2007 (6) TMI 157 - HC - Income Tax

AO treated difference in cost of construction of Kalyan Mandapam as unaccounted income from business concurrent finding by Comm(A) & tribunal that no contribution by assessee made towards construction is based on valid material No error or legal infirmity in impugned order

Summary

Issues:
Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal regarding the treatment of unaccounted income from business and addition to total income.

Analysis:
The case involves an appeal filed by the Revenue against the order of the Income Tax Appellate Tribunal, Chennai Bench 'D', regarding the treatment of unaccounted income from business. The substantial question of law raised was whether the Tribunal was correct in holding that there was no contribution made by the assessee for construction, leading to the addition of the difference amount in the hands of the assessee under Section 69 of the Income Tax Act, 1961. The assessee, engaged in the business of footwear, had not filed the Return of income initially, but later admitted a total income. The Assessing Officer treated 50% of the difference in the cost of construction as unaccounted income and added it to the total income. However, the Commissioner of Income-tax (Appeals) deleted the addition, which was upheld by the Tribunal.

The Revenue argued that the Departmental Valuer estimated the cost of construction higher than what was shown by the assessee, and the investments made by the assessee and his wife were not reflected in the books of account. The Revenue contended that the Assessing Officer was justified in making the addition under Section 69 of the Act due to the lack of explanation for the difference in the cost of construction. However, both the first appellate authority and the Tribunal found that there was no contribution by the assessee towards the construction, as confirmed in the C.I.T(A)'s order. The Tribunal upheld the finding that the appellant had not contributed any amount towards the investment during the relevant period.

The Tribunal's decision was based on valid materials and evidence, and the concurrent findings by the authorities below were considered in line with the Supreme Court's ruling in a similar case. The High Court concluded that no substantial question of law arose for consideration, and therefore, dismissed the tax case without costs. The judgment emphasized the importance of not interfering when there are concurrent findings by the lower authorities, affirming the Tribunal's decision in this case.