Law: Income Tax Act, 1961

Section: 22

JUDGMENT P.D. Dinakaran, J.-As against the order dated February 2, 2005 in I. T. A. No. 74/Mds/94 for the assessment years 1985-86 and 1986-87 of the Income-tax Appellate Tribunal, the Revenue has preferred these appeals raising the following substantial questions of law: "1. Whether, on the facts and circumstances of the case, the Tribunal was right in not considering the ground raised by the Revenue relating to the addition of income from the house property at 100 AE Anna Nagar, Chennai ? 2. Whether, on the facts and circumstances of the case, the assessee's contention that the property at 100AE Anna Nagar, Chennai did not belong to him and the same belongs to his wife is acceptable ?" The relevant facts are as follows: The assessee filed its return of income for the assessment year 1985-86 on September 30, 1985, on a total income of Rs. 91,530. Subsequently, he filed a revised return of income on March 28, 1988, admitting a total income of Rs. 91,755. The difference being a sum of Rs. 225 between the original return and revised return represents the interest admitted under the head "Other sources". In the meanwhile, there was a search under section 132 of the Income-tax Act (hereinafter referred to as "the Act") on January 27, 1986, at the residence of the assessee and some incriminating materials in the form of papers and books were seized. Based on those documents, it was found that a site measuring one ground and 825 sq.ft. bearing D. No. AE 100 (formerly AC 100) Anna Nagar, Madras was purchased on May 1, 1981 at a cost of Rs. 45,000 from one Sri Srinivasa Raju Iyengar in the name of Smt. Manomani, the wife of the assessee, incurring a sum of Rs. 6,352 towards stamp duty and registration charges. Thus the total cost of the plot comes to Rs. 51,352. Thereafter, in March 1983, a house was constructed in the said plot with the cost of Rs. 2,04,274 inclusive of the cost of wooden almirah. The total built-in area was 1100 sq.ft. According to the Revenue, the wife of the assessee, Smt. Manomani, did not have any regular source of income and therefore the said land and building, referred to above, was considered to be that of the assessee under section 22 of the…

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