COMMISSIONER OF INCOME TAX Vs. R. HANUMAIAH ASSOCIATES

JUDGEMENT

(1.) These two appeals are disposed of by a common order as they involve common questions of law and fact and have been admitted by order dated 4-12-2006 for considering the following substantial questions of law:--

(2.) We have heard the learned appearing for the appellants and the learned counsel appearing for the respondent.

(3.) The learned appearing for the appellants vehemently argued that the order passed by the Tribunal is wholly erroneous and it is passed without reference to the finding given by the Assessing Officer that the DVO had not taken the expenditure into account and the same had not been explained by producing the vouchers or books of account of the assessee and wherefore the order of the Tribunal deleting the addition of unexplained investment is liable to be set aside and he has taken us through the order passed by the DVO and the appellate authority as also the order of the Tribunal which has gone into these two appeals. The learned counsel appearing for the respondent submitted that according to the report of the DVO the cost of construction was Rs. 75,94,000 and the Tribunal has held that the tenant had made certain improvements in the property for the beneficial enjoyment of the property and even if the said addition is taken into account it would come to Rs. 17,95,000 by adding to the income declared towards construction at Rs. 56,27,477 and the Tribunal further held that the assessee had spent the amount up-to August 1996 which has not been taken into account and what is taken into account by the Assessing Officer is up-to December 1994 only and wherefore the finding given on the question of fact that having regard to the material on record, even if the contention of the revenue is accepted it would come to Rs. 75,94,000 which is nearer to valuation made by DVO and dismissed the appeal by deleting the unexplained investment. The said finding is at para 6. It is well settled that the Tribunal is the final authority on the question of finding of fact. The said finding is based upon the well founded reasons and cannot be said to be arbitrary or perverse as it is clear from the order passed by the Tribunal that they have verified the DVO report and also taken into account the amount spent up-to December, 1994 and the amount incurred to up-to August, 1996. Accordingly, we answer the substantial questions of law against the Revenue and hold that the appeals are devoid of merits and pass the following order:--