Ita/173/2000 Of Ita. Sakthi Tourist Home v. 4He Commissioner Of Incometax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 26TH MAY 2008 / 5TH JYAISHTA 1930 ITA.No. 173 of 2000() --------------------- AGAINST THE ORDER DATED 27/04/2000 IN ITA.898/COCH/1992 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/ASSESSEE: ----------------- M/S.SAKTHI TOURIST HOME,BAKER JUNCTION, KOTTAYAM,REP. BY ITS MANAGING PARTNERSHRI.MATHEW PHILIP. BY ADV. SRI.C.KOCHUNNY NAIR SRI.DALE P.KURIEN RESPONDENTS: ------------- THE COMMISSIONER OF INCOME-TAX,ERNAKULAM. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 26/05/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. .................................................................... ....................................................................Dated this the 26th day of May, 2008. JUDGMENT Ramachandran Nair, J. This is an appeal filed by the assessee challenging the addition sustained by the Tribunal under Section 69B of the Income Tax Act.Assessee is a firm which was engaged in running of a tourist home. Duringsearch conducted on 9.10.1987, the department noticed creation of asset inthe form of a building constructed by the assessee. The investmentaccounted by the assessee for the building was only Rs.23 lakhs and odd.However, department got the same valued at above Rs.49 lakhs. Aftergiving some deductions, the Assessing Officer refixed the value atRs.45,82,327/-. After taking into account the amount of investmentaccounted by the assessee, the Assessing Officer made addition ofRs.22,77,068/- as income in the form of unexplained investment underSection 69B of the Act. However, in first appeal, the C.I.T.(Appeal)accepted explanation offered by the assessee and reduced the addition toRs.8,44,475/-. Even though assessee as well as department filed separateappeals to the Tribunal against the order of C.I.T.(Appeal), the Tribunal dismissed both the appeals leading to finality of order of C.I.T.(Appeal). 2. Even though assessee has raised several questions of law, we donot think any question raised is a substantial question of law on which onlyappeal is maintainable under Section 260A of the Income Tax Act. Theunexplained investment is deemed income of the year in which ivnestmentis made as provided under Section 69B of the Act. The issue raised in thiscase only involves the actual amount of investment which is a matter ofvaluation. In fact it is seen that the valuation made by the departmentvaluer is substantially reduced by the C.I.T.(Appeal) which foundacceptance by the Tribunal. We do not find we have any authority to enterinto the controversy on valuation of assests which is a pure factual issue.Therefore, there is no question of law involved so far as valuation of assetis concerned, which led to specific addition reduced by the C.I.T.(Appeal).So far as the next aspect of the question raised i.e. assessee's request forspreading over of unexplained investment for several years, we do not thinkthe same is permissible because Section 69B specifically states that theunexplained investment should be treated as the income of the year in whichinvestment is made. There is nothing on record to prove the stage ofconstruction of the building at the time of acquisition by the firm and theperiod during which subsequent additions to the building was made. The claim for spreading over of the investment for several years can be granted only if it is proved that the investment is made in several years. There is nosuch evidence in this case. Therefore, the Tribunal rightly rejected theclaim of spreading over. Further, the assessee has raised this question forthe first time before the Tribunal and therefore, we do not find any groundto interfere with the order in appeal on this issue also. The appeal isconsequently dismissed. claim for spreading over of the investment for several years can be granted only if it is proved that the investment is made in several years. There is nosuch evidence in this case. Therefore, the Tribunal rightly rejected theclaim of spreading over. Further, the assessee has raised this question forthe first time before the Tribunal and therefore, we do not find any groundto interfere with the order in appeal on this issue also. The appeal isconsequently dismissed. C.N.RAMACHANDRAN NAIRJudge pms V.K.MOHANANJudge