Allowing the petition the Court held that  the assessee had not claimed the sale consideration of the agricultural land as capital gains, but had at all times asserted the land in question to be falling beyond the municipal limits and, therefore, beyond the provisions of section 2(14)(iii), though the Department had contended that there was no evidence produced in support of any agricultural activity. The assessee’s contention had been supported by the report of the Income-tax Officer (Intelligence). The Assessing Officer does not refer either to the report of the Income-tax Officer (Intelligence) nor to the submissions of the assessee. It was a colourable exercise of power. When an authority was empowered to exercise and pass orders in terms of the Act, it had to remain within the four corners of the manner in which the power was required to be exercised. Once the basis for reopening the assessment was under section 147 for non-disclosure of income under capital gains and non-disclosure of sources of investment, the Assessing Officer had no authority in law to pass order holding that income had escaped assessment, on account of “adventure in the nature of business”. The notice and order  were quashed. (AY. 2013-14)