ITA No. 91 of 2004 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 91 of 2004 Date of Decision: 6.10.2010 Sh. Tejveer Singh Walia ....Appellant. Versus Commissioner of Income Tax, Patiala ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. D.K. Goyal, Advocate and Mr. Rishabh, Advocate for the appellant. Mr. Tajender K. Joshi, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1. This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 2.12.2003 passed by the Income Tax Appellate Tribunal (hereinafter referred to as “the Tribunal”) in ITA No. 823/Chandi/99 for the assessment year 1995-96, proposing following substantial questions of law:- “i) Whether under the facts and circumstances of the case the Tribunal was justified in holding that the impugned property cannot be said to be the co- ownership property because the plot is registered in the name of one of the co-owners only and hence to ITA No. 91 of 2004 -2- be treated as an individual property of that person in whose name the plot is registered? ii) Whether under the facts and circumstances of the case the Tribunal was justified in setting aside the issue of ascertaining the cost of construction for making valuation again whereas the said directions given are against the decision of the Hon'ble Supreme Court in the case of AMLYA BALA PAL reported in 262 ITR 407. iii) (a) Whether under the facts and circumstances of the case and on a true interpretation of the provisions of Section 69, the Tribunal was justified in concurring with the findings of the authorities below in respect of the investment made by Smt. Amarjeet Kaur walia Rs.4,25,000/-, Smt. Meenu Walia Rs.1,09,500/-, Sh. Amarpreet Singh Walia Rs.1,05,000/- and Rs.1,60,000/- by the appellant he having admitted only Rs.1,64,000/- by all and treating the balance as unexplained investment of the appellant? b. Alternatively even if the Tribunal is justified in treating the said investment as unexplained whether the Tribunal was justified in not treating the said investment as unexplained in the respective hands as per claim of the various co-owners for investment in the house? iv) Whether under the facts and circumstances of the ITA No. 91 of 2004 -3- case the Hon'ble Tribunal was justified in giving a decision in advance for the amount to be considered as unexplained though having set aside the issue of ascertainment of the total unexplained investment for redoing by the Assessing Authority?” 2. Briefly stated, the facts as narrated in the appeal are that the appellant was carrying on the business of running a taxi on hire and prior to that he was doing a clerical job in LIC. The sources from the various family members were pooled together and to sustain the whole of the family after the date of the father of the assessee, a plot was purchased on 24.6.1994 in his name for Rs.1,40,625/-. The construction of the said plot was started by the appellant in the financial year 1994-95 and continued in 1995-96 and 1996-97 also. Though no books of accounts were maintained but the whole of the amount was invested by all the family members, thus, ownership of the said land and building irrespective of the fact that the land had been purchased in the individual name belonged to all the family members comprising of mother, Smt. Amarjeet Kaur Walia, Tejveer Singh Walia (appellant) and his family and Sh. Amarpreet Singh Walia (brother) and his family. A total investment of Rs.13,79,000/- was made towards the said house as against the valuation of Rs.19,78,900/- made by the Departmental Valuation Officer (DVO). The Assessing Authority vide order dated 8.12.1998 found that the investment made in the plot to the extent of Rs.1,40,625/- was liable to be added under Section 69 of the Act being unexplained investment. Besides this, the total investment in the house for the first year amounted to Rs.8,89,303/- which was accepted by the ITA No. 91 of 2004 -4- assessee. Thus, an addition of Rs.7,25,303/- was made after accepting the genuine investment made by the family members amounting to Rs.1,64,000/-. The Assessing Authority observed that the said building belonged exclusively to the appellant in his individual capacity being registered in his name. The quantum of investment given by the assessee was disbelieved and the balance amount was treated as unexplained income. