Krishan Kumar Jhamb vs Income Tax Officer

Adarsh Kumar Goel, J.—Delay condoned.

The revenue has preferred this appeal u/s 260A of the Income Tax Act against the order dated 18-1 -2008 passed by the Income Tax Appellate Tribunal, Delhi Bench-I, Delhi proposing following substantial questions of law:

(a) Whether the revenue has erred in law in relying upon a valuation report based on CPWD rates for calculating the cost of construction of property located in the State of Haryana?

(b) Whether on account of non-finalization of HPWD rates the CPWD rates would be deemed to be applicable?

(c) Whether the revenue authorities have erred in law by wrongly treating advances as Cash Credits by applying Section 68 of the Income Tax Act?

(d) Whether the revenue can be permitted to made double addition of the same item (Advances in the present case) in the assessable income of the assessee?

(e) Whether the contradictory findings of the revenue authorities can be applied to the prejudice of the appellant?

(f) Whether the revenue authorities have wrongly interpreted and applied the Civil Court Judgment?

(g) Whether the onus to disclose the source of income of the source has to be discharged by the assessee?

(h) Whether on the facts and circumstances of the case the Ld. Income Tax Appellate Tribunal was correct in law and on facts in holding that the value determined by the Departmental Valuation Officer (DVO), be adopted and ignore the valuation report of the approved valuer filed by the appellant which report was, infact considered by the Assessing Officer and adopted after making some additions, in view of the judgment Bholanath Majumdarv 77''Oreported as [1996] 2211TR 608 and other similar judgments?

(i) Whether on the facts and circumstances of the case, the Assessing Officer was correct in law in referring the matter to the Valuation Of ficer in the absence of any adverse mat erial on record even when the valuation report was filed by the assessee/appellant and adopted?

(j) Whether the order passed by the Income Tax Appellate Tribunal is perverse in facts and in law?

During the assessment for the assessment year 1991-92, the Assessing Officer did not accept the valuation of property and genuineness of the cash credits. On appeal, the CIT(A) remanded the matter for fresh assessment in the light of report of the Departmental Valuation Officer (DVO). The Assessing Officer made assessment accordingly. Difference between the value of the property declared by the assessee and the value of the property determined by the DVO was added back. Apart from this, the cash credits were treated to be the income from other sources. On appeal, part of addition was deleted to the extent explanation of assessee was found to be acceptable.

The Tribunal has affirmed the view taken by the appellate Authority.

The Tribunal considered two issues:

(i) addition on account of cost of construction and

(ii) addition on account of cash credits.

As regards the cost of construction, the Tribunal held as under:

On the other hand, it is also clear from the orders of the authorities below that the valuation report of the registered valuer suffered from grave infirmity, inasmuch as it did not take into account a number of items used by the assessee for construction of the property. In such circumstances, we do not find any reason to agree with the learned Counsel that it was defective on account of adoption of CPWD rates.

As regards the cash credits, the finding of the Tribunal is as follows:

The facts are that the assessee received the impugned amount ostensibly from six persons as a consequence of agreements for sale of shops. This fact does not stand proved when affidavits were filed from some of the persons for the reason that the persons could not be produced for authenticating their signatures and explaining the contents of the affidavits. Similarly, production of agreement to sale, incomplete and unsigned, does not lead to the inference that the monies were received in consideration of the agreement to sell. What is surprising is that these persons were not handed over the possession of the shops and even the money was not returned to them till date of hearing before us. It will be inconceivable that all the six persons, after paying substantial monies, did not turn up to take possession of shops and even did not demand the monies back from the assessee. Most of the cases relied upon by the assessee are in regard to raising of share capitals by companies, in which courts held that if the real subscriber could not be identified, the right course would have been to bring the money to tax in the hands of the persons to whom the monies belonged. In this case, the conduct of the assessee and surrounding circumstances show that the money belonged to the assessee as no benefit was passed on to the alleged intending buyers. Then, there are cases to the effect that while the assessee is required to prove the source of money, he is not required to prove the source of the source. In the instant case, source of the money has not been proved and the learned CIT(A) has not really gone into the source of the source. Then there are cases that if the creditors have been identified, the monies have been received by cheques and P.A. numbers have been furnished, the addition cannot be made merely because the persons could not be traced. In the instant case, the monies have been received in cash and not by way of cheques.

We have heard learned Counsel for the assessee and perused the impugned orders.

Questions (a), (b), (h) &. (i) cannot be held to be substantial questions of law, in view of the clear findings that the valuation of the registered value relied upon by the assessee was not correct. Question (c) also cannot be held to be substantial question of law. Finding of Tribunal in this regard is not shown to be perverse. Remaining questions are consequential.

No substantial question of law arises for consideration.

The appeal is dismissed.