Sh. Tejveer Singh Walia v. Commissioner Of Income Tax, Patiala

ITA No. 91 of 2004 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Sh. Tejveer Singh Walia Versus Commissioner of Income Tax, Patiala ITA No. 91 of 2004 Date of Decision: 6.10.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. D.K. Goyal, Advocate and Mr. Rishabh, Advocate for the appellant.Mr. Rishabh, Advocate for the appellant. Mr. Tajender K. Joshi, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the assessee underSection 260A of the Income Tax Act, 1961 (in short “the Act”) againstthe order dated 2.12.2003 passed by the Income Tax Appellate Tribunal(hereinafter referred to as “the Tribunal”) in ITA No. 823/Chandi/99 forthe assessment year 1995-96, proposing following substantial questionsof law:- “i)Whether under the facts and circumstances of thecase the Tribunal was justified in holding that theimpugned property cannot be said to be the co-ownership property because the plot is registered inthe name of one of the co-owners only and hence tocase the Tribunal was justified in holding that theimpugned property cannot be said to be the co-ownership property because the plot is registered inthe name of one of the co-owners only and hence to ii) iii) b. iv) be treated as an individual property of that person in whose name the plot is registered? Whether under the facts and circumstances of thecase the Tribunal was justified in setting aside theissue of ascertaining the cost of construction formaking valuation again whereas the said directionsgiven are against the decision of the Hon'bleSupreme Court in the case of AMLYA BALA PALreported in 262 ITR 407. (a) Whether under the facts and circumstances ofthe case and on a true interpretation of the provisionsof Section 69, the Tribunal was justified in concurringwith the findings of the authorities below in respect ofthe investment made by Smt. Amarjeet Kaur waliaRs.4,25,000/-, Smt. Meenu Walia Rs.1,09,500/-, Sh.Amarpreet Singh Walia Rs.1,05,000/- andRs.1,60,000/- by the appellant he having admittedonly Rs.1,64,000/- by all and treating the balance asunexplained investment of the appellant? Alternatively even if the Tribunal is justified in treatingthe said investment as unexplained whether theTribunal was justified in not treating the saidinvestment as unexplained in the respective handsas per claim of the various co-owners for investmentin the house? Whether under the facts and circumstances of the case the Hon'ble Tribunal was justified in giving adecision in advance for the amount to be consideredas unexplained though having set aside the issue ofascertainment of the total unexplained investment for redoing by the Assessing Authority?” Alternatively even if the Tribunal is justified in treatingthe said investment as unexplained whether theTribunal was justified in not treating the saidinvestment as unexplained in the respective handsas per claim of the various co-owners for investmentin the house? Whether under the facts and circumstances of the case the Hon'ble Tribunal was justified in giving adecision in advance for the amount to be consideredas unexplained though having set aside the issue ofascertainment of the total unexplained investment for redoing by the Assessing Authority?” 2.Briefly stated, the facts as narrated in the appeal are thatthe appellant was carrying on the business of running a taxi on hire andprior to that he was doing a clerical job in LIC. The sources from thevarious family members were pooled together and to sustain the wholeof the family after the date of the father of the assessee, a plot waspurchased on 24.6.1994 in his name for Rs.1,40,625/-. Theconstruction of the said plot was started by the appellant in the financialyear 1994-95 and continued in 1995-96 and 1996-97 also. Though nobooks of accounts were maintained but the whole of the amount wasinvested by all the family members, thus, ownership of the said land andbuilding irrespective of the fact that the land had been purchased in theindividual name belonged to all the family members comprising ofmother, Smt. Amarjeet Kaur Walia, Tejveer Singh Walia (appellant) andhis family and Sh. Amarpreet Singh Walia (brother) and his family. Atotal investment of Rs.13,79,000/- was made towards the said house asagainst the valuation of Rs.19,78,900/- made by the DepartmentalValuation Officer (DVO). The Assessing Authority vide order dated8.12.1998 found that the investment made in the plot to the extent ofRs.1,40,625/- was liable to be added under Section 69 of the Act beingunexplained investment. Besides this, the total investment in the housefor the first year amounted to Rs.8,89,303/- which was accepted by the assessee. Thus, an addition of Rs.7,25,303/- was made after acceptingthe genuine investment made by the family members amounting toRs.1,64,000/-. The Assessing Authority observed that the said