2024 (1) TMI 556 - HC - Income Tax

Income Tax Inclusion of Rs. 23 Crores Quashed; Reconsideration Ordered by Appellate Authority in Four Weeks.

The HC allowed the writ petition, quashing the appellate order that confirmed the inclusion of Rs. 23 Crores as income under Section 68 of the Income Tax ... Addition u/s 68 - proposal to tax the same u/s 115BBE - According to the petitioner, the sum represented a genuine unsecured loan from an entity - AO did not accept this contention because M/s.Magunta Exports had filed a return indicating nil income in the relevant assessment year - appellate authority accepted all the conclusions of the assessing officer and rejected the appeal - HELD THAT:- On examining the impugned order, we find that the appellate authority has set out the grounds raised by the appellant, the written submissions of the appellant and the inferences and conclusions drawn by the assessing officer. The appellate authority has drawn the conclusion that the inferences and findings of the assessing officer are acceptable. However, there is nothing to indicate that the appellate authority independently applied his mind. The conclusions are in the nature of ipse dixit and no supporting reasons are discernible. On this sole ground, albeit without expressing any opinion on the merits of the matter, we inclined to interfere with the appellate order. Consequently, W.P. allowed by quashing the impugned order. As a corollary, the matter is remanded for reconsideration by the appellate authority. Issues involved: The petitioner challenges the appellate order rejecting the appeal regarding the inclusion of a sum of Rs. 23 Crores as income under Section 68 of the Income Tax Act, 1961.Details of the Judgment:Issue 1: Inclusion of Rs. 23 Crores as income under Section 68 of the Income Tax ActThe petitioner filed income tax returns for the assessment year 2020 - 2021, declaring a total income of Rs. 53,10,01,450. The assessing officer included Rs. 23 Crores as income under Section 68 and proposed to tax it under Section 115BBE. The petitioner claimed the sum represented a genuine unsecured loan from M/s.Magunta Exports, Nellore. However, the assessing officer and the appellate authority did not accept this claim due to lack of evidence regarding the genuineness of the transaction and the credit-worthiness of the company. The appellate authority confirmed the addition of Rs. 23 Crores without providing supporting reasons. The court found the appellate authority did not independently apply its mind and interfered with the appellate order, quashing it and remanding the matter for reconsideration with directions to provide a reasoned order within four weeks.Conclusion:The High Court allowed the writ petition, quashed the impugned order, and remanded the matter for reconsideration by the appellate authority with directions to provide a reasoned order within a specified time frame.