INTEGRATED DATA BASE & RESEARCH CENTRE PVT LTD vs. INCOME TAX OFFICER

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 1186/2011 . . . INTEGRATED DATA BASE and RESEARCH CENTRE PVT LTD . ..... Appellant . Through Mr. Kaanan Kapur, Adv. . versus . INCOME TAX OFFICER ..... Respondent . Through Mr. Kiran Babu, Sr. Standing Counsel, Income Tax Department. . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON?BLE MR. JUSTICE G.P.MITTAL . O R D E R . 24.10.2011 . . . This appeal under Section 260A of the Income Tax Act, 1961 is directed against the order of the Income Tax Appellate Tribunal (for short, the tribunal) dated 20th May, 2011 passed in ITA No.5211 (Del) of 2010, which relates to the assessment year 2004-05. . 2. Learned counsel for the appellant-assessee has submitted that the tribunal should have itself decided the appeal and the order of remit is uncalled for. He submits that the appellant had established identity, genuineness of the transactions and the creditworthiness of the shareholders. He relies upon decision of this Court in Vijay Power Generators Ltd. Vs. Director of Income Tax and Another [2011] 333 ITR 119 (Delhi). . 3. The reasons and the operative portion of the impugned order read as under:- . ?7. We have heard both the parties. We have gone through the assessment order as well as order passed by ld. CIT (Appeals). It is seen from the order of the ld. CIT (A) that the assessee has been pleading before him that the AO has not been co-operative. On the other hand, the AO had denied the charges levied against him in his remand report, sent to the ld. CIT (A). The ld. CIT (A) on the basis of enquiries conducted . by the Inspector and the AO as well as the copies of the bank statements obtained by the AO had concluded that the identity, the concluded that the identity, the creditworthiness and genuineness of the transactions have not been proved. The ld. CIT(A) has also held that the assessee has not been able to explain as to why and under what circumstances the investor companies are being investigated by the Govt. authorities including the Department of Company Affairs and Central Bureau of Investigation. We have also gone through the profit and loss account and the balance sheet of the assessee company as on 31st March, 2004 i.e. relevant to assessment year under consideration as also on 31st March, 2003. The assessee had shown profession fees of Rs.5,000/- and commission received at Rs.2,40,000/- and profit on sale of assets at Rs,10,055/- totaling to Rs.2,55,055/- as on 31st March, 2003. As on 31st March, 2004, the professional fee receipts are at Rs.2,28,500/- and interest from loan is Rs.39,590/- totaling to Rs.2,68,090/-. The profit before tax for assessment year 2003-04 is at Rs.13,469/- and for assessment year 2004-05 is at Rs.16,588/-. We have also gone through the balance sheets as on 31st March, 2003 and 31st March, 2004 at Rs.7,00,000/-. The issued capital as on 31st March, 2003 is at Rs.1,02,000/- and as on 31st March, 2004 is at Rs,5,27,000/-. Reserves and surpluses include share premium amount of Rs.33,00,000/-. Cash and bank balance at Rs.57,583/-; loans and advances of Rs.10,10,335/- including TDS of Rs.28,881/- and current liabilities at Rs.10,857/-. From the above facts, the financial position of the assessee can be ascertained. The assessee had issued shares at premium of Rs.900/- per share as against face value of Rs.100/-. The AO has not gone through the financial status of the assessee as to whether it can receive share premium of Rs.900/- on the basis of financial position stated as above. The share premium collected has been mainly invested in unquoted shares. The ld. AR of the assessee could not file and evidence by which the authorized capital was raised from2,00,000/- to Rs,7,00,000/- as on 31st March, 12004. The Ld. AR of the assessee also could not explain as to how share premium was collected 9 times of the face value when earning per share face value of share of Rs.100/- as on 31st March, 2004 is nominal. In view of the above facts, we feel it proper to set aside the matter to the file of the assessing officer with the direction to examine as to whether assessee can receive share premium of Rs.900/-. He will conduct inquiries from ROC in this regard. The assessing officer will provide necessary opportunity of being to the assessee. The assessee is also direct to co-operate with the assessing officer in getting the enquiries conducted. The assessing officer will decide the issue after taking account all material facts and frame assessment de novo after conducting further enquiries and examining the investor companies.? . . . 4. Having heard learned counsel for the appellant, we are not inclined to interfere with the impugned order which as noticed above is an order of remit. The tribunal has referred to the various contentions raised by the appellant, which is apparent from the earlier portion of the impugned order. However, keeping in view the facts stated and referred to in paragraph 7 and after recording reasons, the tribunal felt that the matter should be examined in depth and detail by the Assessing Officer. . The tribunal felt that aspects required factual investigation for a just and fair decision. One of the reasons given tribunal is that each share of face value of Rs.100/- had been shown as sold at a premium of Rs.900/- to two companies, namely, Right Choice Corporation Ltd. and Basant Agencies Private Ltd. We would not like to elaborate and deal with the observations, least it causes prejudice to any party. We do not think that the tribunal has made any observation, which justifies any interference by this Court. Failure to mention any fact, would have made the order to the tribunal susceptible to challenge and a detailed finding would have caused prejudice. . 5. The appeal is accordingly dismissed in limine. It is clarified that this Court has not expressed any opinion on the question of genuineness of the transactions of sale and purchase etc. It is also clarified that the order of the tribunal does not decide the lis on merits and the observations are tentative and it is open to the authorities to ascertain facts and independently apply their mind. . . . . . . . SANJIV KHANNA, J. . . . . . . . G.P. MITTAL, J. . OCTOBER 24, 2011 . NA . . . . . . . . . . . . .