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Issues:
- Interpretation of section 69 of the Income-tax Act regarding unexplained investments. - Entertaining additional evidence by the Income-tax Appellate Tribunal. - Justification of the relief granted to the assessee under different heads. - Rejection of applications under section 256(1) and 256(2) of the Income-tax Act. Interpretation of section 69 of the Income-tax Act: In the case, the original assessment for the assessment year 1987-88 was set aside, and a fresh assessment was made, including an unexplained investment in the construction of a building. The Tribunal upheld the addition under the head "Unexplained investment" based on section 69 of the Income-tax Act, which allows assessing unexplained investments based on the financial year immediately preceding the assessment year. The Tribunal determined that no investment was made during the relevant financial year, leading to the sustained addition under this head. Entertaining additional evidence by the Tribunal: The Revenue challenged the Tribunal's decision to entertain additional evidence regarding the absence of investment during the relevant financial year. However, the Tribunal clarified that the evidence was already on record from the account books produced before the assessing authority. The Tribunal emphasized that the material relied upon was part of the assessment proceedings and was not newly introduced. The High Court found no objection raised before the Tribunal regarding the additional evidence and concluded that the order did not give rise to any statable question of law. Justification of relief granted to the assessee: The appellate authority granted relief to the assessee under the head "Business income" and "Unexplained investment." The Tribunal upheld the relief under the head "Business income" and allowed the appeal filed by the assessee regarding the addition under the head "Unexplained investment." The Tribunal's decision was based on the interpretation of section 69 of the Income-tax Act and the lack of investment during the relevant financial year. Rejection of applications under section 256(1) and 256(2): The Revenue filed applications under section 256(1) and 256(2) challenging the Tribunal's decisions. The Tribunal rejected the applications under section 256(1), leading the Revenue to file applications under section 256(2) before the High Court. The High Court dismissed the application under section 256(2) after considering the arguments presented by the Revenue, emphasizing that the Tribunal's decision was based on existing facts and did not raise any legal question for consideration. In conclusion, the High Court rejected the application filed by the Revenue, upholding the Tribunal's decision regarding the interpretation of section 69 of the Income-tax Act and the acceptance of additional evidence in the assessment proceedings. The judgment focused on the factual findings and concluded that no legal question arose from the Tribunal's order, leading to the dismissal of the application.
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