2012 (5) TMI 41 - HC - Income Tax

Reassessment proceedings after information received from Director of Investigation regarding bogus/accommodation entries - question arose whether the share application money received was a genuine transaction - Held that - Assessee s reliance on the judgment of Hon‟ble Supreme Court in the case of CIT Vs. Lovely Exports Pvt. Ltd.(2008 (1) TMI 575 - SUPREME COURT OF INDIA)is not applicable to this case as summons issued by the AO could not be served in the address of such share applicants by the postal authorities as none of them was found in the said address, thus it cannot be said that the AO has not brought on record any evidence to show that applicants were mere paper entities - it is also to be noted that share were not allotted to these parties in the immediate future - the orders of the authorities below are required to be set aside on the impugned issues and the matter remitted back to the file of the Assessing Officer for re-adjudicating -the Assessing Officer should pass a fresh order as per law after giving the assessee adequate opportunity of being heard.

Summary

Issues:
Delay in refiling appeals, validity of share application money received by the appellant, onus of proof, necessity of remand order, applicability of legal precedents, substantial question of law.

Delay in Refiling Appeals:
The judgment addresses an application for condonation of delay in refiling the appeals, where the respondent waived the right to file a reply. The delay of 50 days was attributed to the clerk misplacing the file, leading to the delay being condoned.

Validity of Share Application Money:
The appeals under Section 260A of the Income Tax Act, 1961 challenge a common order regarding share application money received by the appellant from various companies in different assessment years. The authenticity of these transactions was in question, with discrepancies in the amounts received as share application money.

Onus of Proof:
The counsel for the appellant relied on legal precedents to argue that the onus of proof lay on the revenue regarding the share application money. The Tribunal's order of remit was deemed necessary to delve deeper into the authenticity of the transactions, as merely referencing bank account entries was considered insufficient.

Necessity of Remand Order:
The Tribunal's order of remit was based on the need for a detailed inquiry into the share application money transactions. The judgment highlighted the Tribunal's reasoning for remitting the matter back to the Assessing Officer for re-adjudication, emphasizing the importance of a thorough examination of the facts and circumstances.

Applicability of Legal Precedents:
The judgment discussed the applicability of legal precedents such as the decision in Lovely Exports Pvt. Ltd. case and the relevance of different legal judgments in determining the validity of the share application money transactions. The court analyzed the facts of the present case in comparison to previous rulings to ascertain the appropriate legal principles to be applied.

Substantial Question of Law:
After considering the contentions raised by both parties and reviewing the facts and circumstances of the case, the court concluded that no substantial question of law arose in the appeals. The judgment dismissed the appeals, highlighting the absence of any legal propositions or ratios that contradicted the Tribunal's decision to remand the matter for further inquiry.