TaxTMI 
TaxTMI 
2016 (11) TMI 531
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....tion. The first round of litigation emanated from the assessment order dated 28.03.2001 made u/s. 143(3) of the Act wherein the assessment was completed by making following additions to the returned loss of Rs. 4,15,862/-. (i) Unexplained cash credits Rs. 1,24,29,697/- (ii) Interest Exp. On unexplained cash credit Rs. 22,37,344/- (iii) Interest Expenses Rs. 13,21,785/- (iv) Unexplained cash credit Rs. 2,61,08,186/- 4. The litigation travelled up to the Tribunal and the Tribunal vide order dated 23.12.2009 in ITA Nos. 730 & 841/Ahd/2005 had given part relief to the assessee. 5. Insofar as the addition of Rs. 2,61,08,186/- is concerned, the ld. CIT(A) had confirmed the addition of Rs. 1,49,71,718/- and the Tribunal had set aside the issue to the files of the A.O. for deciding afresh as per the directions. The relevant finding of the Tribunal reads as under:- 10. We have considered the rival submissions and perused the material on record. In our considered view the assessee has made out a prima facie case that money actually does not belong to him but belong to members but this does not really discharge the onus cast upon him to explain deposits/loans in reject of wh....
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....s/unsecured loan which are treated as explained on the basis of admission by the depositors and existence of depositors. 12. In respect of source of money not found explained in the hands of the depositor then department is free to take action in his hands. 13. Thus, we set aside the two appeals and restore the matter to the file of Assessing Officer for deciding afresh as per our direction above and as per law. 14. In the result, the appeal of assessee and that of Revenue both are allowed for statistical purposes. 6. In pursuance to the directions of the Tribunal, the A.O. completed the assessment and computed the assessed income as follows:- Income as per statement of income Rs. -4,15,862 Add: Unexplained cash credits as discussed in Para no 5 Rs. 3,69,500 2, Interest expenditure on unexplained cash credits as discussed in Para no 6 Rs. 66,510 3. Interest expenses as discussed in Para no 7 Rs. 34,92,619 4. Unexplained cash credits as discussed in Para no 8 Rs. 61,29.000 Total Income Rs. 96,41,767 7. It is the say of the ld. counsel that while completing the assessment, the A.O. had made two additions which were not there in the first assessment or....
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.... order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessee and chaos in administration of tax laws. When an order is passed by a higher authority, the lower authority is bound thereby keeping in view the principles of judicial discipline. This aspect of the matter has been highlighted by this Court in Bhopal Sugar Industries vs. Income Tax Officer. Bhopal [AIR 1961 SC 182] in the following terms (Page 622): (a) "If a subordinate tribunal refuses to carry out directions given to it by a superior tribunal in the exercise of its appellate powers, the result will be chaos in the administration of justice and we have indeed found it very difficult to appreciate the process of reasoning by which the learned Judicial Commissioner while roundly condemning the respondent for refusing to carry out the directions of the superior Tribunal, yet held that no manifest injustice resulted from such refusal. (b)....
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....eas the alleged interest free advances were to the tune of Rs. 6.96 crores. The ld. counsel further stated that advances to Samarthkrupa Co-op. Housing Society was in fact nothing but advances for purchase of flats for facilitating the execution of scheme for which the company also entered into development agreement with the society. The ld. counsel further stated that similar is the nature of interest free advances of Rs. 3,75,33,041/- in the name of Silicon Valley Co-op. Housing Society and Swastik Co-op. Housing Society. The ld. counsel concluded by stating that not only the advances were made out of free. available fund with the assessee-company but also the advances were made purely for business purpose. Therefore, no disallowance of interest needs to be made. Per contra, the ld. D.R. strongly supported the findings of the revenue authorities. 14. We have carefully considered the orders of the authorities below and with the assistance of the ld. counsel; we have gone through the relevant documentary evidences brought on record in the light Rule 18(6) of the Appellate Tribunal Rules. We find force in the contention of the ld. counsel. As mentioned elsewhere, the interest free ....
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.... 18,24,754 respectively. Details shows that, the Company had to receive Rs. 63,70,000 from Silicon Valley Co. Op. Housing Society Ltd. against which it had a credit balance of Rs. 3,39,28,187 from the Members of the said society. Both the advances as well as credit balance pertain to the same party and it's members for the development of the scheme undertaken by the Company and therefore no interest is disallowable on Rs. 63,70,000 stated as above. 8. Reference to the details given on page S-14 also shows that, the purpose for which the amount was advanced. The amount include Rs. 1,34,90,633 paid for Swastik Co-Op. housing Society Ltd. Plot No. 85. As the Company can not directly purchase the plot in' it's name, with a view to develop a scheme, the Company purchased the said plot in the name of related persons to the director and paid advance for the same. This is clear from the Copy of Document/ Index-II submitted herewith. With regard to advance to other parties appearing on pg. No. S-14 also, the same is related to the various schemes developed by the Assessee Company. Considering the nature of business of the Company and the amounts being given, out of business co....
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....firmation received 19 Sandhyaben N Jaiswal 64 850000 Not found/not served 20 Shoe valley 69 850000 Not found/not served 21 Vakil Jayantital G(HUF) 75 490000 No confirmation received Total 6129000 As the assessee failed to furnish any explanation or details of receipt of Rs. 61,29,000/- from Silicon Valley members during the year under consideration. The receipt of Rs. 61,29,000/- is treated as unexplained cash credits u/s 68 of the I.T. Act and same is added to the total income of the assessee." 17. When the matter was agitated before the ld. CIT(A), the assessee failed to convince him. 18. Before us, the ld. counsel for the assessee vehemently stated that all the transactions were made by account payee cheques. The creditors were the allottees of the flat wherever the PAN details were available; the same was made available to the A.O. The ld. counsel further pointed out that in addition to the above details municipal tax bill from the Ahmedabad Municipal Corporation, wherein the name of the respective member appears and the details of the flat/shop on which municipal tax is assessed by the AMC, were also provided to the A.O.....