1982 (3) TMI 84 - AT - Income Tax

Summary

Issues:
Departmental appeal against order of AAC under section 154 of the Income-tax Act, 1961 - Addition of unexplained investment in house property - Jurisdiction of AAC to entertain application under section 154.

Analysis:
The judgment pertains to a departmental appeal against the order of the AAC under section 154 of the Income-tax Act, 1961. The assessee, an individual, had an addition of Rs. 32,100 made by the ITO for unexplained investment in a house property for the assessment year 1977-78. The AAC, in his appellate order, reduced the addition to Rs. 23,110 and granted relief of Rs. 3,000 for the cost of construction of a boundary wall. The revenue appealed to the Tribunal challenging the AAC's decision. The Tribunal set aside the AAC's order and directed a fresh decision after considering additional evidence. Meanwhile, the assessee filed an application under section 154 requesting the ITO to divide the unexplained investment on a pro rata basis for the years 1973-74 to 1977-78. The AAC allowed this request, leading to the revenue's appeal. The revenue argued that the AAC exceeded jurisdiction by entertaining the section 154 application, as the issue was already under appeal before the Tribunal. The assessee defended the AAC's decision, although acknowledging the absence of a specific ground on pro rata division before the AAC initially. The Tribunal found merit in the revenue's argument, holding that the AAC lacked jurisdiction to entertain the section 154 application due to the pending appeal before the Tribunal. Consequently, the AAC's order under section 154 was set aside, and the appeal was allowed.