2014 (7) TMI 51 - HC - Income Tax

Additions made in respect of OTS collection and revenue recovery collection - Accrual of income - Tribunal remanded the matter for re adjudication - Assessee contended that the issue is covered in their favor by virtue of the decision in Harayana Financial Corporation 2011 (7) TMI 693 - Punjab and Haryana High Court - Held that - Actually the Tribunal has not rendered finding in view of non-availability of materials before it and the assessing authority has been directed to re do the matter thus, there was no reason to consider the matter - when the matter is re-done pursuant to the remand, the authority will also consider the decision in CIT v. Harayana Financial Corporation 2011 (7) TMI 693 - Punjab and Haryana High Court .

Summary

Issues:
1. Assessment of total income by assessing officer
2. Appeal filed by the appellant before the Commissioner
3. Tribunal remanding the matter back for consideration
4. Additions made in respect of OTS collection and revenue recovery collection
5. Examination of submissions made by the assessee by tax authorities
6. Consideration of explanations of the assessee by assessing officer
7. Fresh examination of the issue by the assessing officer
8. Application of relevant legal precedents in the case

Analysis:
The appellant, Kerala Financial Corporation, filed an appeal under Section 260A of the Income Tax Act challenging the assessment of total income by the assessing officer for the assessment year 2008-2009, which resulted in a substantial increase from the declared loss. The Commissioner granted partial relief upon appeal by the appellant, leading to further appeal by the appellant due to the confirmed additions. The Tribunal remanded the matter back for consideration, specifically focusing on the additions made in relation to OTS collection and revenue recovery collection. The Tribunal highlighted that the tax authorities had not adequately examined the submissions made by the assessee, emphasizing the need for the assessing officer to consider the explanations provided by the appellant regarding the nature of receipts under scrutiny.

The Tribunal directed the assessing officer to re-examine the issue, taking into account the terms and conditions related to the concerned borrowers and the Recovery policy 2007-08 provided by the assessee. The Tribunal emphasized the importance of assessing the taxability of receipts based on specific circumstances and documentation, which the assessing officer had failed to do previously. The Tribunal set aside the order of the Commissioner and instructed a fresh examination of the issue by the assessing officer to make an appropriate decision in accordance with the law.

During the hearing, the appellant's counsel referenced a relevant legal precedent, Commissioner of Income Tax v. Haryana Financial Corporation, to support the appellant's position. The Court noted that the Tribunal had not rendered a finding due to the lack of materials before it, leading to the direction for the assessing authority to re-examine the matter. The Court disposed of the appeal, clarifying that upon re-examination, the assessing authority should also consider the legal precedent cited by the appellant's counsel.