TaxTMI 
TaxTMI 
2010 (4) TMI 457
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....upported the explanation and discharged the onus cast on him under section 69 of the Income-tax Act, 1961 ? 2. Whether the Appellate Tribunal was right in law in upholding the addition of the amount being the appellant's son's earnings confirmed by him in a declaration before the Assessing Officer, as the appellant's income ? 3. Whether the Appellate Tribunal was right in law in sustaining the entire addition as unexplained in the hands of the appellant disregarding the fact that the appellant and the wife are joint owners of the property ? T. C. (A) No. 825 of 2004 "Whether on the facts and circumstances of the case, the Income- tax Appellate Tribunal was right in upholding the levy of penalty under section 27(1)(c) of the Income-tax Act, 1961 ?" 4. The brief facts arising out of the case are as under : T. C. (A) No. 824 of 2004 5. The appellant/assessee is an individual. He was working as administrative hand in various cine production units. The relevant assessment year is 1996-97. The corresponding accounting year ended on March 31, 1996. He is the owner of the house property situated at 27-H, Puram Prakasam Road, Balaji Nagar, Royapettah, Chennai-600014. Th....
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.... Tribunal is wrong, illegal and without basis and justification. He further submitted that the Tribunal erred in confirming the addition of Rs. 2,64,068 as "unexplained investment". He further submitted that the Tribunal ought to have considered the explanation offered by the assessee that he had purchased a house out of his own savings, contribu- tion made by his son as well as from the sale of his wife's jewellery. He further submitted that the property was purchased in the joint names by sale deed dated August 16, 1995. Even in the application in Form 34A, it was stated that the property was owned by the husband/assessee as well as the wife of the assessee and all the authorities have not considered the same. Therefore, the order passed by the authorities below are not in conformity with law and the same has to be set aside. 7. The learned standing counsel appearing for the Revenue submitted that the Tribunal has considered all the facts and circumstances of the case and correctly confirmed the addition of Rs. 2,64,068 as "unexplained investment", which is based on valid materials and evidence and the same has to be confirmed. 8. Heard the learned counsel appearing on eith....
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....e was confirmed under the head " Income under other sources" . In respect of the said amount, the assessee gave explanation that he had saved a sum of Rs.57,600 out of his salary income, the savings of his son at Rs. 1,50,750 and also from sale of the wife' s jewellery a sum of Rs. 70,000. In respect of the saving, it was contended that the assessee was in charge of the administration unit in various cine productions. The salary of the assessee was Rs. 2,500 to Rs. 4,000 per month. Out of the said sum, he saved 30 per cent. of the salary. After taking into consideration the age and also the fact that he was in charge of the various cine production units, he would have certainly saved money out of his salary income. Therefore, the explanation offered that the assessee saved a sum of Rs. 57,600 and the same was used for the purpose of investment, is believable and therefore, the Tribunal ought to have accepted the same. In respect of the contribution made by the son, it is stated that he was earning Rs. 1,000 to 3,000 per month from 1988-89 to 1993-94 and has also filed confirmation letter saying that he saved Rs. 1,50,750 from the aforesaid period and the same was given to his fathe....
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.... source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. The question whether the source of the investment should be treated as income or not under section 69 has to be considered in the light of the facts of each case. In other words, a discretion has been conferred on the Income-tax Officer under section 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case." 12. After taking into consideration the principles enunciated in the above judgment, we are of the view that the Tribunal ought to have accepted the explanation offered by the appellant/assessee for the sources of income. If the explanation is unreasonable regarding investment, the addition can be made. In the present case, the explanation offered by the assessee is reasonable and also believable and further inquiry initiated only by the Revenue because the assessee had applied for tax clearance certificate under section 230A of the Act. Further, it is s....
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....ven in the quantum appeal." 14. Aggrieved by that, the assessee has filed an appeal before the Appellate Tribunal. The Tribunal had dismissed the appeal and confirmed the order of the Commissioner of Income-tax (Appeals). Hence, the appellant/ assessee has filed the present tax case appeal. 15. The learned counsel appearing for the appellant/assessee submitted that the order passed by the Tribunal is illegal, wrong and without basis and justification. He further submitted that the Tribunal has erred in confirming the levy of penalty. The authorities below ought to have considered the explanation offered by the assessee and mere rejection of the explanation will not be sufficient to levy penalty. The Tribunal had not considered the relevant materials and hence, the Tribunal ought to have cancelled the penalty and the order passed by the Tribunal is not in accordance with law and the same has to be set aside. 16. The learned counsel appearing for the Revenue submitted that the Tribunal has considered all the facts and circumstances of the case and correctly confirmed the penalty levied under section 271(1)(c) of the Act. He further submitted that enough opportunity was given to....