Case: Motor General Finance Ltd Vs. CIT, Delhi

In para 6 of the impugned judgment, the High Court has observed:"Pursuant to and in furtherance of the aforesaid direction, an opportunity was given to the assessee to place additional material. The assessee merely furnished the statement of the deposits made in the bank account on those dates, on which the advance amounting to Rs 50 lakhs was made to the sister concern. It, however, despite the direction did not furnish the copy of the bank statement to show as to whether there had been a credit balance or debit balance in the bank accounts on those datesIn this situation, it was observed:"If there was a debit balance, then it could safely be inferred that interest bearing overdraft facility of the bank was utilised to make those advances. But the assessee till date has not furnished any such statement. In view of this fact, the disallowance of Rs 10 lakhs is to be sustained."5. The High Court in the impugned judgment has observed that in spite of giving opportunity to the appellant, it has not filed the necessary statement before the Commissioner of Income Tax. It is primarily based on this finding of fact that the High Court dismissed the statutory appeal filed by the appellant.

Reasoning:
7. We have seen from the file that, as contended by the learned counsel, certain statements were produced before the authorities, notice of which has not been taken by the High Court. The contents of these statements would have vital importance on the ultimate decision that the High Court may have to take. Therefore, we think it appropriate that since the High Court has proceeded on an erroneous factual basis, this matter should be remanded back to the High Court to consider the material produced by the appellant which is found at pp.4 of the appeal papers and decide the case on that basis.