2003 (1) TMI 77 - HC - Income Tax

The only question which now survives for consideration is as to whether the Tribunal was justified in taking the view that a mere statement of counsel before the High Court in civil litigation between the parties was not conclusive and the material placed on record by the assessee had bearing on the question of investment in the property in question. - The Tribunal has rightly noted that before it the parties were ad idem that the addition in question was made only on the basis of the observations in the interim order passed by the court in a civil suit between the three parties, including the assessee. - The issue raised by the Revenue essentially pertains to a question of fact and does not involve the application of any legal principles to the facts established by evidence.

Summary

Issues involved:
1. Addition of unexplained investment in the Mussoorie project under section 69B of the Income-tax Act.
2. Deletion of the addition based on the statement made by counsel and evidence gathered by lower authorities.
3. Holding that the statement made by the senior standing counsel is not conclusive.
4. Assessment of addition under section 69B for the year 1998-99.
5. Rejection of books of account by the Assessing Officer.
6. Deletion of a portion of the addition despite sufficient material to support the full addition.
7. Allegation of the Tribunal ignoring evidence gathered by lower authorities.

Analysis:
1. The case involved the Revenue appealing against the deletion of an addition of Rs. 8.01 crores made by the Assessing Officer under section 69B of the Income-tax Act regarding unexplained investment in the Mussoorie project for the assessment year 1998-99.
2. The Tribunal deleted the addition based on various facts not rebutted by the Departmental Representative, including valuation by an approved valuer, municipal authorities' assessment, and observations regarding the investment timeline and involvement of multiple parties in the project.
3. The Revenue argued that the Tribunal erred in considering only the statement of senior counsel before the High Court as the basis for the addition, claiming the decision was perverse. However, the Tribunal found no other material presented by the Revenue to support the addition.
4. The burden of proof under section 69B lies with the Revenue to show real investment exceeding what is in the books of account. The Tribunal correctly held that a statement in civil court by counsel alone is insufficient to establish actual investment without additional supporting evidence.
5. The Tribunal's decision to delete the addition was deemed appropriate as it considered relevant factors and found the Revenue failed to provide substantial evidence to determine the total investment amount by the assessee in the property.
6. The issues raised by the Revenue were factual in nature and did not involve the application of new legal principles, leading the court to dismiss the appeal as no substantial question of law arose from the Tribunal's order.