2002 (6) TMI 13

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..... m April 1, 1994, which is prospective and not retrospective in operation?" The respondent (hereinafter referred to as "the assessee") is a building contractor and his business is the construction and sale of flats. The assessee for the assessment year 1991-92 offered his income including the net profit that arose from the sale of flats. The assessee, during the previous year relevant to the assessment year 1991-92, had constructed 12 flats and the cost of construction of the flats as admitted by him was Rs. 16.55 lakhs. The assessee also filed a report of the approved valuer and the approved valuer estimated the cost of construction of the flats to be Rs. 15.72 lakhs. The Assessing Officer referred the matter of valuation of the flats to .....

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..... me escapement of income cannot be ruled out and sustained an addition of a sum of Rs. 2.5 lakhs and he also directed that the sum of Rs. 2.5 lakhs should be spread over two years, viz., one lakh rupees should be assessed in the assessment year 1991-92 and the balance of Rs. 1.5 lakhs should be brought to tax in the assessment year 1990-91. The assessee preferred an appeal before the Income-tax Appellate Tribunal. The Appellate Tribunal found that the Department has not brought any material to show that the assessee had really invested more amount than that was accounted for and there are no materials to show that the assessee had invested a huge sum, which was added by the Income-tax Officer, in the construction of flats. The Appellate Tr .....

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..... ment. Learned counsel for the appellant assailed the correctness of the order of the Income-tax Appellate Tribunal. We find that the ultimate finding of the Appellate Tribunal that no addition is warranted on the facts of the case is based on appreciation of evidence. The Appellate Tribunal has taken into account the nature of construction and the cost of construction and the profit margin of the assessee on the sale of flats. The Appellate Tribunal found that the Department has not established by any material that the assessee had really invested huge sum in the construction of flats. The Appellate Tribunal also found that the Department has not established that there was an understatement in the sale value of the flats. The Appellate .....

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