SAKTHI TOURIST HOME Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an appeal filed by the assessee challenging the addition sustained by the Tribunal under s. 69B of the IT Act. Department noticed creation of asset in the form of a building constructed by the assessee. The investment accounted by the assessee for the building was only Rs. 23 lakhs and odd. However, Department got the same valued at above Rs. 49 lakhs. After giving some deductions, the AO refixed the value at Rs. 45,82,327. After taking into account the amount of investment accounted by the assessee, the AO made addition of Rs. 22,77,068 as income in the form of unexplained investment under s. 69B of the Act. However, in first appeal, the CIT(A) accepted explanation offered by the assessee and reduced the addition to Rs. 8,44,475. Even though assessee as well as Department filed separate appeals to the Tribunal against the order of CIT(A), the Tribunal dismissed both the appeals leading to finality of order of CIT(A).

(2.) EVEN though assessee has raised several questions of law, we do not think any question raised is a substantial question of law on which only appeal is maintainable under s. 260A of the IT Act. The unexplained investment is deemed income of the year in which investment is made as provided under s. 69B of the Act. The issue raised in this case only involves the actual amount of investment which is a matter of valuation. In fact it is seen that the valuation made by the Departmental valuer is substantially reduced by the CIT(A) which found acceptance by the Tribunal. We do not find we have any authority to enter into the controversy on valuation of assets which is a pure factual issue. Therefore, there is no question of law involved so far as valuation of asset is concerned, which led to specific addition reduced by the CIT (A). So far as the next aspect of the question raised i.e. assessee's request for spreading over of unexplained investment for several years, we do not think the same is permissible because s. 69B specifically states that the unexplained investment should be treated as the income of the year in which investment is made. There is nothing on record to prove the stage of construction of the building at the time of acquisition by the firm and the period during which subsequent additions to the building were made. The claim for spreading over of the investment for several years can be granted only if it is proved that the investment is made in several years. There is no such evidence in this case. Therefore, the Tribunal rightly rejected the claim of spreading over. Further, the assessee has raised this question for the first time before the Tribunal and therefore, we do not find any ground to interfere with the order in appeal on this issue also. The appeal is consequently dismissed.