2016 (5) TMI 1174

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..... 705 of 2009 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 27.4.2009 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 560/Chd/2008, for the assessment year 2003-04. The appeal was admitted by this Court vide order dated 27.7.2010 for considering the questions proposed in para 5 of the appeal which are to the following effect:- I) Whether on the facts and in law, the Hon'ble ITAT was justified in restoring the matter to the file of the A.O. when the counsel of the assessee agreed to the addition of Rs. 1,30,00,000/- under Section 68 of the Act, on account of....

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....5/- ignoring the fact that the addition has been made by A.O. keeping in view the provisions of Section 40A(2) (a) read with Section 40A(2)(b) of the Act? 3. Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed its return of income on 30.11.2003 for the assessment year 2003-04 showing net loss of Rs. 1,76,14,565/-. The case was taken up for scrutiny. The Assessing Officer framed the assessment under Section 143(3) of the Act vide order dated 30.1.2006 (Annexure A-1) by making additions under various heads including the additions of Rs. 1.30 crore on account of unexplained credits in the capital account of partners and Rs. 6,16,645/- on account of disallowance of....

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....(IV) relating to disallowance of Rs. 1.30 crore on account of unexplained cash credits in the capital account of partners in ITA No. 705 of 2009, it was noticed by the Tribunal that there was no dispute that the return of the firm had become final as no proof of filing any appeal had been furnished before the Tribunal. Further, the books of other concerns were not available and were not furnished during the assessment proceedings. Accordingly, the Tribunal remanded the issue to the file of the Assessing Officer to verify the records of the assessee and to decide the same as per the provisions of the Act by affording an opportunity of hearing to the assessee. The assessee was granted liberty to furnish evidence, if any, to substantiate its c....

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....eas the ld. counsel for the assessee defended the impugned order. The crux of arguments advanced by the assessee is that necessary evidence was submitted during assessment proceedings and the Assessing Officer did not raise any doubt about the payment. Plea was also raised that interest was rightly paid and consequently justifiable claimed for business purposes. This plea of the assessee could not be accepted on the plea that the same is covered under Section 40A(2)(b) of the Act. On appeal, the learned first appellate authority concluded that the amount received by the appellant from Saini Car Scheme were for business purposes of the assessee. The assessee advanced a sum of Rs. 17,60,053/- as loans to employees on which no interest was cha....