TaxTMI 
TaxTMI 
2021 (7) TMI 1169
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.... assessment order passed by its AO with the direction to pass fresh assessment order after giving assessee the opportunity of being heard as per law. 3. The appellant craves liberty to add, alter, amend, modify or delete any of the above grounds of appeal at the time of hearing." 2. The Brief facts of the case are that the assesse is engaged in production of films. The A.O. has received information from DDIT (Inv) Mumbai that one Mr Surendra Khandhar was indulged in providing bogus hawala entries and floated different concerns and the DDIT(Inv) has recorded the statement. Whereas, the assessee firm had obtained the unsecured loans from the two partnership firms related to Mr surrender khandhar. The A.O. has dealt on the statement recorded and found that the assesse is a beneficiary of loans from two concerns (i) M/s.Kapilesh Corporation Rs. 10 lakhs and (ii) M/s. Ray Engineering Rs. 10 lakhs. Since the assessee has not filed the return of income, the A.O. has issued notice u/s 148 of the Act. In compliance to the notice, the assessee has filed the return of income declaring Rs.Nil income on 22.04.2004.Further, the notice u/s 143(2) of the Act was issued. In complianc....
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....09.2009 (second round of litigation) has observed at page 3 Para 5.1 of the order and restored the matter to the file of the A.O.: "5.1 However, on merit, we are of the considered view that the matter needs re-verification at the end of the AO as the case has not been examined properly on merit. If the statement of a third party ignored then in that case, onus lay upon the assessee to prove the transaction by adducing necessary confirmation and evidences. No such efforts were made by the assessee to obtain the confirmation from the respective parties. Neither the department has tried to verify from the Income Tax Department, in spite of furnishing PAN etc., of the respective parties, as stated by the Ld. Counsel of the assessee. Therefore, we are of the considered view that to meet the end of justice, the matter should go back to the file of the AO in respect to al l these appeals to examine the issue afresh on merit and after affording reasonable opportunity to the assessee to file necessary details in respect of respective loans taken by the assessee. Accordingly, we set aside the order of the lower authorities and restore the matter to the file of the AO to pass a fresh....
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....whereby one of us i.e. Accountant Member was author of the said order of the Tribunal) wherein Tribunal held as under : "9. We have considered the rival submission and perused the material available on record. We have observed that the assessee has raised loans of Rs. 45,50,000/- from various parties during the instant assessment year 1998-99 under appeal and one Shri Surendra Khandhar has given statement u/s 131 of the Act against the assessee that he has floated various firms to give accommodation loan entries to various persons which also included the assessee. The said statement of Sh.Surender Khandhar was recorded by the Revenue at the back of the assessee. The said Shri Surendra Khandhar has not been subjected to cross examination by the assessee and hence the statement of Shri Surendra Khandhar cannot be used against the assessee until and unless the cross examination of the said Shri Surendra Khandhar by the assessee takes place. We find that the Tribunal in the first round of litigation, set aside the matter to the file of A.O. with a direction to reverify the loan transactions as per provisions of the Act after affording opportunity to the assessee, the Tribunal ....
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.... Tax department, inspite of furnishing PAN etc., of the respective parties, as stated by the ld. Counsel of the assessee. Therefore, we are of the considered view that to meet the end of justice, the matter should go back to the file of the AO in respect to all these appeals to examine the issue afresh on merit and after affording reasonable opportunity to the assessee to file necessary details in respect of respective loans taken by the assessee. Accordingly, we set aside the orders of the lower authorities and restore the matter to the file of the AO to pass a fresh order as per our above observations. 7. It is clear from the order of this Tribunal that the addition made on the basis of the statement of Mr. Surendra Khandhar without giving an opportunity of cross-examination was held to be not proper and accordingly it was observed that the statement of Mr. Surendra Khandhar cannot be used against the assessee: The AO was directed to decide the issue on merits after affording an opportunity to the assessee to file necessary details in respect of respective loans taken by the assessee. We note that in the assessment order passed in pursuant to the directions of this Tribu....
