2009 (1) TMI 909 - HC - Income Tax

Summary

Issues involved: Assessment u/s 143(3) r/w s. 148, disputed additions u/s 69B, appeal before CIT(A), further appeal before Tribunal, substantial question of law regarding deletion of additions u/s 69B.

Assessment u/s 143(3) r/w s. 148:
The assessee was assessed for the asst. yr. 1989-90 with total income of Rs. 2,67,790, including disputed additions of Rs. 2,21,683 as undisclosed income u/s 69B for unexplained investment in construction and Rs. 25,000 as unexplained deposit in savings bank account. The CIT(A) deleted the additions, leading to a further appeal by the Revenue before the Tribunal.

Appeal before Tribunal - Deletion of additions u/s 69B:
The Tribunal dismissed the Revenue's appeal, prompting the present appeal. The substantial question of law revolved around whether the Tribunal was correct in law in deleting the additions made u/s 69B for differences in the value of cost of construction admitted by the assessee. The Revenue sought a relook at the Tribunal's order.

Judgment and Legal Analysis:
The High Court noted that the assessee maintained credible books of accounts, not rejected by the Assessing Officer (AO), and there was no evidence of discrepancies in the area of construction. Referring to a precedent, the Court emphasized that the valuation of properties should align with the actual cost of construction recorded in the books, especially when the books are deemed credible. In this case, as the books were not discredited, the Tribunal's decision to rely on the valuation in the books over that of the Valuation Officer was upheld.

Conclusion:
In line with the precedent and the facts of the case, the Court answered the question of law in favor of the assessee and against the Revenue. The appeal was dismissed with no costs incurred.