TMI Blog1998 (8) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,20,11,231 shown in the balance-sheet under Miscellaneous Expenditure. The Assessing Officer informed the assessee-company that the said expenditure of Rs. 1,89,84,676 was not allowable as public issue expenses being of capital nature. The Assessing Officer informed about the decision of the Hon'ble Madras High Court in the case of Metro General Credits Ltd v. CIT [1996] 221 ITR 99. But the representative of the assessee-company stated during the course of assessment proceedings that the claimed expenditure could be regarded as an integral part of the profit earning process and not for acquisition of any assets or a right of permanent character. According to the said representative, the same was of a revenue nature and not of a capital nature and further distinguished the decision of the Hon'ble Madras High Court in the aforestated case. The Assessing Officer was of the opinion that the expenditure was of a capital nature and not of a revenue nature and, therefore, not an allowable deduction in computing the income of the assessee-company as the assessee-company raised more capital and incurred the expenditure in that regard and therefore the same being of an enduring advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the expenditure of Rs. 1,89,84,676 was incurred and claimed by the assessee. A paper book has also been filed containing various statements in support of the assessee's contention that the expenditure claimed was of a revenue nature and not of a capital nature. During the course of one of the hearing of this appeal the assessee's representative Shri V. Ramachandran was assisted by Shri R. P. Madhu, Chartered Accountant, who appeared before the Assessing Officer as well as before the Commissioner in the first appeal. Certain vouchers which were produced in first appeal before the Commissioner to which reference has been made in the impugned order were also shown to us to convince us that the expenditure was of a revenue nature not of a capital nature and therefore both the lower tax authorities erred in this regard. The learned departmental representative submitted that at this belated stage the assessee cannot produce evidences before this Tribunal and this Tribunal should not give any relief on that basis. He strongly pleaded for upholding the impugned order of the Commissioner agreeing with the Assessing Officer in treating the expenditure of Rs. 1,89,84,676 as capital expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares and not partly for public issue and partly for Membership drive of the health farm as contended before the Appellate Commissioner and also before us. To the whole world, the appellant-company represented and held out that the impugned expenditure was towards public issue but when it came to the Income-tax Department, it changed the stand and declared in the Statutory verified return that the impugned expenditure was not capital for public issue of shares but was revenue expenditure incurred for encouraging and inviting Membership drive of the proposed health farm. The appellant-company for obvious reasons reduced its tax liability under Income-tax Act and gained undue advantage laid a false and untrue claim that the impugned expenditure was of not a capital expenditure but of a revenue nature and an allowable item in computing the taxable profit of the appellant-company. We think the appellant-company took a chance with the revenue authorities and made such an untrue and untenable claim knowingly fully well that the impugned expenditure was not revenue expenditure but only capital expenditure incurred for the purpose of public issue of shares. In our view, the assessee has, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity was made in a haste owing to the limitation period or remand can also be justified if the first appellate authority has violated and not followed the salutary rules of natural justice. When we examine the facts of this case, we do not find either of the circumstances existing warranting a remand to the Assessing Officer as was strenuously pleaded by Shri Ramachandran who appeared for the appellant-company. 9. The Courts have also cautioned the appellate authorities for the purpose of remand by holding that remand should only be made in those cases where the original authorities have not passed orders in accordance with law but in no case remand should be made to enable an assessee to fill in the blanks or lacuna in the case which remains present. 10. It is no doubt true that this Tribunal like any other appellate authority does possess the power of remand. But to accept the plea of the assessee's counsel in this case for a remand when the case has been thoroughly examined and investigated by the Assessing Officer will be nothing but travesty of justice. 11. The Division Bench of the Patna High Court in the case of Maharani Kanak Kumari Sahiba v. CIT [1955] 28 ITR 462 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereupon the assessee's counsel made a request that the assessee should be given an opportunity to prove that in substance the donation was in cash and not in kind. Dealing with this request, the Court observed as under at p. 886 : "We are afraid we cannot permit the assessee to make out a totally new case at this belated stage which would run counter to the stand taken before the authorities below. The statement of case clearly shows that the assessee donated shares and not cash. We, therefore, cannot accede to the assessee's request to permit her to second round of litigation by remanding the case with a view to giving her an opportunity to make out a case, hitherto not pleaded, that the donation, though ex facie of shares, was in substance in cash. 13. The observations of the Gujarat High Court in the case of CIT v. Harikishan Jethalal Patel [1987] 168 ITR 472 / 33 Taxman 217 on the remand are also very important and we deem it fit to reproduce the same which are at page 480 : "In the present case also, as pointed out earlier, the Income-tax Officer never doubted the genuineness of the firm and/or the transaction. On the record there is no material whatsoever to doubt either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the parties who could lead better evidence in the Court of first instance have failed to do so." 16. From the series of principles laid down by various High Courts in the abovementioned cases discussed by us, it is crystal clear that no strong case has been made out by the assessee's counsel Shri. Ramachandran which could persuade us to remand the case to the file of the Assessing Officer for further enquiry or investigation in relation to the impugned expenditure and then to make a fresh assessment. The prayer being untenable in law and facts, is therefore, hereby rejected. We are further of the opinion that if remand at this belated stage is made accepting the plea of the assessee, then the assessee will have ample time for its disposal as contended by the learned Senior Departmental Representative, Shri Suresh, to muster or tinker with the evidence in the meantime to backup and fortify its case. Remand, in these circumstance will be prejudicial and detrimental to the interest of the revenue. For this reason also we decline the plea of the assessee's counsel for remand of the case to the Assessing Officer for further enquiry and fresh assessement. Accepting such a plea wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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