2012 (7) TMI 911 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) for A.Y. 2005-2006 regarding addition u/s 69B and disallowance u/s 69B.

Addition u/s 69B:
The appellant Revenue challenged the deletion of addition of Rs. 1,69,83,383 made by the A.O. u/s 69B, arguing that the deletion contradicted findings in the CIT(A)'s order. The dispute arose from the variance in valuation certificates for construction costs. The CIT(A) found that the actual amount spent on the project was Rs. 12.96 crores, including Rs. 3.95 crores on the 2nd and 3rd floors, whereas the projected cost in the second valuation certificate was Rs. 5.65 crores. The Tribunal upheld the CIT(A)'s decision, stating that the A.O. was wrong in presuming the entire projected cost had been spent before 31.3.2005.

Disallowance u/s 69B:
The Revenue also contested the deletion of disallowance of Rs. 1,50,00,000 made u/s 69B, arguing that the CIT(A) did not fully address the AO's contentions. However, the CIT(A) reconciled the loan amounts and found no basis for the significant addition made by the AO. The Tribunal upheld the CIT(A)'s decision to delete the disallowance, noting that the A.O. had erred in the calculation, adding Rs. 1,50,00,000 instead of Rs. 1,55,00,000. The Tribunal dismissed the Revenue's appeal.