2016 (6) TMI 1306 - HC - Income Tax

Allowing set off capital expenditure from the revenue income - admitting the additional ground - Held that - In the case of Commissioner of Income Tax-IV v. Shree Rama Multi Tech Ltd. reported in 2012 (12) TMI 984 - GUJARAT HIGH COURT and submitted that as the issue is already covered by these decisions, the questions raised in this appeal be answered in favour of the assessee. We are of the view that the Tribunal has not committed any error while remanding the matter back, and, we see no infirmity in the impugned order. Without adjudicating the question posed for our consideration, we confirm the order of the Tribunal remanding the matter and we make it clear that we have not expressed any opinion on the merits and it will be open for both the sides to raise their contentions before the concerned authority. It is further clarified that if the assessee raises an issue that the matter is already covered by the decisions, as above, the Assessing Officer may consider the same in accordance with law.

Summary

Issues:
Challenge to ITAT order remanding matter back to AO for Assessment Year 1994-95; Admissibility of additional grounds by ITAT; Set off of capital expenditure from revenue income.

Analysis:
1. The appeal challenged the ITAT order remanding the matter back to the Assessing Officer for the Assessment Year 1994-95. The High Court had earlier dismissed the appeal, but upon remand by the Apex Court, it was taken up for hearing.

2. The questions of law framed for consideration were related to the admissibility of additional grounds by the ITAT, including issues not pressed before the CIT (A) and requiring verification of facts. The ITAT admitted additional grounds based on the similarity of the case with a Supreme Court judgment.

3. The Tribunal's impugned order addressed various grounds raised by the appellant, including interest income, miscellaneous income, penalty, commission, and brokerage. The Tribunal dismissed certain grounds against the assessee based on previous judgments.

4. The Tribunal allowed set off of share issue expenditure against interest earned on share application money, following precedents and Supreme Court decisions. Consequently, certain grounds raised by the appellant were dismissed.

5. The appellant's counsel argued the importance of the issues raised in the appeal, while the respondent's counsel relied on previous decisions favoring the assessee. The High Court found no error in the Tribunal's decision to remand the matter back and confirmed the order without expressing an opinion on the merits.

6. The High Court disposed of the appeal, clarifying that both parties could raise their contentions before the Assessing Officer. The AO was directed to decide the matter on its merits and in accordance with prevailing laws, especially if the issue was covered by previous decisions.

This detailed analysis covers the issues raised in the legal judgment, addressing the challenge to the ITAT order, the admissibility of additional grounds, and the set off of capital expenditure from revenue income, providing a comprehensive understanding of the case.