Law:

Section:

Section 69B of the Income-tax Act, 1961 - Undisclosed investments - Assessment year 1984-85 By virtue of proviso to section 142A, said section did not apply for assessment for assessment year 1984-85 and therefore, no reliance could be placed thereupon for making addition under section 69B [In favour of assessee] During the assessment year 1984-85 assessee-company raised construction in the factory building. The Assessing Officer referred the matter to the valuation cell and by adopting cost of construction estimated by the Valuation Officer made addition under section 69B. Held that, as per proviso to section 142A, said section was not attracted to the facts of the instant case and, thus, no reliance could be placed upon that. Therefore, the reference made by the Assessing Officer to the DVO was not justified. Consequently, the addition sought to be made on the basis of report of the DVO could not legally be done. CASES REFERRED TO CIT v. Sudhish Kumar [2005] 195 CTR (Delhi) 77 : [2005] 276 ITR 563 (Delhi), CWT v. S. Venugopala Konar [1977] 109 ITR 52 (Mad.) andITO v. Kajaria Investment & Properties (P) Ltd. [2008] 218 CTR (Cal.) 380 : [2008] 6 DTR (Cal.) 218 : [2008] 297 ITR 45 (Cal.). JUDGMENT Adarsh Kumar Goel, J. : The Income-tax Appellate Tribunal, Chandigarh Bench (in short "the Tribunal") has referred for opinion of this Court the following questions of law arising out of its order dt. 26th April, 1993 in ITA No. 828/Chd/1988 relating to the asst. yr. 1984-85 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the first appellate authority deleting the addition of Rs. 4,36,780 made as income from undisclosed sources on account of difference between the cost of construction declared by the assessee and that estimated by the DVO ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the first appellate authority deleting the disallowance of interest attributable to borrowed money utilized for purchase of machinery which was not put to use during the year under consideration ?" 2. Learned counsel for the Revenue fairly…

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