2008 (12) TMI 22 - HC - Income Tax

Whether the ITAT was justified in law in remanding the case to AO when the matter has been examined on merits by CIT(A) since, Commissioner of Income Tax (A) has examined the question of identity, credit worthiness and genuineness of each of the share holders, Tribunal was not justified in coming to the conclusion that the CIT(A) had not considered the matter in the right perspective question is decided in favour of the assessee and set aside the order passed by the Tribunal.

Summary

The High Court of Delhi, with Hon'ble Mr. Justice Badar Durrez Ahmed and Hon'ble Mr. Justice Rajiv Shakdher presiding, considered a substantial question of law regarding whether the Income Tax Appellate Tribunal was justified in remanding a case back to the Assessing Officer after examination by the Commissioner of Income Tax (Appeals). The Tribunal had set aside the order of the Commissioner of Income Tax (A) and directed the Assessing Officer to re-examine the case, citing the need for more rigorous proof in cases involving cash or demand drafts. However, the High Court found that the Commissioner of Income Tax (A) had thoroughly examined the identity, creditworthiness, and genuineness of the shareholders, as evidenced in the appeal papers. The High Court also referenced a Supreme Court case, CIT vs. Lovely Exports Pvt Ltd, which supported the Commissioner's findings. Ultimately, the High Court ruled in favor of the assessee, concluding that the Tribunal's decision was unjustified and setting aside their order. The appeal was allowed with no order as to costs.