1993 (10) TMI 134 - AT - Income Tax

Summary

Issues:
1. Addition to business income
2. Addition of Rs. 1 lac on account of investment in the construction of residential house

Issue 1: Addition to business income

The assessee challenged the addition to business income, which was estimated by the Assessing Officer due to lack of maintained accounts. The Assessing Officer made an addition of Rs. 5,600 to the net income from the transport commission business, totaling it to Rs. 20,000. The ITAT upheld the addition, noting the absence of maintained accounts and the proper estimation of income. The assessee did not provide specific arguments against the addition, leading to the sustained decision by the IT authorities.

Issue 2: Addition of Rs. 1 lac on account of investment in the construction of residential house

The Assessing Officer added Rs. 1 lac to the total income of the assessee due to unexplained investment in the construction of a residential house. The assessee claimed to have advanced a loan to his wife for the construction. In the reopened assessment, the Assessing Officer concluded that the entire investment was made by the assessee from undisclosed sources. The ITAT analyzed various documents, including sale deed, receipts, and permissions, proving that the property was owned by the wife and the investment was made by her. The ITAT found no evidence to support the assumption that the wife was a benami owner, leading to the deletion of the Rs. 1 lac addition to the total income of the assessee.

In conclusion, the ITAT partly allowed the appeal, deleting the addition of Rs. 1 lac on account of investment in the construction of the residential house while upholding the addition to the business income.