2011 (1) TMI 98 - HC - Income Tax

Unexplained investment - Block assessment - jewellery seized during the course of search - AO treated the jewellery as unexplained investment u/s 69 - assessee could not discharge the onus lay upon him by not giving the documentary evidence whether Tribunal was justified in law in not adjudicating the case on merit on the ground that assessee s application is pending before the Settlement Commission - Tribunal was not justified in directing the Assessing Officer to pass an order in conformity with the order of the Settlement Commission - Tribunal has considered the entire facts and circumstances of the case and its order is concluded by findings of fact - No substantial question of law is involved Appeal dismissed

Summary

Issues:
1. Justification of treating jewellery as explained or unexplained.
2. Deletion of addition made on account of commission earned on sale of flats.
3. Restoration of matter back to the Assessing Officer for passing a consolidated order.

Analysis:
1. The first issue revolves around the treatment of jewellery weighing 700 gms out of the total jewellery seized during a search. The department contended that the jewellery should be treated as unexplained investment under section 69 of the Act due to the failure of the assessee to explain the source of acquisition. However, the CIT (A) and the Tribunal accepted the explanation provided by the assessee. The High Court upheld this decision, emphasizing that the findings were factual and not substantial questions of law.

2. The second issue pertains to the deletion of an addition made by the Assessing Officer on account of commission earned on the sale of flats. The department argued that the assessee did not provide documentary evidence regarding the sale of flats, leading to the undisclosed profit. Nevertheless, the CIT (A) and the Tribunal upheld the deletion of the addition. The High Court concurred, stating that no illegality or perversity was found in the decision of the lower authorities.

3. The final issue involves the direction to the Assessing Officer to pass a consolidated order after receiving the order of the Settlement Commission. The department contended that since the assessee did not file an application before the Settlement Commission, the Tribunal's direction was unjustified. However, it was revealed that an application was filed by another entity with which the assessee had business dealings. The High Court ruled that the questions raised did not arise from the Tribunal's order and were not substantial questions of law, ultimately dismissing the department's appeal.

In conclusion, the High Court dismissed both appeals, upholding the decisions of the lower authorities regarding the treatment of jewellery, deletion of addition on commission earned, and the direction to the Assessing Officer for a consolidated order. The judgment emphasized the factual nature of the findings and the absence of substantial legal questions in the issues raised.