2023 (12) TMI 342 - HC - Income Tax

Unexplained investments in share capital of its group companies - addition made as nothing was produced by the assessees to prove that the investments in the shares of SBQ Steels by the assessees are out of the explained investments - HELD THAT - The main reason given by the Tribunal in the orders dismissing the appeals is that nothing was produced by the assessees to prove that the investments in the shares of SBQ Steels by the assessees are out of the explained investments. The contention of the learned counsel for the assessees in this regard is that they were ready to submit the relevant documents, but on the date of hearing of the appeals, 15 other cases relating to the group were also listed and due to the same, the assessees were not able to provide the documents. In view of the submission made on the side of the assessees that they are ready to submit the relevant documents, this court deems it appropriate to remand the matter to the Assessing Officer / respondent authority for fresh consideration. The learned standing counsel appearing for the respondent has no serious objection for the same. Questions of law raised in all these appeals are left open and the matters are remanded to the respondent authority / assessing officer for fresh consideration.

Summary

Issues:
- Addition under Section 68 of the Income Tax Act, 1961
- Reasonable opportunity to substantiate source of investments
- Invocation of Section 68 despite nature of investment

T.C.A.Nos. 84 & 85 of 2023:
- Appellate Tribunal confirmed addition under Section 68 despite cash balance explanation
- Appellant denied reasonable opportunity to substantiate source of investments
- Invocation of Section 68 questioned despite nature of investment

T.C.A.No. 86 of 2023:
- Appellate Tribunal confirmed addition under Section 68 from interest received
- Appellant lacked reasonable opportunity to substantiate source of investments
- Invocation of Section 68 challenged despite nature of investment

T.C.A.No. 87 of 2023:
- Appellate Tribunal confirmed addition under Section 68 from cash balance and consultancy income
- Appellant not given opportunity to substantiate source of investments adequately
- Tribunal's order questioned for not following precedent and invoking Section 68

T.C.A.No. 89 of 2023:
- Appellate Tribunal confirmed addition under Section 68 from cash balance and consultancy income
- Appellant lacked reasonable opportunity to substantiate source of investments
- Tribunal presumed investments in wrong entity, leading to mechanical order

T.C.A.No. 90 of 2023:
- Appellate Tribunal confirmed addition under Section 68 despite investment timing discrepancy
- Appellant denied opportunity to prove no investments during the subject assessment year
- Tribunal's order criticized for not following precedent and invoking Section 68

T.C.A.No. 129 of 2023:
- Appellate Tribunal confirmed addition under Section 68 from cash balance and consultancy income
- Appellant lacked opportunity to substantiate source of investments thoroughly
- Tribunal's order not consistent with precedent, invoking Section 68 challenged

The High Court of Madras remanded all appeals to the Assessing Officer for fresh consideration. The court noted the appellants' readiness to provide relevant documents but were unable to do so due to other cases. The Tribunal's dismissal was based on lack of proof regarding investments. The court directed the Assessing Officer to issue notices for document submission within specified timelines. The matters were to be reconsidered, allowing the appellants to present their case fully. The court disposed of all Tax Case Appeals without costs.