buildingbelonged exclusively to the appellant in his individual capacity beingregistered in his name. The quantum of investment given by theassessee was disbelieved and the balance amount was treated asunexplained income. Feeling aggrieved, the assessee filed an appealbefore the Commissioner of Income Tax (Appeals) [hereinafter referredto as “the CIT(A)”] who vide order dated 5.8.1999 concurred with thefindings of the Assessing Authority and dismissed the appeal. Onfurther appeal by the assessee, the Tribunal vide order dated 2.12.2003partly allowing the appeal remanded the case to the DVO fordetermination of the valuation of the construction of building made bythe assessee during the year in question. However, other findingrecorded by the Assessing Officer and upheld by the CIT(A) weremaintained. 3.We have heard learned counsel for the parties. 4.The controversy in the present appeal can be bifurcated as under:- i)Whether reference to Departmental Valuation Officer(DVO) was legally tenable and the Tribunal had rightlyremanded the case for fresh determination to the DVO.ii)The disallowances in excess of Rs.1,64,000/- on account ofthe alleged amount received from the mother of theassessee Smt. Amarjeet Kaur Walia, Smt. Menu Walia wifeof Shri Tejveer Singh Walia, Shri Amarpreet Singh Walia (brother) and from own sources were tenable in law andcould be treated to be unexplained investment of theappellant under Section 69 of the Act. 3.We have heard learned counsel for the parties. 4.The controversy in the present appeal can be bifurcated as under:- i)Whether reference to Departmental Valuation Officer(DVO) was legally tenable and the Tribunal had rightlyremanded the case for fresh determination to the DVO.ii)The disallowances in excess of Rs.1,64,000/- on account ofthe alleged amount received from the mother of theassessee Smt. Amarjeet Kaur Walia, Smt. Menu Walia wifeof Shri Tejveer Singh Walia, Shri Amarpreet Singh Walia (brother) and from own sources were tenable in law andcould be treated to be unexplained investment of theappellant under Section 69 of the Act. 5.Adverting to the first issue, learned counsel for the partiesare ad-idem that in view of decision of this Court in Income TaxReference No. 48 of 1994,Commissioner of Income Tax v. NabhaSolvex Ltd. dated 7.7.2010, the reference to the DVO was not justifiedand the Tribunal was not right in remanding the case to the DVO fordetermination of the valuation of the construction of building made bythe assessee during the year in question.6.Now referring to the second issue, The Assessing Officer,the CIT (A) and the Tribunal have concurrently recorded that theinvestment of Rs.1,40,625/- (i.e. Rs.1,25,000/- towards cost of plot andRs.15,625/- cost of stamp paper) was unexplained and had to be addedto the income of the assessee. Besides this, the amount in excess ofRs.1,64,000/- paid by the assessee was also treated as unexplainedinvestment and was held to be taxable under Section 69 of the Act. Theassessee had claimed that the following contributions were made during the year for construction of showroom:- Rs.1,64,000/- as per details given below was explained by theassessee:- 8.Thus, the balance amount was treated as unexplainedinvestment under Section 69 of the Act. However, the AssessingOfficer had relied upon the report of the Valuation Officer who hadassessed the cost of construction at Rs.8,89,303/- and treated thebalance amount of Rs.7,25,303/- as unexplained investment underSection 69. Since, it has been held while deciding issue No.1 above,that the reference to Valuation Officer was not justified, therefore, theunexplained investment could not be taken to be Rs.7,25,303/-. Theassessee had shown Rs.7,99,500/- as source of investment for the yearin question out of which Rs.1,64,000/- has been held to be explainedinvestment. Therefore, an addition of Rs.6,35,500/- only could besustained. Thus, total addition to the extent of Rs.6,35,500/- +Rs.1,40,625/- is justified. The aforesaid findings have been upheld bythe CIT(A) and the Tribunal. 9.Learned counsel for the assessee could not advance anymeaningful argument to dispel the findings recorded by the AssessingOfficer, upheld by the CIT(A) and affirmed by the Tribunal except thatan attempt was made to reappreciate the evidence to record conclusionin favour of the assessee which is not permissible under Section 260Aof the Act. The findings of fact based on record are not liable to be ITA No. 91 of 2004 interfered in the present appeal. 10.In view of the above, question No. (ii) is answered in favourof the assessee. Question Nos. (i) & (iii) are answered against theassessee and in favour of the revenue. Question No. (iv) beingconsequential and ancillary to the aforesaid questions stands answeredaccordingly and the appeal is disposed of. (AJAY KUMAR MITTAL) JUDGE October 6, 2010gbs (ADARSH KUMAR GOEL)JUDGE