2020 (2) TMI 663 - HC - Income Tax

Unexplained share application money - core issue raised by Appellant is that Appellate Authority without recording reasons to entertain additional evidence and without granting proper opportunity to Assessing Authority while relying upon additional information allowed appeal of the Assessee - HELD THAT - Plea of Appellant is fallacious, in view of the fact that no such plea was raised before Tribunal apart from fact that remand report was sought from Assessing Authority and who in its report did not object to additional information rather asked to consider at the time of final disposal which vindicates stand of the Respondent-Assessee. Revenue could be aggrieved had Appellate Authority not supplied additional evidence to Assessing Authority or some objection had been raised at that stage. Failing to object rather extending implied consent demolishes entire case of the Revenue. There is nothing in the order of Tribunal to show that Revenue raised objection of additional evidence before Tribunal. Thus, we do not find any merit in the argument of the Appellant. Questions of i) genuineness of investors who introduced share capital and premium; ii) accrued income on account of delayed completion of project by M/s Satya Developers Limited; iii) capacity of persons from whom loan was borrowed and genuineness of transactions, have been considered at length by First Appellate Authority as well Tribunal. Both the Authorities below have returned categorical findings on each issue and counsel for Revenue has failed to point out any infirmity in fact or law warranting interference of this Court.

Summary

Issues:
1. Quashing of order by Tribunal under Section 260A of IT Act
2. Assessment under Section 143(3) for the assessment year 2009-10
3. Additions made by Assessing Authority
4. Appeal before CIT(A) and deletion of additions
5. Appeal by Revenue before Tribunal and dismissal
6. Consideration of additional evidence
7. Genuineness of investors, accrued income, loan capacity, and transactions
8. Final judgment and dismissal of appeal

Analysis:

1. The Appellant, Principal Commissioner of Income Tax, filed an appeal under Section 260A of the Income Tax Act seeking to quash the order passed by the Income Tax Appellate Tribunal, which dismissed the appeal of the Appellant.

2. The Respondent, a colonizer, had an assessment framed under Section 143(3) for the assessment year 2009-10, with additions made on various counts like failure to prove identity, accrued income, and loan capacity.

3. The Respondent filed an appeal before the CIT(A), who allowed the appeal and deleted all the additions made by the Assessing Authority, based on additional information/evidence provided by the Assessee.

4. The Revenue then appealed before the Tribunal, which also dismissed the appeal, providing detailed findings on the identity, creditworthiness, and genuineness of transactions of the investing companies.

5. The Appellant contended that the additional evidence considered by the CIT(A) and Tribunal was not provided to the Assessing Authority, but the Court found no merit in this argument as the Assessing Authority did not object to the additional information.

6. After scrutinizing the record and arguments, the Court found the appeal lacking in merit and deserving dismissal, as the core issues had been thoroughly considered by the lower authorities.

7. The Court emphasized that questions regarding the genuineness of investors, accrued income, loan capacity, and transactions had been extensively addressed by the lower authorities, with no identified infirmities in their findings.

8. Consequently, the Court concluded that no substantial question of law arose for consideration, and hence, dismissed the appeal.

This detailed analysis covers the issues of quashing the Tribunal's order, assessment, additions made, appeal process, consideration of additional evidence, and the final judgment, providing a comprehensive understanding of the legal judgment.