2014 (8) TMI 37 - HC - Income Tax

Admission of appeal Undisclosed income on sale of house Held that - Tribunal tightly recorded that being one of the seven legal heirs the share of the Assessee in the property was to the extent of 1/7th share, the Tribunal has rightly restricted the addition there was no reason to interfere with the finding recorded by the Tribunal and consequently restricting the addition Decided against Revenue. Unexplained investment in house Held that - The Tribunal was rightly of the view that the Assessee has filed an explanation but it could not be substantiated by the Assessee or controverted by the Revenue with evidence - The Tribunal has rightly restricted the addition in the facts and circumstances of the case, no error has been committed by the Tribunal restricting the addition rest of the grounds urged by the revenue are admitted for adjudication - Decided against Revenue.

Summary

Issues:
1. Correction of respondent's address in cause title.
2. Deletion of additions by the Appellate Tribunal on various grounds.
3. Addition of undisclosed income on the sale of a house.
4. Addition of unexplained investment in a house.

Analysis:

Issue 1: Correction of respondent's address
The High Court granted leave to correct the respondent's address in the cause title.

Issue 2: Deletion of additions by the Appellate Tribunal
The Revenue challenged the deletion of various additions by the Appellate Tribunal. The substantial questions of law included the deletion of amounts related to bogus purchases, undisclosed income on the sale of a house, disallowance of interest expense, deemed income under Sections 68 and 69 of the Act, and unexplained investment in a house. The Court considered each question separately.

Issue 3: Addition of undisclosed income on the sale of a house
Regarding the addition of undisclosed income on the sale of a house, the Tribunal observed that the property belonged to the father of the assessee, and as one of the legal heirs, the assessee's share was limited to 1/7th. The Court upheld the Tribunal's decision to restrict the addition to the assessee's share of the sale proceeds, which was rounded off to Rs. 1,08,000.

Issue 4: Addition of unexplained investment in a house
In the case of unexplained investment in a house, the Tribunal found that the assessee failed to provide sufficient evidence to support the claim that the funds used belonged to the father. The Tribunal restricted the addition to Rs. 2,00,000, considering the facts and circumstances. The Court agreed with the Tribunal's decision, finding no error in restricting the addition to Rs. 2,00,000.

In conclusion, the High Court dismissed the appeal against the Tribunal's decisions on the deletion of additions and upheld the restrictions imposed on the undisclosed income and unexplained investment in the house.