2021 (2) TMI 549 - HC - Income Tax

Prayer for remand - Whether Tribunal was right in refusing to either go through the evidence themselves, or to remand the matter for appreciation of evidence, on the suspicion and surmise that the Appellant would fabricate evidence in the event of remand? - allowability of expenditure was for the purpose of inviting membership of health farm - HELD THAT - Before the CIT(A), for the first time, the assessee set up a case as if portion of the expenses was not relatable to public issue. The CIT(A) would have been well justified to pin down the assessee to their original claim in the return of income filed and reject their case. However, in order to ensure that the assessee gets a fare deal and the correct income needs to be taxed, the stand taken by the assessee was examined for its correctness. After elaborately considering the matter, the CIT(A) found that the assessee miserably failed to establish the tenability and truthfulness of its claim that the expenditure was revenue in nature. Once again before the Tribunal, the assessee made further attempt on the same grounds, which were considered by the Tribunal in great length and it was rejected. Tribunal rightly noted the decisions on the point that an order of remand is not for the asking and superior courts should be slow in remanding a case to the authority, unless it is shown that the case warrants reconsideration on the already available material or when important legal issue was not considered and that cannot be considered by the Court because disputed facts have to be gone into otherwise, prayer for remand should be rejected. Tribunal upon reconsideration of the factual position, found no justifiable reason to accept the prayer of the assessee to remand the matter to the Assessing Officer and also rightly observed that the assessee cannot fill up the gaps and blanks by seeking for a remand. Further, the Tribunal also agreed with the submission of the Revenue that there is a likelihood of tinkering of the evidence in the meantime and if the same is permitted, it would be prejudicial and detrimental to the interest of the Revenue. Hence. we are not persuaded by the submissions made on behalf of the assessee both on merits as well as with regard to the prayer for remand and above all, we find no question of law, much less substantial question of law arising for consideration in this appeal.

Summary

Issues Involved:
1. Consideration of the paper book filed by the appellant.
2. Refusal to remand the matter for appreciation of evidence.
3. Analysis of expenditure for inviting membership of health farm.
4. Treatment of expenditure incurred on promoting membership drive for health farms.

Detailed Analysis:

1. Consideration of the Paper Book Filed by the Appellant:
The appellant/assessee argued that the Tribunal decided the issue without considering the paper book filed, which had been acknowledged as produced before the lower authority. The Tribunal, however, dismissed the appeal without examining the evidence in the paper book, leading to the appellant's contention that the matter should be remanded for fresh consideration.

2. Refusal to Remand the Matter for Appreciation of Evidence:
The Tribunal refused to remand the matter on the suspicion that the appellant might fabricate evidence if given another opportunity. The Tribunal noted that the appellant had failed to establish the tenability and truthfulness of its claim that the expenditure was revenue in nature. The Tribunal also highlighted that remand orders should only be passed when original authorities have not passed orders in accordance with law, not to allow an assessee to fill in gaps or lacunae in their case.

3. Analysis of Expenditure for Inviting Membership of Health Farm:
The appellant contended that part of the expenditure was incurred for inviting membership to a proposed health farm. However, the Tribunal found that the entire expenditure was certified by the In-house Finance and Accounts Department and approved by the Board of Directors as public issue expenditure. The Tribunal concluded that the expenditure was for the public issue of shares and not partly for the membership drive, as claimed by the appellant.

4. Treatment of Expenditure Incurred on Promoting Membership Drive for Health Farms:
The Tribunal and the lower authorities held that the expenditure incurred for the public issue had an enduring effect and should be treated as capital expenditure. The appellant argued that there was uncertainty in the legal position at the relevant time, citing the decision in Brooke Bond India Ltd. vs. CIT. However, the Tribunal and CIT(A) found that the appellant's claim was an afterthought, as no membership subscription was collected during the accounting year when the membership drive supposedly took place.

Conclusion:
The Tribunal and the lower authorities thoroughly examined the appellant's claims and found no substantial question of law for reconsideration. The appeal was dismissed, and the prayer for remand was rejected, as the Tribunal was convinced that the appellant had not established the tenability and truthfulness of its claim. The Tribunal also agreed with the Revenue's argument that remanding the matter could lead to potential tampering with evidence, which would be prejudicial to the interest of the Revenue. Consequently, the appeal was dismissed, and the connected miscellaneous petition was closed.