2000 (4) TMI 23 - HC - Income Tax

Appeal To High Court, Income From Undisclosed Sources, Additions To Income, Appeal To Appellate Tribunal, Business Expenditure

Summary

Issues:
1. Deletion of addition in respect of the sale of five flats
2. Reconsideration of expenditure allowed by the Assessing Officer
3. Disallowance of expenses for centering expenses and purchase of raw material

Analysis:

Deletion of addition in respect of the sale of five flats:
The appellant contended that the Tribunal erred in deleting the addition of Rs. 6.24 lakhs related to the sale of five flats. The High Court observed that during the search, evidence of the sale of 40 flats was found, with the "on money" received being taxed. However, there was no evidence regarding the sale proceeds of the specific five flats in question. As the appellant failed to demonstrate any receipt of sale proceeds for these flats during the relevant period, the Tribunal's decision to delete the addition was upheld. The court concluded that no question of law arose in this regard.

Reconsideration of expenditure allowed by the Assessing Officer:
The second issue involved the Tribunal directing the Assessing Officer to reconsider an expenditure of Rs. 10 lakhs. The High Court noted that the Tribunal did not make a final decision but instead remanded the matter for reconsideration. As no definitive conclusion was reached by instructing the Assessing Officer to reassess the expenditure, the court determined that no question of law arose from this issue.

Disallowance of expenses for centering expenses and purchase of raw material:
Regarding the disallowance of expenses for centering expenses and raw material purchase, the third issue focused on the Tribunal allowing these expenditures based on the partner's statement. The Assessing Officer had initially rejected these expenses, but the Tribunal accepted them after evaluating the evidence. The High Court emphasized that the decision to allow specific expenditures based on available evidence is a question of fact, not law. Therefore, the court concluded that no legal issue was involved in this aspect as well.

In summary, the High Court dismissed the appeal, stating that no substantial questions of law arose from the Tribunal's order. Consequently, the appeal was rejected, and no costs were awarded.