2020 (2) TMI 1236 - HC - Income Tax

Addition in relation to reduction in sales consideration - whether the Tribunal ought to have remanded the matter to the Assessing Officer to consider the issue a fresh denovo with regard to reduction in sales consideration? - HELD THAT -Tribunal has allowed the ground No.2 of the assesse s appeal so far as it relates to reduction in sales consideration subject to the directions issued in the same paragraph for necessary verification or examination of the claim of the assessee. Thus, Tribunal has remanded the matter back to the Assessing Officer, directing him to consider in detail and verify the claim of the assessee. In view of such facts, there is no infirmity in the impugned order passed by the Tribunal which calls for any interference by this Court. None of the question of law proposed by the revenue can be termed as substantial question of law. Hence, this appeal fails.

Summary

Issues:
1. Whether the Tribunal should have remanded the matter to the Assessing Officer for fresh consideration regarding reduction in sales consideration?
2. Whether the Tribunal was correct in accepting additional evidence not produced before the Assessing Officer?

Issue 1:
The controversy in this case revolves around whether the Tribunal should have remanded the matter to the Assessing Officer to consider the issue of reduction in sales consideration. The assessee revised the gross sale consideration in the return of income, citing unrecoverable amounts from debtors as the reason. The Assessing Officer rejected this claim, leading to appeals before the CIT (A) and subsequently the Tribunal. The Tribunal examined the settlement agreement and additional evidence submitted by the assessee, directing the Assessing Officer to allow the claim towards account receivables and other recoveries, subject to verification and examination. The Tribunal remanded the matter back to the Assessing Officer for detailed consideration, which the appellant contended was misinterpreted. The High Court clarified that the Tribunal had indeed remanded the matter for verification and examination, finding no infirmity in the Tribunal's order and dismissing the appeal.

Issue 2:
The second issue pertains to whether the Tribunal was correct in accepting additional evidence that was not presented before the Assessing Officer. The Tribunal considered the additional evidence submitted by the assessee, including correspondence with the purchaser company and details of subsequent recoveries. The Tribunal directed verification of these claims by the lower authorities and confirmation from the relevant companies. The Tribunal allowed the reduction in sales consideration based on the additional evidence, emphasizing the need for verification and examination. Despite the appellant's contention that the Tribunal misinterpreted the order, the High Court clarified that the Tribunal had remanded the matter for detailed consideration and verification by the Assessing Officer. The High Court upheld the Tribunal's decision, dismissing the appeal filed by the Revenue.

In conclusion, the High Court upheld the Tribunal's decision to remand the matter to the Assessing Officer for detailed consideration and verification of the reduction in sales consideration claim, based on additional evidence submitted by the assessee. The Court found no substantial question of law warranting interference and dismissed the appeal.