9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 322 - HC - Income TaxExemption u/s 10(38) - no material on record to establish the genuineness of the purchase of shares - penny stock purchases - Role of the assessee in promoting a company, the relation of the assessee with that of the promoter and the role of inflating of prices, etc. - Tribunal remitting the issue back to the file of the Assessing Officer by quoting the decision in the case of Kanhaiyal Sons (HUF) 2019 (2) TMI 1640 - ITAT CHENNAI wherein the onus has been shifted to the Revenue with a direction that the Assessing Officer is to bring on record the role of the assessee in promoting the company and the relation of the assessee if any with that of the promoters and role of inflating of prices etc., which exercise had already been done by the Assessing Officer and the SEBI HELD THAT - Identical issue was considered by this Court in several other matters where the Tribunal followed the said decision and the Court allowed the appeal filed by the Revenue, which judgment had become final. One such decision is in the case of CIT Vs. Manish D.Jain (HUF) 2020 (12) TMI 740 - MADRAS HIGH COURT to which, one of us (TSSJ) was a party. The above substantial question of law raised in this appeal is identical to that of the question raised in the said case. - The issue has already been decided in favor of revenue by this HC. Since the above legal position fully covers the issue in the case on hand, no useful purpose will be served in ordering notice to the respondent and more particularly when the above legal position attained finality and the assessee therein or any other assessee, whose case was dealt with in similar matter had filed any appeal. - Order of ITAT set aside and order of CIT(A) restored - Decided in favour of revenue.
Issues Involved:
1. Validity of the Tribunal's power to remand the case. 2. Justification for the Tribunal's remand of the case to the Assessing Officer. 3. Examination of the factual findings by the Assessing Officer and CIT(A). 4. Legal precedents and principles regarding remand and burden of proof under Section 68 of the Income Tax Act, 1961. Issue-wise Detailed Analysis: 1. Validity of the Tribunal's Power to Remand the Case: The Tribunal has the power to remand a case while exercising its jurisdiction under Section 254 of the Income Tax Act, 1961. This power was upheld by the Hon'ble Supreme Court in the cases of Hukumchand Mills Ltd. Vs. CIT and Martin Burn Ltd. Vs. CIT. However, the power of remand must be exercised judiciously and not in a routine manner. The Tribunal should provide clear reasons for remanding a case, especially when no new material facts are presented. 2. Justification for the Tribunal's Remand of the Case to the Assessing Officer: The Tribunal remanded the case to the Assessing Officer by relying on its earlier decision in Kanhaiyalal & Sons (HUF) Vs. ITO. The Revenue argued that the Tribunal's order was perverse as the Assessing Officer had already conducted a detailed investigation. The High Court found that the Tribunal did not interfere with the factual findings of the Assessing Officer and CIT(A). The Tribunal should have recorded reasons for remanding the case and should have interfered with the findings only if there was an error. The High Court held that the Tribunal's remand was unjustified, devoid of reasons, and unsustainable in law. 3. Examination of the Factual Findings by the Assessing Officer and CIT(A): The Assessing Officer and CIT(A) conducted a detailed examination of the assessee's transactions. It was found that the assessee purchased shares through off-market transactions and sold them at artificially inflated prices. The transactions were deemed to be engineered to generate artificial long-term capital gains. The assessee failed to provide satisfactory evidence to prove the genuineness of the transactions. The Assessing Officer added the unexplained cash credits to the assessee's income under Section 68 of the Act. The CIT(A) upheld the Assessing Officer's findings, noting that the transactions were sham and the assessee did not discharge the burden of proof. 4. Legal Precedents and Principles Regarding Remand and Burden of Proof Under Section 68: The High Court referred to several legal precedents to establish the principles governing remand and the burden of proof under Section 68. The Supreme Court in Sumati Dayal Vs. CIT and NRA Iron & Steel Private Limited emphasized that the initial onus is on the assessee to prove the genuineness of the transaction, identity of the creditors, and creditworthiness. If the assessee fails to provide satisfactory evidence, the Assessing Officer can treat the credits as income. The High Court also referred to cases where the Tribunal's power to remand was questioned, noting that remand should be based on judicial principles and not exercised routinely. Conclusion: The High Court allowed the Revenue's appeal, set aside the Tribunal's order, and restored the order of the CIT(A). The substantial question of law was answered in favor of the Revenue. The Tribunal's remand was deemed unjustified as it failed to provide reasons and did not interfere with the factual findings of the lower authorities. The High Court emphasized the importance of judicial principles in exercising the power of remand and the burden of proof under Section 68.
|
