2013 (2) TMI 22 - HC - Income Tax

Undisclosed income from proprietorship concern - ITAT deleted the addition - assessment made under Section 158BC - Held that - CIT (Appeals) had found as a fact that from the assessment year 1997-98 it was the assessee s wife Mrs. Pallavi Sood who was the owner of M/s Trans World International. It was on that basis that she had filed the return of income and the finding of the CIT (Appeals) was also accepted by the Revenue. The finding of fact has not been challenged in this court as perverse. It seems that the Revenue, having accepted the finding in the assessee s wife s case, cannot take a different view in the assessment of the husband. That would amount to taking contradictory or inconsistent stands without any just cause. Therefore, no infirmity or error of law in the decision of the Tribunal. Its order does not give rise to any substantial question of law as it is based on not only the findings of fact but also on the Revenue s own conduct - against revenue.

Summary

Issues:
Appeal by Revenue against ITAT order deleting addition of undisclosed income for AY 1998-1999 in block assessment and questioning the perversity of the order.

Analysis:
The Revenue appealed against the ITAT order concerning the addition of undisclosed income for the assessment year 1998-1999. The AO had made an addition of Rs.1,44,19,919 in the block assessment, attributing it to the assessee instead of his wife, who claimed ownership of the business M/s Transworld International. The AO rejected the claim based on an affidavit from the wife and previous statements. The CIT (Appeals) deleted the addition, citing that the income had been disclosed in the wife's returns under Section 139(1) of the Act. The Tribunal upheld this decision, emphasizing consistency in findings. The Tribunal noted that the wife was deemed the owner of the business from 1997-98, as accepted by the Revenue, and the husband until 1996-97. The Tribunal found no error in the decision, based on factual findings and the Revenue's own acceptance of the wife's ownership. The Tribunal dismissed the appeal, stating no substantial question of law arose, and no costs were awarded. The judgment highlighted the importance of consistency in ownership findings and criticized the Revenue for adopting contradictory stances without justification.

In conclusion, the High Court upheld the ITAT decision, dismissing the Revenue's appeal. The judgment emphasized the significance of consistent ownership findings and criticized the Revenue for accepting the wife's ownership in one case and challenging it in the husband's assessment without valid reasons. The decision was based on factual findings and the Revenue's own conduct, with no substantial legal question raised.