- (1.) The present appeal has been filed by the appellant-department under Section 260A of Income Tax Act, 1961, against the judgment and order dated 05.12.2008 passed by Income Tax Appellate Tribunal, Lucknow in I.T.A.Nos.534 and 648/Luc/2008, for the assessment year 2005-06.
(2.) On 19.11.2009, a Coordinate Bench of this Court has admitted the appeal on the following substantial questions of law:- "1. Whether in the facts and circumstances of the case, the Income Tax appellate Tribunal erred in law in deleting the addition of Rs.42.50 lacs under the head 'undisclosed investments' in the purchase of land? 2. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal erred in law in deleting the addition of Rs.10.00 lacs made by the Assessing Officer on account of unexplained loan?"
(3.) The brief facts of the case are that the assessee is a company engaged in development of land and construction. During the assessment year under consideration which is the second year of operation, the assessee filed the loss return for Rs.1,33,575/-. However, the A.O. has completed the assessment on positive income of Rs.51,16,420/-. During the scrutiny, the A.O. found that the assessee has deposited an amount of Rs.39 lacs in the bank account of Mr. Nankau. Actually, a sum of Rs.42.5 lacs was paid to him by the assessee who in return re-sold the land to the assessee. The A.O. has treated a sum of Rs.42.5 lacs as unexplained income and made the addition in the hands of the assessee. The first appellate authority as well as the Tribunal has deleted the addition.;