2012 (6) TMI 11 - HC - Income Tax

Legality of remit order passed by Tribunal - addition of share application money u/s 68 - assessee contended that Tribunal had sufficient material to to decide the question of addition and there was no necessity for remitting the matter before the Assessing Officer - Held that - Tribunal noticed that identity of the share holders has not been established in order to ascertain the genuineness of transactions and it being satisfied that matter needs further inquiry and decision afresh, has chosen to remand the matter to the Assessing Officer. Issues have not been closed by the Tribunal nor any of the grounds raised by the appellant has been finally determined, petitioner has still opportunity to prove his claim as is sought to be raised in the present appeal. No substantial question of law arises for consideration - Appeal dismissed.

Summary

Issues:
Appeal against Tribunal's order allowing revenue's appeal and remitting matter to Assessing Officer for fresh consideration of addition on share application money.

Analysis:
The High Court heard two appeals raising common issues and delivered a common judgment. The appeals were filed under Section 260 A of the Income Tax Act against the Tribunal's order allowing the revenue's appeal and remitting the matter back to the Assessing Officer for fresh consideration. The Assessing Officer had made additions on share application money for two companies, questioning their genuineness. The CIT (Appeal) had earlier allowed the appeal of the assessee and deleted the addition, which was then challenged by the revenue before the Tribunal.

The Tribunal observed that the identity of the share holders was not established to ascertain the genuineness of the transactions. The Assessing Officer had issued commissions for inquiries, but no confirmation of the companies' existence was found. Hence, the Tribunal remitted the matter to the Assessing Officer for a fresh examination. The appellant argued that the Tribunal could have decided the matter itself, citing relevant case laws. However, the respondent contended that the Assessing Officer had taken due care and caution in conducting inquiries.

The High Court noted that the Tribunal's remand was justified as the identity of the investing companies was not established. The Tribunal's decision to remit the matter for fresh consideration was upheld, emphasizing that all issues, including the genuineness of the transactions, needed to be re-examined by the Assessing Officer. The Court dismissed the appeal, stating that no substantial questions of law arose for consideration, and all issues remained open for the Assessing Officer to decide.

In conclusion, the High Court upheld the Tribunal's decision to remit the matter to the Assessing Officer for fresh consideration, emphasizing the need to establish the genuineness of the share transactions. The Court dismissed the appeal, stating that all issues were open for the Assessing Officer to address, and no substantial questions of law were found to be raised.