2012 (4) TMI 298 - HC - Income Tax

Remittance of matter back to original authority by Tribunal A.O. made addition of chargeable interest indicated as hire purchase financial income addition deleted by CIT Held that - Though Tribunal has not gone into the merits of the view taken by the CIT (Appeals), but at the same time no question of law arises in a matter of this nature from the remittance order of Tribunal Appeal dismissed.

Summary

Issues:
1. Interpretation of provisions of the Interest Tax Act, 1974 for the assessment year 1998-99.
2. Validity of adding an amount to chargeable interest in a hire purchase transaction.
3. Applicability of Supreme Court judgment in the context of the Sales Tax Act to the present case.
4. Tribunal's authority to remand the matter for fresh assessment.

Analysis:
1. The case involved an appeal by the Revenue against an order passed in ITA No.42/Bang/2003, where the Tribunal had set aside the appellate order of the Income Tax Commissioner and remanded the case for de novo assessment. The issue revolved around the question of chargeable interest part of the income attributable to hire purchase transactions under the provisions of the Interest Tax Act, 1974 for the assessment year 1998-99.

2. The assessee, a non-banking financial institution, had initially declared chargeable interest in a specific amount, but the assessment officer added a substantial sum as part of chargeable interest related to hire purchase financial income. The Appellate Commissioner, however, overturned this decision citing that the application of a Supreme Court judgment in the context of the Sales Tax Act was incorrect. The appellate authority allowed the appeal and set aside the assessment concerning the addition of chargeable interest linked to hire purchase finance income.

3. The Tribunal, in the appeal by the Revenue, did not delve into the merits of the case but accepted certain contentions on behalf of the assessee. Consequently, the Tribunal remitted the matter to the original authority for a fresh assessment to reconsider the relevance of the board circular and the Supreme Court judgment. The crux of the matter lay in the Tribunal's decision to remand the case for a reevaluation.

4. In the final judgment, the High Court dismissed the Revenue's appeal, stating that no question of law arose from the Tribunal's order. The Court emphasized that the Tribunal's remand for fresh assessment did not warrant legal intervention. The Court allowed the authority to proceed in accordance with the remission order of the Tribunal, thereby concluding the legal proceedings in the case.