COMMISSIONER OF INCOME TAX Vs. NARESH KHATTAR HUF

JUDGEMENT

(1.) This appeal by the Revenue under Section 260A of the Income-tax Act, 1961 (for short "the Act"), is directed against the order of the Income-tax Appellate Tribunal, New Delhi (for short "the Tribunal"), dated June 21, 2002, in I. T. A. No. 953/Delhi of 2002, pertaining to the assessment year 1998-99. The following questions, stated to be substantial questions of law, have been proposed in the appeal :

(2.) Briefly stated, the material facts leading to the appeal are :

(3.) The Assessing Officer was not convinced with the Explanationn furnished by the assessed. Inter alia, observing that at no point of time the assessed was interested in carrying out the job work for and on behalf of Avion Resorts and as per the memorandum of understanding the assessed was to develop and construct the property on their own, which was to be managed jointly, the Assessing Officer held that all the amounts spent for work-in-progress as on April 1, 1997, acquisition of land, improvement in right/title of the land and other miscellaneous expenses (duly supported by bills, etc.), totalling Rs. 2,92,79,574, were by the assessed itself, and, thereforee, the property belonged to it. After holding so, the Assessing Officer proceeded to determine the quantum of the total investment by the assessed in the said project. Though the Assessing Officer noticed that a sum of Rs. 29,27,952 was accounted for in the books of the assessed as on March 31, 1997, but in the month of May, 1997, senior counsel for the assessed had made a statement before the High Court in O. M. P. No. 13 of 1997 (proceedings arising out of the arbitration award) that the assessed had invested a sum of Rs. 13 crores in the said project. Taking the said statement as reflecting the actual amount invested by the assessed (Empire Builders) in the acquisition, development and construction of the Resort, the Assessing Officer came to the conclusion that the assessed had made substantial investment in the project from out of his undisclosed sources. He, accordingly, made an addition of Rs. 8,01,04,149 under Section 69B of the Act as investment from undisclosed sources.