2010 (8) TMI 640 - HC - Income Tax

Search and seizure - Block assessment - Addition - Unexplained cash - In relation to the grounds on which there are concurrent findings by the CIT (A) and the Tribunal there does not arise any question of law what to say of a substantial one - while questioning the rebate of 15% for conversion from CPWD to PWD rates is worthless - It has only afforded an opportunity to the assessee to place its case before the AO and to get the issues tried in accordance with law - No substantial question of law is made out in this case within the meaning of Section 260-A of the Act - The appeal is dismissed

Issues Involved:
1. Deletion of addition on account of unexplained cash found.
2. Deletion of addition on account of unexplained investment in construction of residential house.
3. Deletion of addition on account of unexplained expenditure incurred for house expenses.
4. Deletion of addition on account of unaccounted expenditure incurred on Ring Ceremony.
5. Deletion of addition on account of unaccounted expenditure incurred on celebration of 25th marriage anniversary.
6. Deletion of addition on account of unexplained deposits in bank account of silver jubilee celebration.
7. Deletion of addition on account of unaccounted expenditure incurred in purchase of valuable items.
8. Deletion of addition on account of unexplained investment in FDRs and interest thereon.
9. Deletion of addition on account of unexplained investment in IVPs and interest thereon.
10. Deletion of addition on Protective basis on account of unexplained investment in renovation of shop.
11. Deletion of surcharge levied under Section 113 of the Income Tax Act.

Detailed Analysis:

1. Unexplained Cash Found:
The Tribunal found the CIT (A) justified in deleting the addition of Rs.25,101/- made on account of unexplained cash found from the assessee's residence. The Tribunal accepted the explanations of the assessee with reference to the material on record and the customs of the family.

2. Unexplained Investment in Construction of Residential House:
The Tribunal upheld the CIT (A)'s decision to allow a 10% discount towards self-supervision charges but modified the rebate for the difference between CPWD rates and PWD rates from 20% to 15%. The Tribunal directed the AO to verify the amount already brought to tax on account of unexplained investment in the house property by the assessee or as a contribution by other family members, ensuring no double taxation occurs. The Tribunal stated:
> "The adjusted cost worked out after allowing the aforesaid adjustment shall be taken as cost of construction of the property."

3. Unexplained Expenditure for House Expenses:
The Tribunal found the CIT (A) not justified in deleting the entire addition but also found the AO's estimate excessive. The Tribunal worked out the annual drawings based on the facts on record to determine the undisclosed income, modifying the CIT (A)'s order accordingly.

4. Unaccounted Expenditure on Ring Ceremony:
The Tribunal upheld the CIT (A)'s deletion of Rs.75,000/- out of the total addition of Rs.100,000/- made on account of unaccounted expenditure incurred on the Ring Ceremony.

5. Unaccounted Expenditure on 25th Marriage Anniversary:
The Tribunal allowed the ground raised by the Revenue regarding the expenditure on the 25th marriage anniversary celebrations but did not allow the deletion of Rs.74,800/- out of cash gifts received during those celebrations.

6. Unexplained Deposits in Bank Account:
The Tribunal upheld the CIT (A)'s deletion of Rs.74,800/- made on account of unexplained deposits in the bank account of the silver jubilee celebration.

7. Unaccounted Expenditure on Valuable Items:
The Tribunal partly accepted the Revenue's submissions, adjusting the value of the items to Rs.1,28,000/- from Rs.1,68,000/-. The Tribunal directed the AO to verify the amount already disclosed by the assessee and stated:
> "The rest of the amount needs to be treated as unexplained."

8. Unexplained Investment in FDRs and Interest Thereon:
The Tribunal upheld the CIT (A)'s deletion of Rs.132,000/- and Rs.88,746/- made on account of unexplained investment in FDRs and interest thereon.

9. Unexplained Investment in IVPs and Interest Thereon:
The Tribunal upheld the CIT (A)'s deletion of Rs.30,000/- and Rs.5,000/- made on account of unexplained investment in IVPs and interest thereon.

10. Unexplained Investment in Renovation of Shop:
The Tribunal found the matter requiring reconsideration by the AO, stating:
> "This fact needs to be verified by the Assessing Officer."

11. Surcharge Levied under Section 113:
The Tribunal allowed the ground with reference to the decision of the Hon'ble Supreme Court in the case of CIT vs. Suresh N. Gupta: (2008) 214 CTR 274.

Conclusion:
The High Court dismissed the appeal, finding no substantial question of law. The Tribunal's findings were based on meticulous examination of facts, and no case of perversity was made out. The Tribunal's decisions on various grounds were upheld, and the remittance of some issues to the AO for verification was deemed appropriate. The appeal was dismissed as it related only to questions of fact and did not warrant interference.

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