Appeal Partly Allowed: Deletions on Income, Sustained on Unexplained Investment. Order Pronounced 15/01/2018.

The appeal was partly allowed, with deletions of the additions on account of income from house property and commission and brokerage. However, the addition on account of unexplained investment in building construction was sustained. The order was pronounced on 15/01/2018.

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Issues Involved:
1. Proper opportunity of hearing.
2. Addition of Rs. 46,200 on account of income from house property.
3. Addition of Rs. 1,19,730 on account of commission and brokerage.
4. Addition of Rs. 1,14,75,042 on account of unexplained investment in building construction.

Issue-wise Detailed Analysis:

1. Proper Opportunity of Hearing:
- The first ground of appeal, which contended that proper opportunity of hearing was not provided, was not pressed during the course of hearing and hence, dismissed as not pressed.

2. Addition of Rs. 46,200 on Account of Income from House Property:
- The assessee declared gross rental income of Rs. 84,000 and after deduction u/s 24(a), offered net income of Rs. 58,800. The AO estimated the rental income at Rs. 1,50,000 and after deduction, determined net rental income at Rs. 1,05,000, making an addition of Rs. 46,200.
- The CIT(A) confirmed the addition as the assessee did not provide evidence against the AO's estimation.
- The Tribunal found no basis or evidence on record for the AO's estimation, deemed it adhoc, and deleted the addition, allowing the ground of appeal.

3. Addition of Rs. 1,19,730 on Account of Commission and Brokerage:
- The assessee declared income from job work at Rs. 1,30,270, but the AO estimated it at Rs. 2,50,000, resulting in an addition of Rs. 1,19,730. The CIT(A) upheld the AO's estimation due to lack of details from the assessee.
- The Tribunal noted the absence of evidence for the AO's estimation, deemed it adhoc, and deleted the addition, allowing the ground of appeal.

4. Addition of Rs. 1,14,75,042 on Account of Unexplained Investment in Building Construction:
- The assessee did not dispute the quantum of investment estimated by the Valuation Officer but contested the timing and source of the investment.
- The AO initiated proceedings u/s 147 based on information about investments in land and building construction. The Valuation Officer estimated the investment in the building at Rs. 1,14,75,042 for FY 2006-07. The assessee did not respond to the valuation report.
- The AO concluded the investment was made in FY 2006-07 based on the assessee's statement of affairs and field enquiry.
- The CIT(A) upheld the AO's findings, noting the lack of cooperation from the assessee and the absence of any explanation or objection to the valuation report.
- The Tribunal examined the agreement to sell and the Additional Civil Judge's order. It found no evidence of construction during FY 2006-07 and noted that the assessee did not contest the valuation report. The Tribunal concluded that the assessee failed to explain the source of investment and sustained the addition, dismissing the ground of appeal.

Conclusion:
- The appeal was partly allowed, with deletions of the additions on account of income from house property and commission and brokerage, but sustaining the addition on account of unexplained investment in building construction. The order was pronounced in the open court on 15/01/2018.

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