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TMI Blog2014 (3) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment. The matter travelled to the Tribunal, which set aside the assessments with directions on most issues. Both the authorities below, i.e., the assessing and the first appellate authority having, however, read and, therefore, applied the said directions differently, results in the present controversy before us in the main. This, thus, is the second round before the tribunal. The order/s by the tribunal in the first round having been accepted by both the parties, the same has assumed finality. The same is, thus, binding on the Revenue as well as on us. Our purview in the present proceedings would thus be limited to determine as to which of the authorities below, if so, have correctly applied the relevant direction/s by the tribunal, i.e., in the first round. There is no question of it's interpretation, though the same may be required to be explained, and which would only be in its terms, on the basis of a holistic reading thereof. We shall proceed year-wise. Revenue's Appeals in quantum proceedings (for A.Ys. 1989-90 and 1990-91) 3.1 Both the appeals raise a common issue, projected by the Revenue per its ground no.1, which reads as under: 1. On the facts & in the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otified party) for sum of Rs.71,75,81,049.54 for principal sum. So far as interest is concerned, it is kept open and will be decided on the merits." Accordingly, it directed as under: For A.Y. 1989-90 (in ITA No.2206/Mum/1996 dated 23.01.2007) '30. In the light of the judgment of the Hon'ble Special Court as mentioned above, it is not possible for us to endorse the addition of Rs.16,75,86,084/- agitated by the assessee in this appeal. This addition is therefore set aside. The issue is remitted back to the Assessing Authority to verify the details of the disputed sum and the details presented before and considered by the Hon'ble Special Court. If the identity of the amounts and particulars are established as argued by the assessee, this amount of addition is to be found part of the amount payable to Shri A. D. Narottam and accordingly the Assessing Officer has to delete the said amount from the computation of income. The matter is remitted back for the purpose of verification.' There being no change in the facts for the following year, i.e., A.Y. 1990-91 (in ITA No.2207/Mum/1996 dated 23.01.2007), the same decision was adopted therefor; its directions reading as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same from the loan account would result in a corresponding change in the account balance as on 31.03.1992, which is the basis of the decretal amount of Rs.71.76 cr. 4. We have heard the parties, and perused the material on record. The case of the parties before us was much the same; each relying on the order of the authority below as favorable to it. In our considered view, both the assessing and the first appellate authority have failed to appreciate the decision of the tribunal in the matter in the first round, i.e., in the right perspective. The additions are u/s.68, effected in view of the assessee being unable to satisfactorily prove the impugned credit/s as to its nature and source. As such, even if the amount/s is subsequently repaid to the ostensible creditor, and the credit neutralized in the assessee's books of account, the same would not operate to remove the basis that led to the amount being deemed as his income u/s.68 and, thus, constitute a ground for its deletion. Merely because the amounts stand reflected in the loan account of Shri A. D. Narottam in the assessee's books would, therefore, be no reason for their deletion, as held by the ld. CIT(A). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so that the said direction by the tribunal remains to be complied with. The primary onus thereof lies on the assessee. Its claim that all the entries, debit or credit, comprising the impugned sums (refer para 4.5of the impugned orders, i.e., for both the years) to be duly vouched, as by bank advices, and reflected in the bank's statement, shall however be required to be exhibited. The matter accordingly would have to be necessarily restored back to the file of the A.O. to enable the assessee to satisfy the condition/s subject to which only the tribunal had directed the A.O. to delete the said additions per para 30 of its order (supra). The A.O. shall decide afresh, issuing definite findings of fact, and after allowing the assessee reasonable opportunity to present its case before him. We decide accordingly. Revenue's Appeals in the penalty proceedings (for A.Ys. 1989-90 and 1990-91) 5. The only amount on which the penalty u/s.271(1)(c) has been levied in these appeals is for which the addition had been made in the set aside proceedings, and qua which the Revenue is in appeal before us in the second round, i.e., in the quantum proceedings. We having restored the matter bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee before the first appellate authority. Excluding the said credits (to the assessee's account) in his books (by Shri H. K. Dalal) would result in, on the contrary, a debit balance of Rs.12,13,17,393/- in the assessee's account, i.e., recoverable from the assessee-appellant, which is not the case. There has been, thus, a waiver of liability to the extent of Rs.13.23 cr. in favour of the assessee, which is liable to be assessed as income, adverting to section 41(1) of the Act. Aggrieved, the assessee is in second appeal. 7. We have heard the parties, and perused the material on record. The facts are admitted and not in dispute. The addition has been made with reference to the credits during the relevant year as appearing in the assessee's account in the books of account of another, and which have since found approval by the designated court, confirming him to be the assessee's debtor and, further, requiring him to discharge the debt by paying the assessee the amount outstanding per his books of account as on a particular date 24.12.1991 - the account continuing even after 31.03.1991. The credits being thus confirmed in the assessee's favour, i.e., as having been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or liability in the instant case; the debtor being rather required to pay the entire sum as outstanding in his books, which is inclusive of the three credits under reference, to the assessee. In fact, the credit to the assessee's account is itself an admission of the liability to the assessee. As explained herein-before, the debt to the assessee company being proved with reference to the decision by a court of law, the same stood confirmed as the assessee's income for the relevant year; the said account not appearing in the assessee's books of account nor it furnishing any explanation, much less satisfactory, as to the nature and source of its relevant asset/s in the form of a debt/s due to it. Section 69/69A/69B, as the case may be, would have application in the facts of the case. We, accordingly, find no merit in the assessee's case and uphold the addition, modifying the impugned order to the extent it adverts to or draws on section 41(1) of the Act. We decide accordingly. Revenue's Appeal (for A.Y. 1991-92) 8. The Revenue's appeal raises three grounds, as under: "1. On the facts & circumstances of the case and in law, the ld. CIT(A) has erred in delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective stands in the matter, which stand delineated by us at para 3.2 above. So, however, our decision would have to be based on the direction/s by the tribunal in the first round inasmuch as the said order has become final upon its acceptance by both the parties. In this regard, clearly, all that the tribunal has required the assessee to show in the set aside proceedings is that the amount/s under reference are reflected in the loan account of Shri A. D. Narottam in its accounts, and, where so, no addition would be called for. The ld. CIT(A) has directed deletion on the basis of the said finding/s, with in fact the primary facts being not in dispute. His variance with the A.O. arises only on account of the latter's view of the amount/s being actually required to be shown to be a part of the decretal amount, a view which we have since discountenanced (refer para 4). No doubt, so has also been the view adopted by the ld. CIT(A); the reflection of the impugned amounts in the loan account of Shri A. D. Narottam being in fact the very basis for the addition u/s.68. So however, the directions by the tribunal for this year are as apparent at variance with that for the earlier years ..... X X X X Extracts X X X X X X X X Extracts X X X X
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