ITAT Hyderabad remits appeals for fresh assessment, emphasizes verification of creditors and share applicants.

The ITAT Hyderabad remitted appeals for Assessment Years 2014-15 and 2015-16 back to the AO for fresh consideration. The AO was directed to verify the genuineness and creditworthiness of creditors and share applicants, including assessing the issue of addition related to the opening balance and set off of losses under section 115BBE in accordance with the law and CBDT Circular No.11 of 2009. The appeals were allowed for statistical purposes, emphasizing the necessity for a new assessment based on verified evidence.

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Issues Involved:
Appeals filed for Assessment year 2014-15 against the order of Ld.CIT(A) and appeal for Assessment year 2015-16.

Analysis:
1. Assessment Year 2014-15:
- The assessee declared a total income of 'Nil' but the AO added unsecured loans received from various entities totaling Rs. 9,48,38,105 under section 68 of the Act.
- Additionally, share application money of Rs. 7,50,00,000 was also brought to tax under section 68 r.w.s. 115BBE of the Act, resulting in a total addition of Rs. 16,98,38,110.
- The CIT (A) partly allowed the appeal, confirming the addition of Rs. 9,48,38,105 and disallowing Rs. 73,04,912 as interest expenditure, while allowing relief of Rs. 7.50 crores related to share application money.
- The AR argued that the unsecured loans and share application money were received from genuine parties, but the AO did not verify the information provided.
- The AR contended that a portion of the unsecured loan pertained to the opening balance and requested a remittance back to the AO for verification.
- The DR argued that the entities providing the unsecured loans and share application money were shell companies without creditworthiness, advocating for restoration of the assessment order.
- The AR cited Board Circular No.11 of 2009 to support the claim that set off of losses should be allowed for the assessment year 2014-15.

2. Assessment Year 2015-16:
- The issue was identical to that of A.Y. 2014-15, where the addition was made under section 68 r.w.s 115BBE of the I.T. Act.
- The matter was remitted back to the AO to provide an opportunity to the assessee and decide the issue afresh on merits, considering the set off losses u/s 115BBE in light of Circular No.11 of 2009.

Conclusion:
The ITAT Hyderabad remitted both appeals back to the AO for de novo consideration, directing verification of the genuineness and creditworthiness of the creditors and share applicants. The AO was instructed to consider the issue of addition concerning the opening balance and set off of losses u/s 115BBE as per the law and CBDT Circular No.11 of 2009. The appeals were allowed for statistical purposes, emphasizing the need for a fresh assessment based on verified evidence.

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