Appeal remanded for thorough examination of payment date and company incorporation, interest levy under section 234(B) reconsidered.

The Tribunal remanded the matter to the AO for thorough examination as there was confusion regarding the payment date and company incorporation. The appeal was allowed for statistical purposes, emphasizing the importance of verifying the payment source and the company's involvement without prejudice. The AO was directed to re-examine the issue and levy of interest under section 234(B) was also remanded in line with the main issue outcome.

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Issues Involved:
Appeal against CIT(A) order for AY 2007-08, Addition of Rs. 10 lakhs made by AO on payment to a third party by cheque, Date of payment vs. incorporation of assessee company, Verification of payment source, Restoration of matter to AO for examination, Levy of interest u/s 234(B).

Analysis:
1. The appeal was filed against the CIT(A) order for the assessment year 2007-08. The assessee did not press legal grounds 1 to 5, focusing on ground no. 6 concerning the addition of Rs. 10 lakhs made by the AO for a payment to a third party by cheque. The main contention was that the payment was made before the incorporation of the assessee company, thus the company should not be held responsible for the payment.

2. The assessee argued that the CIT(A) erred in upholding the addition without considering the submissions and evidence provided. It was emphasized that the alleged payment was made before the company's incorporation date, and the authorities' observations were based on incorrect assumptions. The assessee contended that proper explanations and evidence were submitted to justify that the payment was made by another entity, not the assessee company.

3. The Departmental Representative supported the lower authorities' orders, stating that the addition was based on available evidence. However, acknowledging the payment date and company incorporation date discrepancy, they agreed to the matter being sent back to the AO for verification. The assessee reiterated that the payment was made by a different entity and was related to property purchase.

4. The Tribunal noted the confusion regarding the payment date and company incorporation. It was established that the company was incorporated on 5.12.2006, while the payment of Rs. 10 lakhs was made on 23.10.2006. The issue remained whether the payment was made by the assessee company or another entity. Consequently, the matter was remanded to the AO for thorough examination based on the evidence provided by the assessee.

5. The Tribunal directed the AO to re-examine the issue without being influenced by previous orders, allowing the assessee a fair opportunity to present their case. The decision on this appeal was deemed to be for statistical purposes only, with related grounds also allowed accordingly. The matter of interest levy under section 234(B) was also remanded to the AO in line with the outcome of the main issue.

6. In conclusion, the appeal of the assessee was deemed allowed for statistical purposes, emphasizing the need for a detailed verification of the payment source and the company's involvement, ensuring a fair assessment without prejudice.

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