Section 68 of the Income tax Act, 1961 — Cash Credit — Matter remitted back to the Assessing Authority for the limited purpose of holding enquiry on the issue of additions made under section 68 in the present case as the appellate authorities just glossed over and mechanically affirmed the findings of Assessing Authority.  [2020] 53 ITCD 15 (MAD)
Facts: Being aggrieved of the order of Tribunal, assessee went on appeal before High Court and raised the question of law that "Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the sum of Rs. 4,10,000/- being loan from its Managing Director, is 'unexplained cash credit' assessable to tax as income of the appellate company under Section 68 of the Income Tax Act 1961? and Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in not accepting the evidence by way of confirmatory letters and sworn affidavits of its Managing Director and his creditors and treating the sum of Rs. 4,10,000/- as unexplained and as the appellant company's income?
Held, that the affirmation of findings of the Assessing Authority by the Appellate authorities in the present case without undertaking similar exercise also cannot be sustained. They just glossed over and mechanically affirmed the findings of Assessing Authority. Therefore, we are inclined to remit the case back to the Assessing Authority for the limited purpose of holding enquiry on the issue of additions made under Section 68 in the present case. We allow this Appeal filed by Assessee only for this limited purpose and remand the case back to the Assessing Authority without answering the Substantial Questions of Law at this stage and grant six months time to the Assessing authority to complete the said exercise. The Assessing authority shall summons all the three concerned persons above and after proper examination of such witnesses and then cross examination and after weighing such evidence, shall arrive at fresh findings on the said issue, within a period of six months. With these observations, this Tax Case Appeal is disposed of.