1979 (1) TMI 135

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....r dues pertaining to earlier years had been debited to the profit and loss accounts and this mistake had been rectified. The ITO made the assessment on the basis of the revised return. In that assessment he noted that the assessee had completed the construction of the Cinema House, Pratap Talkies, which has been partly constructed in the year 1961-62. The assessee not having any accounts and estimate made by an Executive Engineer on behalf of the assessee not being considered acceptable, the ITO estimated the value of the total construction at Rs.1,74,000 and took 50 per cent thereof as the investment in the year. The assessee claimed that he had certain temporary loans, certain hundi loans and savings from agricultural income available for....

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....by Rs. 15,000. It was contended that the addition represented only an un-explained amount out of an estimated investment as deemed income under section 69 as against the estimated investment shown by the assessee supported by a report of an Executive Engineer. According to the assessee no penalty could be imposed on such difference of opinion about the cost of construction and also on a deemed concealment of any deemed income. In the alternative, it was submitted that if at all penalty was to be imposed it should be minimum impassable according to the law as it was in force on the date when the revised return was filed. 5. On the other hand, it was contended on behalf of the revenue, that the concealment was made in the original return i....

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.... investment precedes an enquiry into the availability of funds. On that aspect the assessment order as well as the order of the Tribunal showed that the assessee was disputing the fact that 50 per cent of the investment was made in this assessment year and was also claiming that the investment was limited to the estimate made by the Executive Engineer. It may be that the assessee's estimate was rejected but in the absence of any law requiring the assessee to maintain accounts for the investment, the fact that an estimate of investment was called for cannot by itself lead to any inference of concealment. s. 69 requires un-explained investment to be added as deemed income. But there is no obligation on the assessee to disclose such deemed inc....