1993 (8) TMI 137 - AT - Income Tax

Summary

Issues Involved:
1. Validity of notice issued u/s 148.
2. Addition of Rs. 2,02,135 as undisclosed investment.
3. Addition of Rs. 70,000 as unexplained investment.
4. Charging of interest u/s 139(8)/217.

Summary:

1. Validity of notice issued u/s 148:
The assessee contested the validity of the notice issued u/s 148, arguing that since her income was below the taxable limit, she was not obliged to file a return. The Tribunal rejected this objection, holding that the Assessing Officer had a reasonable basis to believe that the assessee's income had escaped assessment due to the construction of a house property.

2. Addition of Rs. 2,02,135 as undisclosed investment:
The Tribunal examined the conflicting valuation reports from the Departmental Valuation Officer and the registered valuers. The Departmental Valuation Officer's report was found lacking in justification and evidence. The Tribunal preferred the Rajasthan PWD BSR rates over the CPWD rates, as the former were more appropriate for estimating the cost of construction in Jaipur. Consequently, the addition of Rs. 2,02,135 was deleted.

3. Addition of Rs. 70,000 as unexplained investment:
The Tribunal considered the assessee's explanation of having saved Rs. 70,000 over a period of time. However, it found it difficult to believe that the entire amount was saved and kept in cash. The Tribunal agreed with the lower authorities that the amount could not have been saved in one financial year. It proportionately allocated Rs. 23,350 as unexplained investment for the relevant financial year and directed the deletion of the balance amount.

4. Charging of interest u/s 139(8)/217:
The Tribunal agreed with the assessee that interest u/s 139(8)/217 should not be charged, citing favorable decisions from various courts, including the Hon'ble Rajasthan High Court.

Conclusion:
The appeal filed by the assessee was partly allowed, with significant deletions in the additions made by the Assessing Officer and directions against the charging of interest u/s 139(8)/217.