2012 (9) TMI 1176 - AT - Income Tax

Summary

Issues involved: Appeal by Revenue and Cross Objection by Assessee regarding addition of unexplained investment on construction/ renovation of 1st floor of House u/s 69C of the Income Tax Act, 1961.

Summary:

1. Assessee's Cross Objection:
The assessee withdrew the cross objection filed, which was permitted by the tribunal, leading to the dismissal of the cross objection.

2. Revenue's Appeal Grounds:
The Revenue appealed against the deletion of the addition of Rs. 15,12,750 made by the Assessing Officer. The grounds included the loan from LIC Housing Finance for construction, valuation report confirmation, and the onus on the assessee to verify facts.

3. Facts of the Case:
The assessee declared income and purchased land, with a loan from LIC Housing Finance. The AO noted loan utilization for construction and renovation, leading to the addition u/s 69C. The assessee's explanation was deemed insufficient.

4. Ld. Commissioner of Income Tax (A) Decision:
The Commissioner considered various factors, including lack of cross-examination, disbelieved evidence, and reports indicating construction completion in earlier years. The addition was deleted based on these discrepancies.

5. Tribunal's Decision:
The tribunal upheld the Commissioner's decision, noting the lack of conclusive proof of construction in the current year, reliance on doubtful statements, and absence of evidence from the Assessing Officer. The Revenue's appeal and assessee's cross objection were dismissed.

In conclusion, the tribunal affirmed the decision of the Ld. Commissioner of Income Tax (A) regarding the addition of unexplained investment on construction/renovation of the house property, highlighting the importance of conclusive evidence and proper verification in such cases.