Law:

Section:

Section 69B of the Income-tax Act, 1961 - Undisclosed investment - Assessment year 1998-99 - Whether to invoke provisions of section 69B burden is on revenue to prove that real investment exceeds investments shown in books of account of assessee - Held, yes - Whether merely because counsel for assessee made a statement in some other proceedings in civil court that total investment in property was Rs. 13 crores and odd, it would not be sufficient material to come to conclusion that said figure represented actual investment - Held, yes - Whether where no other material was placed to prove quantum of actual investment, it could be held that revenue failed to prove its case - Held, yes FACTS The respondent-assessee was an HUF engaged in the business of development, construction, sale and leasing of flats, etc. The assessee filed its return of income. During the course of assessment proceedings, the Assessing Officer noticed that in the balance sheet and the profit and loss account for the year ending 31-3-1997 an amount was shown as closing work-in-progress of a Mussoorie project. However, the same amount did not appear as pending work-in-progress as on 1-4-1997 in the balance sheet for the period ending 31-3-1998. Nor did it appear as sales made during the year ending 31-3-1998. The assessee was required to explain as to why the sale value of the closing stock-in-progress be not treated as its undisclosed income. It was explained by the assessee that he had entered into an agreement with one 'H' Ltd. for undertaking the development of project in Mussoorie jointly. In terms of the said agreement, a private limited company was to be formed jointly by the said two concerns and the Mussoorie project was to be transferred to the new company. The Mussoorie project was accordingly transferred to the said new company for a consideration. It was stated that since the project was transferred during the previous year inadvertently, it was not reflected in the opening work-in-progress as well as closing work-in-progress and only the differential amount which was charged for job work was taken in the profit and loss account. The Assessing Officer was not convinced with the…

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