A application dt. 30th March, 1981, held that, there was no under valuation of closing stock of bullion and directed ITO not to disturb valuation of closing stock. With reference to these instructions, it was contended that, since original reason for reopening assessment under s. 147(b) had disappeared as result of instructions of IAC, there was no further basis on which these proceedings could be continued so as to enable ITO to disturb trading results and make addition to gross profit and also disallow certain expenses claimed. Our attention was also invited to New Kaiser-Hind Spg. & Wvg. Co. Ltd. vs. CIT (1977) 107 ITR 760 (Bom) in which Bombay High Court had held, that, in validly initiated reassessment proceedings under s. 34(1)(a) in respect of certain items of escaped income, ITO could not add back while computing business income of assessee company under s. 10, certain amounts of interest which were allowed at time of original assessment and which would be governed by limitation laid down under s. 34(1)(b). [Para No. 7 is deleted as same is not related to main issue.] ld. Departmental Representative submitted, that (1979) 12 CTR (SC) 190: (1979) 119 ITR 997 (SC) was only authority for proposition, that audit could not pronounce on question of law, but method of valuation on which they have expressed opinion, being question of fact, audit objection would amount to information within ambit of s. 147(b) and same will not be hit by Supreme Court s decision. Even if original basis on which assessment had been reopened had vanished as result of IAC s order under s. 144A, it was submitted that once proceedings have been validly initiated jurisdiction of ITO would be enlarged to include other aspects of concealment and, therefore, ITO was justified in disturbing trading results and making addition to trading profits. Reliance was placed on Supreme Court s decision in V. Jaganmohan Rao & Ors. vs. CIT (1970) 75 ITR 373 (SC) in which their lordship of Supreme Court held, that, once valid proceedings are started under ss. 34(1)(b) and 147(b), ITO not only had jurisdiction, but it was his duty to levy tax on entire income that had escaped assessment during that year. Reference was also made to Calcutta High Court s decision in CIT vs. Assam Oil Co. Ltd. in (1982) 133 ITR 204 (Cal) wherein also, it was held, that, once assessment is reopened, notice is give for fresh return for all items following Supreme Courts decision. As regards merits, ld. Departmental Representative supported order of CIT(A). We have carefully considered facts and circumstances and legal position emerging from various decisions referred to above. As regards reopening of assessment under s. 147(b), we consider that, audit parties opinion on valuation of closing stock would not amount to pronouncement on law and, therefore, decision of Supreme Court in (1979) 12 CTR (SC) 190: (1979) 119 ITR 996 (SC) would not be applicable to facts of this case. We are, therefore, of opinion, that audit objection would constitute information in ambit of s. 147(b) so as to enable ITO to reopen proceedings. As regards objection, that, when original basis on which assessment was reopened has ceased to exists, proceedings could not be continued any further, we are of opinion that (1982) 133 ITR 204 (Cal) is authority for proposition that, once assessment proceedings were validly reopened under s. 147(b), subsequent change in reasons for such reopening would not invalidate proceedings void ab initio. In that case, proceedings under s. 147(b) were initiated on basis of decision of Rajasthan High Court. Subsequently Supreme Court reversed decision of Rajasthan High Court. Tribunal held that decision of Supreme Court did not render reassessments proceedings void. This view was upheld by Calcutta High Court in above mentioned ITR, as at time of reopening, ITO had valid information with reference to Rajasthan High Court s decision and subsequent decision of Supreme Court would not render proceedings void. In present case as well assumption of jurisdiction was on basis of information from audit party, that stocks had been under valued. Subsequently, under s. 144A proceedings, IAC directed, that valuation of stock should not be disturbed. Applying same ratio we are of opinion that there would be no lack of jurisdiction for continuing proceedings validly initiated under s. 147(b). As regards third point, that assessment reopened, should not be enlarged to consider issues other than those for which assessment was reopened (1970) 75 ITR 373 (SC) is authority for proposition that, once assessment is reopened, previous under assessment is set aside and whole assessment proceedings start fresh and ITO not only had jurisdiction but it was his duty to levy tax on entire income that had escaped jurisdiction but it was his duty to levy tax on entire income that had escaped assessment during that year. This decision has been followed by Calcutta High Court in (1982) 133 ITR 204 (Cal). We, therefore, respectfully following decision of Supreme Court, hold, that this objection has no valid basis. We accordingly uphold reopening of assessment proceedings for above mentioned reasons. [Para Nos. 12 and 13 are deleted as they are not related to main issue.] In result appeal filed by assessee is partly allowed. *** ASHOK BROTHERS v. INCOME TAX OFFICER