2016 (11) TMI 892 - HC - Income Tax

Unexplained income - Held that - Certain notings in hand. The appellant contends that one of the entries therein in the sum of ₹ 96 lacs remained to be explained and that the amount was therefore, rightly added to the assessee s income. The CIT(Appeals) upheld the assessment order. The Tribunal, however, found that certain other documents especially a balance-sheet of 31.03.2005 ought to be considered and a fresh order ought to be passed thereafter. The Tribunal noted that the balance-sheet was already a part of the record of the revenue as it pertained to the earlier assessment year. There is no ground for interfering with the discretion exercised by the Tribunal in remanding the matter. The impugned order rightly notes that the balance-sheet would be a relevant consideration and therefore, ought taken into account while considering the assessee s explanation for the said entry.

Summary

Issues:
1. Appeal against the order of the Income Tax Appellate Tribunal remanding the matter for fresh assessment.
2. Explanation required for an unexplained entry of ?96 lacs found during a search.
3. Consideration of a balance-sheet from a previous assessment year.
4. Discretion exercised by the Tribunal in remanding the matter.
5. Directions issued by the Tribunal to the Assessing Officer.
6. Applicability of a specific judgment in the assessment process.

Analysis:
The High Court addressed the appeal challenging the order of the Income Tax Appellate Tribunal, which had remanded the matter for fresh assessment regarding the Assessment Year 2007-08. The appellant argued that an unexplained entry of ?96 lacs found during a search should be considered as income, a contention upheld by the CIT(Appeals). However, the Tribunal noted the presence of a balance-sheet from a previous year and directed a fresh assessment considering this additional evidence. The High Court found no grounds to interfere with the Tribunal's discretion in remanding the matter, emphasizing the relevance of the balance-sheet in assessing the explanation for the unexplained entry.

Regarding the directions issued by the Tribunal to the Assessing Officer, the High Court clarified that the Tribunal's findings were not conclusive but rather prima facie. The Tribunal had directed the Assessing Officer to decide the issue afresh in light of the additional evidence, leaving room for further assessment based on all facts and circumstances. The Court dismissed the appellant's grievance against the directions given to the Assessing Officer, highlighting that the order did not restrict the Officer to consider only a specific judgment but required compliance with relevant legal provisions and authorities in the reassessment process.

In conclusion, the High Court dismissed the petition, affirming the Tribunal's decision to remand the matter for fresh assessment and emphasizing the Assessing Officer's discretion in considering all evidence and legal provisions, not limited to a specific judgment cited in the case.