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]