The Commissioner Of Income-Tax, Salem v. Chan Basha

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 14.06.2007 Coram : THE HONOURABLE MR.JUSTICE P.D.DINAKARAN AND THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) No.636 of 2007 The Commissioner of Income-tax,Salem. ..AppellantVs Chan Basha ..Respondent Appeal under Section 260A of the Income-tax Act, 1961 against theorder of the Income Tax Appellate Tribunal, Chennai Bench 'D', Chennai inI.T.A. No.2880/Mds/2004 dated 24.03.2006 for the assessment year 1999-2000, against the order in ITA.No.102/03-04, dated 5.8.04 on the file ofthe Commissioner of Income Tax (Appeals) Salem against the order inPAN.GIR.No.C3774, dated 31.03.03 on the file of the Income Tax OfficerWard I (I), Salem-7. For Appellant :Mr.T.Ravi Kumar,Standing Counsel forIncome-tax Department JUDGMENT (Judgment of the Court was delivered byP.P.S.Janarthana Raja, J.) This appeal is filed under Section 260A of the Income Tax Act, 1961by the Revenue, against the order of the Income Tax Appellate Tribunal,Chennai Bench 'D', Chennai in I.T.A. No.2880/Mds/2004 dated 24.03.2006raising the following substantial question of law:- Whether on the facts and in the circumstances of thecase, the Income-tax Appellate Tribunal was right inlaw in holding that there is no contribution made bythe assessee during the assessment year for theconstruction, even though the investments are notcontained in any books of account and they areunexplained or the explanation is unsatisfactory, thevalue of the investment is to be deemed to be theincome of the assessee for the financial year preceding https://hcservices.ecourts.gov.in/hcservices/ the assessment year under section 69 of the Income-taxAct, 1961? 2.The facts leading to the above substantial question of law areas under: The assessee is an individual engaged in the business of footwear.The relevant assessment year is 1999-2000 and the corresponding accountingyear ended on 31.03.1999. The assessee has not filed Return of income andhence notice under Section 142(1) of the Income-tax Act ("Act" in short)was issued, calling upon the assessee to file his Return of income for theassessment year. In response to the notice, the assessee filed his Returnof income on 24.03.2003 admitting a total income of Rs.49,866/-. Laternotice under Section 143(2) was issued to the assessee. The assessmentwas completed under Section 143(3) r/w Section 147 of the Act determiningthe total income at Rs.10,72,290/-. While completing the assessment, theAssessing Officer treated 50% of the difference in the cost ofconstruction, i.e., Rs.10,22,425/- as assessee's unaccounted income frombusiness and added the same to his total income. Aggrieved by the order,the assessee filed an appeal to the Commissioner of Income-tax (Appeals).The C.I.T.(A) deleted the addition and set aside the order of theAssessing Officer. Aggrieved, the Revenue filed an appeal to the Income-tax Appellate Tribunal ("Tribunal" in short). The Tribunal dismissed theRevenue's appeal and confirmed the order of the C.I.T.(A). Hence thepresent appeal by the Revenue. 3.Learned Standing Counsel appearing for the Revenue submittedthat the Departmental Valuer estimated the cost of construction atRs.42,28,700/- as against the estimated cost of construction atRs.21,83,855/-. Before the Departmental Valuer the assessee had filed theyear-wise investment from which it could be seen that the assessee hadcontributed towards the capital for Kalyana Mandapam upto 31.03.1999 atRs.11,33,855/- and his wife C.Jabeena at Rs.10,50,000/-. The investmentswere not reflected in the books of account and the assessee also did notoffer any explanation for the difference in the cost of construction.Hence the Assessing Officer is right in making addition of the differenceamount in the hands of the assessee under Section 69 of the Act. 3.Learned Standing Counsel appearing for the Revenue submittedthat the Departmental Valuer estimated the cost of construction atRs.42,28,700/- as against the estimated cost of construction atRs.21,83,855/-. Before the Departmental Valuer the assessee had filed theyear-wise investment from which it could be seen that the assessee hadcontributed towards the capital for Kalyana Mandapam upto 31.03.1999 atRs.11,33,855/- and his wife C.Jabeena at Rs.10,50,000/-. The investmentswere not reflected in the books of account and the assessee also did notoffer any explanation for the difference in the cost of construction.Hence the Assessing Officer is right in making addition of the differenceamount in the hands of the assessee under Section 69 of the Act. 4.Heard the counsel. The assessee had shown the cost ofconstruction of Kalyana Mandapam at Rs.21,83,855/-. The DepartmentalValuer estimated the cost of construction at Rs.42,28,700/-. During theyear under appeal, the first appellate authority as well as the Tribunalfound that there was no contribution by the assessee towards construction.Paragraph-5 of the C.I.T(A)'s order, reads as follows:- "Even on merits, there cannot be a question of additionwhen there is no contribution from the appellant; theinformation of which is available on record. Anotherpoint to be considered is, that, the valuation reportshows the period of construction from April 1987 toMarch 1999 and the contribution of all the partnersfrom the beginning to end has been given. In the yearunder appeal, the appellant had apparently notcontributed any amount towards investment." The said finding of the C.I.T.(A) was confirmed by the Tribunal and thesame has not been controverted. Hence the addition made by the AssessingOfficer was rightly deleted by the authorities below. The concurrentfindings given by both the authorities below are based on valid materialsand evidence. Recently, the Supreme Court in the case of Commissioner ofIncome-tax Vs. P.Mohanakala (291 ITR 278), held that whenever there is aconcurrent finding by the authorities below, no interference should becalled for by the High Court. Under the circumstances, we do not find anyerror or legal infirmity in the order of the Tribunal so as to warrantinterference. 5.In view of the foregoing reasons, no substantial question of lawarises for consideration of this Court and accordingly, the tax case isdismissed. No costs. km Sd/-Asst.Registrar/true copy/ Sub Asst.RegistrarTo 1. The Assistant Registrar, Income-tax Appellate Tribunal, Chennai Bench "D", Rajaji Bhavan,Besant Nagar,Chennai-90. (5 Copies)2. The Commissioner of Income-tax (Appeals), No.3, Gandhi Road, Salem-636 007.3. The Income-tax Officer, Ward-I(1), Salem-7. 4. The Commissioner of Income Tax, Salem. +1 cc to Mr.N.Muralikumaran, Advocate Sr.No.34899. ASM(CO)dcp/27.06.07 T.C.(A) No.636 of 2007