Nataraj Cinema vs Commissioner of Income Tax and Another

This is an intended appeal from an order of the Income Tax Appellate Tribunal dated June 14, 2001.

The assessment year involved is 1985-86.

The first assessment was made just as two years were running out, but that is not unusual.

An appeal from the said order succeeded and the matter was remanded for a fresh assessment.

Such an assessment was made and it was again taken up to the Commissioner of Income Tax (Appeals), and the appeal succeeded.

The issue involved from the very beginning was the issue of cost of construction of the Nataraj Cinema hall at Burdwan. The assessee partnership maintained from the very beginning that their cost of construction of the building was Rs. 15,00,000 (approximately). They said that since one partner was a civil contractor himself he was able to keep the cost very low.

The Departmental valuation and other valuations also, on the other hand pointed to the cost of construction being appreciably above Rs. 30,00,000.

The Income Tax Appellate Tribunal has stated that in 1983 a three storeyed cinema hall along with plant and machinery, curtain etc., could not be constructed even by expenditure of Rs. 36,00,000.

The hall opened on February 9, 1985, and the assessee returned a loss of Rs. 1,50,000 for the assessment year 1985-86.

u/s 69B, in case the valuation return is found to be less than what is acceptable, the underestimated investment turns into assessable income which is not appropriately returned by the assessee himself.

From the second successful Departmental appeal of the assessee, the Income Tax Appellate Tribunal was approached by the Department ; it has ultimately opined that, considering both sides of the case, the estimate of the valuation of the cinema hall should be Rs. 25,00,000.

We find nothing perverse in the approach ; when parties have been fighting for a long time, the court often cuts the Gordian knot by a rough and ready via media estimate. The Tribunal has done nothing more than that. There is no perversity involved.

The question is basically a question of fact only. u/s 260A, for admission, we need not only a question of law, but a substantial one ; that is essential for entertainment of appeal and further protracting the proceedings. The proceedings have already ranged over 14 years. We are not minded to protract it any further.

The appeal is not admitted ; in consequence the order of the Income Tax Appellate Tribunal becomes confirmed and final. The text of the present order shall be communicated by the learned Registrar, original side at his convenience to respondent No. 1.

All parties and all others concerned to act on an authenticated xerox copy of this dictated order on the usual undertakings.