2007 (6) TMI 140 - HC - Income Tax

Unexplained investment AO made addition in the total income of the assessee as unexplained investment in the construction of commercial complex on the basis of valuation of DVO report but rejected by the tribunal on the ground that amendment to section 142A would not apply in present case

Summary

Issues:
1. Validity of reassessment under Section 147
2. Applicability of Section 142A for assessment year 1996-97

Issue 1: Validity of reassessment under Section 147
The appeal was against the order of the Income-tax Appellate Tribunal, challenging the reassessment made under Section 147 and the deletion of an addition towards unexplained investment in the construction of a commercial complex. The assessee's returns for the assessment year 1996-97 were processed under Section 143(3) of the Act. The Commissioner of Income Tax (Appeals) directed the assessment of unexplained investment in the construction of a commercial complex. A notice under Section 148 was issued for reassessment, leading to the filing of returns and subsequent issuance of notice under Section 143(2) of the Act. The Tribunal allowed the appeal, stating that the amendment to Section 142A would not apply as the order passed earlier in the assessee's own case had become final.

Issue 2: Applicability of Section 142A for assessment year 1996-97
The Tribunal refused to apply the amendment to Section 142A, citing that the order dated 31.12.2003 had become final. The revenue contended that a miscellaneous petition against the order was pending, indicating that the order had not concluded before the relevant date. However, due to the negligible tax effect involved and the lack of clarity on the status of the miscellaneous petition, the Court dismissed the appeal, stating that the Tribunal's decision did not warrant interference.

In conclusion, the High Court dismissed the appeal, emphasizing the negligible tax effect and the lack of clarity regarding the pending miscellaneous petition. The Court upheld the Tribunal's decision not to apply the amendment to Section 142A, as it deemed the order in the assessee's own case to have become final.