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Whether the Tribunal was correct in annulling the reassessment made protectively under s. 147 for the asst. yrs. 1996-97 and 1997-98 by holding them as infructuous without going into the merits of the case when the issues with reference to unexplained cash credits of Rs. 50 Lakhs and Rs. 65,10,000 have been found to be unexplained ?

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Sec. 68 & 158BA of Income-tax Act, 1961— Cash credit — Tribunal was correct in annulling the reassessment made protectively under s. 147 by holding them as infructuous without going into the merits of the case when the issues with reference to unexplained cash credits of Rs. 50 Lakhs and Rs. 65,10,000 have been found to be unexplained.

Facts: Whether Tribunal was correct in annulling the reassessment made protectively under s. 147 for the asst. yrs. 1996-97 and 1997-98 by holding them as infructuous without going into the merits of the case when the issues with reference to unexplained cash credits of Rs. 50 Lakhs and Rs. 65,10,000 have been found to be unexplained ?

Held, that it was found that Tribunal has not decided the issue on merits and ought to have adjudicated the issue with regard to unexplained credits to the tune of Rs. 50,00,000 and Rs. 65,10,000. The Tribunal has held that orders of reassessment have been rendered infructuous. The issue with regard to unexplained credits to the tune of Rs. 50,00,000 and Rs. 65,10,000 needs to be adjudicated. The Tribunal erred in not adjudicating the issues on merits and therefore, we answer the first substantial question of law in favour of the revenue. In the result, the impugned order passed by Tribunal is hereby quashed and the matter is remitted to CIT(A) to determine the issue afresh with regard to the unexplained cash credits to the tune of Rs. 50,00,000 and Rs. 65,10,000. - CIT V/s H.E. PANDURANGA - [2020] 29 ITCD Online 016 (KARN)