Law:

Section:

Section 69C of the Income-tax Act, 1961 - Unexplained expenditure - Assessment years 1995-96 and 1996-97 - Assessee had constructed a commercial complex and declared cost of construction of same at certain amount - Valuation of property was referred to DVO who worked out cost of construction at higher amount - Assessing Officer treated difference as undisclosed income of assessee and made addition accordingly - On appeal, Tribunal deleted addition holding that tenant had made certain improvements in property for beneficial enjoyment of property and if said addition was taken into account, cost of construction would be nearer to that determined by DVO - Whether since finding of Tribunal was based upon well-founded reasons, no substantial question of law did arise from Tribunal's order - Held, yes [In favour of assessee] FACTS The assessee, derived income from house property and other sources. A survey was conducted in the premises of the assessee and it was found that the assessee had not filed original return of income. For a commercial complex constructed by assessee, a DVO was appointed and a difference appeared between the cost disclosed by the assessee and that reached by the DVO. The Assessing Officer treated the difference as undisclosed income of the assessee and added the same to its income. On appeal, the Commissioner (Appeals) upheld the order of the Assessing Officer. On second appeal, the Tribunal deleted the addition made by the Assessing Officer in view of fact that the addition made towards the unexplained expenditure had been satisfactorily explained by the assessee and the DVO had worked out the cost of construction of the building without including the various expenses incurred towards cost of land, furniture, interest on borrowed capital and work carried out by the tenant like false ceiling, aluminium partitions, internal furnishings, carpet, ceramic tiles flooring polished granite, etc., and recorded a perverse finding. On revenue's appeal : HELD According to the report of the DVO the cost of construction was Rs. 75,94,000. The Tribunal had held that the tenant had made certain improvements in the property for the beneficial enjoyment of the…

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