This appeal has been filed by assessee against order dated 30-11- 2004 of ld. CIT(A). assessee had taken as many as 15 grounds of appeal at time of filing appeal. Revised grounds were latter filed as per rule 8. As per revised grounds of appeal, six grounds have been taken. 2. facts of case have been duly discussed by lower authorities and, in brief, they are as under:- assessee filed return of income on 2-9-1997 declaring loss of Rs. 1,81,783. This return was late by 13 months of due date. return of income was processed under section 143(1)(a) of Income-tax Act, 1961. However, subsequently, notice under section 148 of Act was issued on 13- 11-2000 and assessment was made under section 143(3), read with section 147 of Act as per order dated 28-3-2002 determining capital gains at Rs. 72,28,175 in respect of transfer of theatre building by demolishing same and constructing commercial structure on that through one M/s. Sapna Real Estates. Earlier one Cinema Hall in name of 'Cine El Dorado' was in existence and belonged to Mavany family. dispute arose between late Shri Leelali Mavany and late Shri Tajdin Mavany which was resolved by family settlement reached on 8-8-1995. As per family settlement, 70 per cent of share of building of Cinema Theatre was allocated to Altaf Leelali Mavany, legal heir of late Shri Leelai Mavany and 30 per cent of shares were allocated to six legal heirs of late Shri Tajdin Mavany. These seven persons entered into partnership agreement on 8-8-1995 determining share ratio in proportion to their respective rights in theatre property. On very same day, contract for restructuring, reconstruction, remodelling and development of premises was also executed between assessee-firm and M/s. Sapna Real Estates (hereinafter called 'Developer'), according to which, Developer was to pay Rs. 66 lakhs to assessee and 35 per cent of developed property in lieu of 65 per cent of developed property to be retained by it. amount of Rs. 66 lakhs was taken by 6 partners who are legal heirs of late Shri Tajdin Mavany in their profit sharing ratios for retirement from partnership. partnership was reconstituted and property was developed as per terms of contract between assessee-firm and Developer. Power of Attorney was also executed in favour of Developer to enable him to carry out necessary activities for development of property. Assessing Officer was of view that 65 per cent of land area was transferred to Developer in lieu of 35 per cent of developed area and Rs. 66 lakhs paid by builder and developers. fact that amount of Rs. 66 lakhs was taken by outgoing partners, six partners being legal heirs of late Shri Tajdin Mavany, was considered internal arrangement of firm and application of fund received by it from Developer as part of transfer consideration. Assessing Officer also obtained details from Developer regarding cost of construction of project which was stated by them to be Rs. 1,45,00,000. Since assessee had received 35 per cent of total constructed area, proportionate amount of Rs. 50,75,000 in addition to Rs. 66,00,000 was considered total consideration for transfer of 65 per cent of land area of aforestated building to Developer. transfer consideration was, therefore, taken at Rs. 1,16,75,000 as against which cost as per inflated index for 65 per cent of land transferred to Developer was taken at Rs. 44,46,825 and Assessing Officer determined capital gains of Rs. 72,46,825 in case of assessee for assessment year 1996-97 relevant to financial year 1995-96 considering 8-8-1995 as date of transfer as per agreement between assessee and Developer for development of site and constructions of commercial complex. claim of assessee that Rs. 66 lakhs paid to legal heirs of Late Shri Tajdin Mavany in their profit sharing ratios for acquiring their rights in property in question should be considered as cost of property while determining capital gains, was rejected by Assessing Officer. Assessing Officer also held that as per provisions of section 2(47) of Income-tax Act, transfer took place on 8-8-1995 i.e., date of contract between assessee and builders-cum-developers, namely, M/s. Sapna Real Estates. claim of assessee that transaction had resulted into capital loss of Rs. 13,78,795 was also rejected. 