Section 69B, read with sections 69C, 69 and 37(1), of the Income-tax Act, 1961 - Undisclosed investments (Investment on building)

IT : Where building was already sold by developer and alleged excess amount of investment on building was actually in nature of expenditure, net tax would be nil

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[2015] 55 taxmann.com 443 (Karnataka)

HIGH COURT OF KARNATAKA

Commissioner of Income-tax, Bangalore

v.

Suraj Towers, Vaishnavi Infrastructure (P.) Ltd.*

N.KUMAR AND B. MANOHAR, JJ.

IT APPEAL NO. 1098 OF 2008†

OCTOBER  13, 2014

Section 69B, read with sections 69C, 69 and 37(1), of the Income-tax Act, 1961 - Undisclosed investments (Investment on building) - Assessment year 2002-03 - Assessee-property developer filed valuation report of approved valuer in respect of construction cost of building at Rs. 1.13 crore while DVO valued same at Rs. 1.71 crore - Said building was already sold and excess amount of investment on building was actually in nature of expenditure - Whether unexplained income had to be set off against expenditure and net tax in hands of assessee would be nil - Held, yes [Para 9] [In favour of assessee]

Section 245-I, read with section 271(1)(c), of the Income-tax Act, 1961 - Settlement Commission

IT: SLP dismissed against High Court ruling that even if there was an error of law or fact in calculating penalty by Settlement Commission, discretion exercised by it requires no interference unless exercise of power made by Settlement Commission was perverse requiring interference under article 226 of Constitution

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[2015] 56 taxmann.com 14 (SC)

SUPREME COURT OF INDIA

Arjun Singh Mohan Singh (HUF)

v.

Commissioner of Income-tax-I*

ANIL R DAVE, KURIAN JOSEPH AND MRS. R. BANUMATHI, JJ.

SPECIAL LEAVE TO APPEAL (C) NO. 19468 OF 2014†

DECEMBER  4, 2014

Section 245-I, read with section 271(1)(c), of the Income-tax Act, 1961 - Settlement Commission - Order to be conclusive (Penalty orders) - Assessment years 2001-02 and 2002-03 - High Court by impugned order held that even if there was an error of law or fact in calculating penalty by Settlement Commission, discretion exercised by it requires no interference unless exercise of power made by Settlement Commission was perverse requiring interference under article 226 of Constitution - Whether Special Leave Petition filed against impugned order was to be dismissed - Held, yes [In favour of revenue]

Section 69 of the Income-tax Act, 1961 - Unexplained investments (Estimated addition)

IT : In view of failure of assessee to explain source of investment for earning certain undisclosed income, reasonable addition suggested by revenue on account of unexplained investment on estimate basis was to be confirmed

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[2014] 52 taxmann.com 112 (Andhra Pradesh and Telangana)

HIGH COURT OF TELANGANA AND ANDHRA PRADESH

Commissioner of Income-tax

v.

Jaihind Cycle Co.*

L. NARASIMHA REDDY AND CHALLA KODANDA RAM, JJ.

IT TRIBUNAL APPEAL NO. 58 OF 2001†

JULY  16, 2014

Section 69 of the Income-tax Act, 1961 - Unexplained investments (Estimated addition) - Block assessment period 1993-94 to 1997-98 - During search proceedings certain undisclosed income was found - Assessing authority computed net addition at Rs. 1.34 crore with tax liability of Rs. 80.22 lakh while Tribunal reduced tax laibility to Rs. 32 lakh - Whether in view of assessee's failure to explain source of investment for earning said income, an addition of Rs. 50 lakh as unexplained investment as suggested by revenue was to be upheld - Held, yes [Para 11] [Partly in favour of assessee]