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....compliance to the directions of the Tribunal in second round of litigation, deleted the additions so made for assessment year 1997-98 after verifying that the loans have been duly repaid by the assessee vide orders dated 31-03- 2015 (copy placed in the file). The assessee has claimed that the loans raised during the instant year under appeal have also been repaid and claim of the assessee based on records showing the repayment of the loan is required to be verified. In the instant case, the issue and grounds are identical and in the interest of justice, respectfully following the order of the co-ordinate Bench of this Tribunal in ITA No. 5849/Mum/2011 vide orders dated 06-09-2013, the issue is set aside to the file of A.O. on the similar lines as was done by the Tribunal in the immediately preceding assessment year 1997-98 , for the limited purpose of verification by the AO of the fact and the record filed by the assessee to show that the loans in question raised during the instant assessment year of Rs. 45,50,000/- have been repaid by the assessee. The AO to decide the issue in terms of our above observations .With respect to additions made on account of interest of Rs. 4,00,000/-....
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....o consideration all the facts, circumstances, directions and the squaring of loan and confirmation observed that there is no addition to be called for and assessed the total income of Rs. Nil and passed the order u/s 143(3) r.w.s 254 of the Act dated 30.06.2017. 8. Subsequently, the Pr.CIT has issued show cause notice u/s 263 of the Act dated 16.01.2020 and observed that the A.O has not carried out the independent enquiries or verification and examination of the loan creditors and also fail to verify the fact of repayment of loans were made through account payee cheques. The ITAT directions was only if the repayment is made by the account payee cheques and no addition will be made. Therefore, the Pr. CIT observed that the order is erroneous and prejudicial to the interest of the revenue. The assessee in compliance to the notice u/s 263 of the Act has filed the reply on 06.02.2020 explaining the detailed facts and the reasons on the squaring of loan towards the investments. The Pr.CIT was not satisfied with explanations and relied on the A.O. report on the assesse's explanations endorsed by the Range head and passed order u/s 263 of the Act on 04.03.2020. Aggrieved by th....
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..... Considering the facts, circumstances, record of long drawn litigation, submissions of the assessee took a possible and reasonable view and prayed for allowing the assessee appeal. 11. Contra, the ld.DR submitted that the Pr. CIT has considered all these aspects and only set aside the order of the A.O. The A.O has not considered the directions as per the report submitted and endorsed by the range head and supported the order of the Pr.CIT. 12. We heard the rival submissions and perused the material available on record. We found that the assessee firm has fought a long litigation before the Honorable Tribunal up to the year 2016 being the three rounds of litigation. The Co-ordinate bench of tribunal in ITA no 5850&5851/M/ 2011 dated 29-07-2016 has restored the disputed issue with the directions to the A.O and allowed the assesses appeal for statistical purpose. The Ld. AR contentions are that the main partner of the assessee firm, who was looking after the creditors payments and unsecured loans has expired. Due to which the assessee firm was in financial crisis and was not in a position to repay the loans. Subsequently, because of mutual understanding between the loan credito....
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....ayment of loan and the same was followed in assesse's own case in ITAno5850&5851/M/2011 dated 29.7.2016 which is not disputed. 14. We find that the Ld. AR contentions are realistic and the assessee has resolved the issue by mutual understanding and compromise with the loan creditors towards the investments and there is no fresh information available before the A.O except the directions of the Hon'ble Tribunal. The A.O. has made efforts as his predecessors have undertaken on the disputed issue and in the present situation he could not change the circumstances. Therefore, we are convinced that the A.O has taken one of the possible view in the assessment order. Further, a query was raised to the Ld.DR, whether revenue has challenged the ITAT order 29-07-2016 before the Hon'ble High court it was clarified that no appeal has been filed. We on perusal of the Pr. CIT order find that the Pr. CIT could not find any specific error in the A.O. order but only relied on the ITAT directions on repayment of loan. We find that the Ld. AR has answered the query on the Miscellaneous Petition against the ITAT order dt 29-07-2016 and the same could not be filed due to lapse of time u/s 254(2) of th....