3. On appeal, ld. CIT(A) confirmed action of Assessing Officer and upheld reopening of assessment under section 147 of Act. 4. During course of hearing before us, ld. Counsel for assessee 4. During course of hearing before us, ld. Counsel for assessee reiterated submissions taken before lower authorities which are summarized below:- (i) sum of Rs. 66 lakhs paid by Developer to persons other than assessee was consideration for their interest in property agreed to be surrendered by them in favour of Developer directly. (ii)The Assessing Officer estimated cost of construction on enquiry which were extraneous to facts before him and no adequate opportunity was given to assessee on this point. (iii)The theatre along with land was not transferred within meaning of section 2(47) of Income-tax Act because no consideration or lawful possession was given to assessee but they were allowed only access to property for its development etc. (iv)The irrevocable power of attorney was executed which did not permit transfer of property and, therefore, transfer did not take place. (v)The amount of Rs. 66 lakhs directly paid by Developer to legal heirs of late Shri Tajdin Mavany in lieu of their rights in theatre building was in accordance with family settlement. (vi)There could not be tax implication or transfer in view of family settlement discussed above. (vii)The Builder and Developer had vested interest in over- stating high cost of construction because it reduced its tax liability, and (viii)The payment of Rs. 66 lakhs to legal heirs of late Shri Tajdin Mavany in lieu of their shares should have been considered as cost of capital asset while working out capital gains. 5. assessee also objected to reopening of assessment on ground that there was no compliance of statutory requirement insofar as confidential report of DDIT for forming belief for reopening of assessment was not made available to assessee and original return of income was not available on record of Assessing Officer at time of reopening of assessment. Therefore, he did not consider all relevant materials on his record before reopening assessment. 6. As per first ground of appeal, assessee has objected to decision of ld. CIT(A) in upholding proceedings under section 148 of Act. ld. Counsel for assessee, on this issue, reiterated submissions as discussed above and taken before ld. CIT(A). ld. CIT(A) had upheld action under section 148 for reasons discussed in detail in para 3 at pages 8 to 13 of impugned order which are summarized as under: (a)The two basic conditions for applying provisions of sections 147 and 148 of Act, i.e., existence of reason to believe and recording reason before issuing notice under section 148, were satisfied. (b)A perusal of reasons recorded before issue of notice under section 148 of Act reveals that there was due application of mind on part of Assessing Officer and reasons were duly communicated to assessee. (c)Non-availability of original return on date of inspection by assessee of record of Assessing Officer i.e., on 8-9-2004 did not necessarily mean that relevant original return was not available on 13-11- 2000, i.e., date of issue of notice under section 148 of Act. (d)The Assessing Officer had recorded detailed reasons that capital gain on transfer of property had not been declared by assessee as per contract dated 8-8-1995 and that transfer had taken place in assessment year 1996-97 and income had escaped assessment for that assessment year. (e)It was clear from impugned order of assessment under section 143(3), read with section 147 that original return had been processed under section 143(1) of Act and subsequent furnishing of copies of profit and loss account and balance sheet by assessee while removing defect in return filed on 30-11-2000 in response to notice under section 148, could not give rise to reasonable inference that original return was not available with Assessing Officer at time of reopening of assessment under section 147 issuing notice under section 148 of Act. (f)The confidential report of DDIT which formed basis of reasons recorded on 30-11-2000 before issuing notice under section 148, was not required to be supplied to assessee and reasons recorded had been duly supplied to assessee. (g)The assessee was, therefore, not correct in challenging jurisdiction of Assessing Officer in reopening assessment under section 147 of Act as per aforestated notice issued under section 148 of Act. (h)It was not necessary for Assessing Officer to disclose source of information and that adequacy of sufficiency of reasons cannot be grounds for challenging validity of notice under section 148 of Act because material or information on basis of Assessing Officer issued notice under section 148 were duly communicated to assessee by giving copy of reasons recorded by him. (i) ld. CIT(A) relied on decisions in following cases:- (i) K.M. Bansal v. CIT [1992] 195 ITR 247 (All.) (ii) Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456 (SC) (iii) Midland Fruit & Vegetable Products (India) Ltd. v. CIT [1994] 208 ITR 266 (Delhi) (iv) Ranchi Club Ltd. v. CIT [1995] 214 ITR 643 (Patna) (v) A. Pusalal v. CIT [1988] 169 ITR 215 (AP) (vi) Radhaka nt Jagannath Prasad v. V.K. Johri [1960] 39 ITR 182 (Bom.) (vii) Brij Mohan Agarwal v. Asstt. CIT [2004] 140 TAXMAN 317 (All.) (viii) Pal Jain v. ITO [2004] 267 ITR 540 (Punj. & Har.). In view of foregoing discussions and case laws relied upon by ld. CIT(A), he held that action of Assessing Officer under section 147/148 was valid. He dismissed appeal of assessee on this point. 