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [hereinafter referred to as “the CIT(A)”] who vide order dated 5.8.1999 concurred with the findings of the Assessing Authority and dismissed the appeal. On further appeal by the assessee, the Tribunal vide order dated 2.12.2003 partly allowing the appeal remanded the case to the DVO for determination of the valuation of the construction of building made by the assessee during the year in question. However, other finding recorded by the Assessing Officer and upheld by the CIT(A) were maintained. 3. We have heard learned counsel for the parties. 4. The controversy in the present appeal can be bifurcated as under:- i) Whether reference to Departmental Valuation Officer (DVO) was legally tenable and the Tribunal had rightly remanded the case for fresh determination to the DVO. ii) The disallowances in excess of Rs.1,64,000/- on account of the alleged amount received from the mother of the assessee Smt. Amarjeet Kaur Walia, Smt. Menu Walia wife of Shri Tejveer Singh Walia, Shri Amarpreet Singh Walia ITA No. 91 of 2004 -5- (brother) and from own sources were tenable in law and could be treated to be unexplained investment of the appellant under Section 69 of the Act. 5. Adverting to the first issue, learned counsel for the parties are ad-idem that in view of decision of this Court in Income Tax Reference No. 48 of 1994, Commissioner of Income Tax v. Nabha Solvex Ltd. dated 7.7.2010, the reference to the DVO was not justified and the Tribunal was not right in remanding the case to the DVO for determination of the valuation of the construction of building made by the assessee during the year in question. 6. Now referring to the second issue, The Assessing Officer, the CIT (A) and the Tribunal have concurrently recorded that the investment of Rs.1,40,625/- (i.e. Rs.1,25,000/- towards cost of plot and Rs.15,625/- cost of stamp paper) was unexplained and had to be added to the income of the assessee. Besides this, the amount in excess of Rs.1,64,000/- paid by the assessee was also treated as unexplained investment and was held to be taxable under Section 69 of the Act. The assessee had claimed that the following contributions were made during the year for construction of showroom:- “i) contribution made by Smt. Amarjit Kaur 4,25,000 Walia (Mother) ii) contribution made by Smt. Meenu Walia 1,09,500 (Wife) iii) contribution made by Sh. Amarpreet 1,05,000 Singh (Brother) iv) investment made by the assessee himself 1,60,000 Total 7,99,500 7. The Assessing Officer, however, held that only ITA No. 91 of 2004 -6- Rs.1,64,000/- as per details given below was explained by the assessee:- “i) By mother 50,000/- ii) By brother 25,000/- iii) By wife 29,000/- iv) By self 60,000/- 8. Thus, the balance amount was treated as unexplained investment under Section 69 of the Act. However, the Assessing Officer had relied upon the report of the Valuation Officer who had assessed the cost of construction at Rs.8,89,303/- and treated the balance amount of Rs.7,25,303/- as unexplained investment under Section 69. Since, it has been held while deciding issue No.1 above, that the reference to Valuation Officer was not justified, therefore, the unexplained investment could not be taken to be Rs.7,25,303/-. The assessee had shown Rs.7,99,500/- as source of investment for the year in question out of which Rs.1,64,000/- has been held to be explained investment. Therefore, an addition of Rs.6,35,500/- only could be sustained. Thus, total addition to the extent of Rs.6,35,500/- + Rs.1,40,625/- is justified. The aforesaid findings have been upheld by the CIT(A) and the Tribunal. 9. Learned counsel for the assessee could not advance any meaningful argument to dispel the findings recorded by the Assessing Officer, upheld by the CIT(A) and affirmed by the Tribunal except that an attempt was made to reappreciate the evidence to record conclusion in favour of the assessee which is not permissible under Section 260A of the Act. The findings of fact based on record are not liable to be ITA No. 91 of 2004 -7- interfered in the present appeal. 10. In view of the above, question No. (ii) is answered in favour of the assessee. Question Nos. (i) & (iii) are answered against the assessee and in favour of the revenue. Question No. (iv) being consequential and ancillary to the aforesaid questions stands answered accordingly and the appeal is disposed of. (AJAY KUMAR MITTAL) JUDGE October 6, 2010 (ADARSH KUMAR GOEL) gbs JUDGE