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2016 (5) TMI 577 - HC - Income TaxDisallowance under Section 36(1)(vii) - Held that - In the first round of disptue with regard to the subject income of the appellant, the fact finding Authority has come to the conclusion that the disputed amount was not actually received by the appellant, nevertheless, the learned Tribunal, whilst passing the impugned order dated 15/1/2015, has taken a view that such amount was actually received by the appellant. There is no material on record to come to such a conclusion and the finding to that effect is based on no evidence and consequently, is a perverse finding of fact. As the impugned order passed by the learned Tribunal stands vitiated on that count, the impugned order deserves to be quashed and set aside and the matter be remanded to the learned Tribunal to examine the appeal preferred by the Respondent/Revenue afresh, in accordance with law.
Issues:
1. Interpretation of Section 36(1)(vii) of the Income Tax Act, 1961. Detailed Analysis: The judgment by the Bombay High Court revolved around the interpretation of Section 36(1)(vii) of the Income Tax Act, 1961. The primary issue was whether the ITAT erred in setting aside the order of the CIT(A) while simultaneously disallowing the appellant's claim under this section. The appellant's counsel argued that the Tribunal's conclusion that the disputed amount was actually received by the appellant lacked evidence and was a perverse finding of fact. The counsel contended that the impugned order should be quashed and remanded for a fresh examination by the Tribunal. On the other hand, the respondent's counsel highlighted that the appellant had filed a miscellaneous application seeking rectification of the order, which would be re-examined by the Tribunal. The respondent's counsel also pointed out the lack of material in the impugned order to support the finding that the amount was received by the appellant. Ultimately, the High Court, without delving into the merits of the contentions, decided to quash the impugned order and remand the matter to the Tribunal for a fresh decision on the appeal preferred by the Revenue/Respondent, after hearing both parties. The High Court's judgment culminated in a detailed order. Firstly, the impugned order passed by the Income Tax Appellate Tribunal was quashed and set aside. Secondly, the Income Tax Appeals for the Assessment Years 2000-01 & 2001-02 were restored to the file of the Tribunal for further proceedings. Thirdly, the Tribunal was directed to dispose of the appeals afresh, after hearing both parties, in accordance with the law. Fourthly, all contentions of both parties on merits were left open for consideration. Lastly, the appeal was disposed of in accordance with the decision to remand the matter to the Tribunal for a fresh determination.
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