7. ld. Departmental Representative relied on orders of lower authorities. 8. We have carefully considered issue in view of material placed on record, rival submissions and case laws relied upon by ld. CIT(A). In our considered opinion, reasons recorded before issuing notice under section 147 were duly supplied and Assessing Officer had sufficient material to arrive at belief that income had escaped assessment. objections of assessee have no merits and validity of assessment is upheld. first ground of appeal is rejected. 9. ground Nos. 2 to 6 are interconnected. As per these grounds assessee has challenged determination of capital gains as against capital loss declared by it. submissions of ld. Counsel of assessee are same as taken before lower authorities. ld. Departmental Representative supported orders of lower authorities. 10. In our considered opinion (1) theatre property was transferred to Developer as per agreement dated 8-8-1995 in view of provisions of section 2(47) of Act because Developer was given right to demolish existing structure of Cinema Hall and carry out development and construction work for new commercial complex. (2) property was transferred by assessee-firm constituted on 8-8- 1995 for consideration of Rs. 66 lakhs as initial payment and 35 per cent of newly constructed premises. (3) payment of Rs. 66 lakhs to outgoing partners being legal heirs of late Shri Tajdin Mavany, was only application of funds receivable by assessee as part of contract to transfer property and direct payment of amount by assessee to these partners was on behalf of assessee because amount was duly entered into books of account of assessee. (4) capital gain was, therefore, liable to be assessed in hands of (4) capital gain was, therefore, liable to be assessed in hands of assessee as on 8-8-1995 i.e., date of transfer which is relevant to previous year 1995-96 and assessment year 1996-97. (5) payment of Rs. 66 lakhs to outgoing partners cannot be considered as cost of property because amount was paid to them at time of their retirement in lieu of their shares of profit and claim of assessee that it was part of family arrangement was of no relevance because valid partnership was constituted on 8-8-1995 and said property was shown as its asset and outgoing partners were paid amount of Rs. 66 lakhs on their retirement from firm. (6) Even if it is clear from legally constituted firm on 8-8-1995, contract entered between Developer and firm on 8-8-1995 itself and immediate retirement of partners belonging to late Shri Tajdin Mavany Group and reconstitution of firm, that family members had entered into arrangement but assessee cannot be allowed to take advantage of its own arrangement and defeat purpose of law by claiming otherwise having faced with tax liabilities. (7) cost of construction was rightly worked out by Assessing Officer and correctly confirmed by ld. CIT(A) for reasons discussed in their respective orders. (8) submission of assessee that Rs. 66 lakhs should be allowed as cost of construction cannot be accepted because had firm not been owner of property and transfer could have been without constitution of firm as per agreement dated 8-8-1995, respective owners would have required to bear capital gain on share of their transfer consideration. (9) assessee itself has admitted that firm came into existence on 8- 8-1995 by deed of partnership whereby cinema theatre became its asset and it was also admitted that Rs. 66 lakhs were paid to outgoing partners on their retirement. assessee cannot, therefore, be allowed to now claim that payment of Rs. 66 lakhs was for purchase of 30 per cent shares of heirs of late Shri Tajdin Mavany. (10) cost of construction was certified at Rs. 1,55,00,000 by Developer and even if claim of assessee that no proper opportunity was given in this regard by Assessing Officer is considered correct, adequate opportunity were allowed by ld. CIT(A) in exercise of his co-terminus powers and assessee could not successfully challenge cost of construction. cost of construction as certified by Developer cannot be rejected merely on basis of self-serving statement that Developer had inflated cost in order to reduce its tax liability, because assessee has failed to give any evidence in support of its submission and successfully challenge cost so certified. (11) cost of acquisition taken by lower authorities has also not been successfully challenged. 11. In view of foregoing discussions and reasons given by lower authorities in their orders, we see no reason to interfere with decision of ld. CIT(A). revised ground Nos. 2 to 6 of appeal of assessee are accordingly rejected. 12. As result, appeal of assessee is dismissed. *** MAVANY BROTHERS v. DEPUTY COMMISSIONER OF INCOME TAX