2013 (8) TMI 239 - HC - Income Tax

Undisclosed investment - Tribunal held there was full disclosure of all investments therefore deleted disallowance - Held that - Whether any sale consideration in excess to what was disclosed before the Assessing Officer was paid or not is essentially based on facts to be judged on the basis of relevant material on record. When CIT A and the Tribunal both concurrently came to the conclusion that there is no evidence supporting the assessing Officer s version that the assessee had invested large amount in purchase of the land, then no substantial question of law arises - Decided against Revenue.

Summary

Issues:
1. Dispute over deletion of undisclosed investment in Indira Vikas Patra (IVP) and accrued interest.
2. Disagreement regarding undisclosed investment in Kisan Vikas Patra (KVP) and accrued interest.
3. Addition of undisclosed investment in agricultural land and rejection of evidence.

Analysis:

Issue 1:
The first issue involves the deletion of an undisclosed investment in IVP and accrued interest. The Assessing Officer added Rs. 8.85 lakhs as undisclosed investment in IVP and Rs. 14.20 lakhs as accrued interest. However, the CIT [A] and Tribunal disagreed with this addition. The CIT [A] found that the seized document did not support the Revenue's claim that the investment details only went up to April 1999. The Tribunal upheld this decision, stating that the Assessing Officer's presumption was not based on evidence. The interest accrued was also disputed, with the Tribunal concluding that there was no justification for including it. The courts found no legal question as the issue was factual.

Issue 2:
The second issue concerns the undisclosed investment in KVP and accrued interest. The Assessing Officer added Rs. 8 lakhs as undisclosed investment and Rs. 5.13 lakhs as accrued interest. The CIT [A] and Tribunal, however, accepted the assessee's explanation that the deposits were made from undisclosed income of a firm. They found no legal question as the issue was factual and upheld the deletion of the addition.

Issue 3:
The final issue involves the addition of undisclosed investment in agricultural land. The Assessing Officer added Rs. 25.87 lakhs based on statements from sellers. The CIT [A] deleted this addition, citing lack of opportunity for cross-examination and unreliable evidence. The Tribunal agreed, noting discrepancies in land prices and lack of cross-examination. Both levels of the court found no legal question as the conclusion was based on factual analysis.

In conclusion, the courts dismissed the Tax Appeal, upholding the decisions to delete the additions of undisclosed investments and accrued interest in IVP and KVP. They also supported the deletion of the addition related to undisclosed investment in agricultural land due to lack of reliable evidence and procedural irregularities. The judgments were based on factual assessments, and no legal questions were found to warrant further consideration.