1996 (3) TMI 90 - HC - Income Tax

Summary

Issues:
1. Whether the Tribunal was correct in deleting the addition of Rs. 78,000 on account of unexplained investment in the property?
2. Whether the Tribunal was correct in concluding that the assessee was not the owner of the property?
3. Whether the Tribunal was correct in holding that the income from the property was not assessable in the hands of the assessee?

Analysis:

Issue 1:
The case involved the Department's application under section 256(2) of the Income-tax Act, 1961, to direct the Income-tax Appellate Tribunal to refer questions of law to the High Court. The Tribunal had deleted the addition of Rs. 78,000 made by the Income-tax Officer regarding unexplained investment in the property in the name of the assessee's wife. The Income-tax Officer found the alleged gift to be false, but the Tribunal disagreed. The High Court upheld the Tribunal's decision, stating that the burden of proof was on the Department to show that the rest of the consideration amount was paid by the assessee himself. The Tribunal's findings were based on the appreciation of facts, and no question of law arose from their decision.

Issue 2:
Regarding the ownership of the property, the Income-tax Officer added Rs. 78,000 and Rs. 8,000 to the assessee's income, considering the house to be benami. However, the Appellate Assistant Commissioner sustained only the addition of Rs. 78,000, while the Tribunal reversed all additions. The High Court agreed with the Tribunal, emphasizing that the Department failed to prove that the assessee had contributed the entire sum for the property purchase. The Tribunal's decision was based on factual findings and did not give rise to any legal question.

Issue 3:
The Department contended that the income from the property should be assessable in the hands of the assessee. However, the Tribunal rejected this argument, stating that the wife was a mere benamidar. The High Court upheld the Tribunal's decision, citing that the findings were based on evidence and did not warrant any legal question. The High Court dismissed the Department's applications, emphasizing that the Tribunal's order was factual and not based on legal issues.

In conclusion, the High Court upheld the Tribunal's decision in all aspects, emphasizing that the findings were based on factual evidence and did not raise any legal questions for reference. The Department's applications were dismissed, and no costs were awarded.