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TMI Blog2021 (7) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... s fought the litigation for the fourth time in the present case before this Hon ble Tribunal. We find the A.O as per the directions of the Honorable Tribunal in order [ 2016 (7) TMI 1618 - ITAT MUMBAI] has taken a possible view considering the litigation for a period of more than 20 years. We are convinced that the order passed by the A.O are on facts, circumstances, possible and reasonable views. We find the action of the Pr. CIT revising the A.O. order with out conducting of enquiry is not tenable. Accordingly we set aside the order of the Pr. CIT and allow the grounds of appeal in favour of the assessee. - ITA Nos. 1618 & 1619/Mum/2020 - - - Dated:- 17-6-2021 - Shri M Bala Ganesh, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Shri Vijay Mehta, AR For the Responden : Shri Rahul Raman, DR ORDER PER PAVAN KUMAR GADALE JM: These two appeals are filed by the assessee against the separate orders of the Principal Commissioner of Income Tax-16 (Pr.CIT) Mumbai, passed u/s. 263 of the Income Tax Act, 1961. Since the issues involved in the appeals are identical and similar, hence they are clubbed, heard and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed the total income of ₹ 20,31,250/- and passed the order u/s 143(3) and 147 and 144A of the Act dated 31.03.2005. On appeal before the CIT(A), the CIT(A) has confirmed the action of the A.O. On, Further appeal with the Hon ble Tribunal. The Co-ordinate bench of tribunal in ITA No. 2941 2942/Mum/2006 dated 30.10.2006 has restored the disputed issue to the file the A.O. for providing opportunity to cross examine Mr. Surendra Khandhar and the A.O has to decide the issue after providing opportunity of cross examination to the assessee. 3. The A.O. as per the directions of the Hon ble Tribunal has issued the letter and summons u/s 131 of the Act to Mr. Surendra Khandhar for cross examination, but there was no response. Further the Assessing officer deputed the inspector and the report was obtained. Since there was no response to the summons issued to the lender and the assessee could not produce the confirmation or the lender, the A.O found that there is no fresh information is received and the assessee is not in a position to furnish the loan confirmation as a primary evidence of establishment of loan. The A.O. relied on the facts mentioned in original assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring contains the name and address of the assessee, amount borrowed and the PAN No of the borrower firm. Thus the assessee firm has discharged the onus of the genuineness of the loan. It is for the department to verify the above and do the needful. Further, the additions made is on account of the statement of Shri Surendra Khandhar who is a witness of the Department. The assessee firm reserves the right to cross-examine shri Surendra Khandhar to know the truth behind the allegation by the income tax department that the loans are accommodated entries. Whereas the A.O. has considered the submissions and relied on the findings of the CIT(A) in the earlier round of litigation. Finally the A.O. has observed that there is no change in facts and circumstances and there is no other alternative except making addition u/s 68 of the act of ₹ 20,31,250/-and passed the order u/s 143(3) r.w.s 254 of the Act dated 31.12.2010.Aggrived by the order, the assessee has filed an appeal to CIT(A) and the appellate authority has confirmed the addition and dismissed the assessee appeal. 6. Aggrieved by the CIT(A) order, the assessee has filed an appeal with the Tribunal. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or assessment year 1997-98 vide orders dated 6th September, 2013, the said directions of the Tribunal are reproduced below:- We have considered the rival submissions and carefully perused the relevant material on record. In the earlier round of litigation this Tribunal has remanded the matter to the record of the Assessing Officer vide order dated 11-9-2009 in para 5 and 5.1 as under:- 5. We have heard the rival submissions and considered them carefully. As mentioned above, the assessments were completed originally which were set aside by the Tribunal with a direction to allow cross examination of one Shri Khandhar on whose statement basis, the additions were made in the hands of the assessee. Shir Khandhar could not be traced out in spite of best efforts made by the AO; therefore, cross examination could not be allowed. It is well settled law that without confronting the statement of witness or allowing cross examination, no adverse inference can be made against a person, against which statement of a third party is used. Since cross examination could not be allowed; therefore, we hold that the statement of Shri Khandhar cannot be used against the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has introduced his undisclosed cash under the garb of accommodation loan. In the circumstances, the loan so received are unexplained cash credit u/s 68 of the I. T. Act 1961 and same are brought to tax. Accordingly, a sum of ₹ 55,25,000/- is assessed as undisclosed income of the assessee for the year. Penal ty proceedings u/s 271(1)(c) of the I.T. Act, 1961 are initiated separately. Subject to the above remarks, the total income of the assessee is computed as under:- Business income Income as per order dtd. 31.3.2005 ₹ 2,35,505 Add: Disallowance of loan as per order Dtd. 31.3.2005 ₹ 30,00,000 Interest on loan ₹ 25,25,000 Total income ₹ 57,60,505 Rounded off ₹ 57,60,510 It is clear that the AO has not taken pain to examine the issue on merits on the basis of the details to be f iled by the assessee as directed by the Tribunal. Now before us the assessee has claimed that the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing heard shall be provided by the AO to the assessee in accordance with principles of natural justice in accordance with law and the assessee shall be allowed to produce evidences/explanations in its defense which shall be admitted and considered by the AO on merits. We order accordingly. 10. In the result, appeal of the assessee in ITA No. 7007/Mum/2011 for the assessment year 1998-99 is treated as allowed for statistical purpose. Our decision in the instant appeal in ITA No. 5850/Mum/2011 is in line with the decision of the Tribunal in the case of Dilsa Distributors Combine(supra) in ITA no. 7007/Mum/2011 wherein the facts were identical. 11. Our above decision in ITA no. 5850/Mum/2011 shall apply mutatis mutandis to the assessee s appeal in ITA No. 5851/Mum/2011 wherein the facts are identical. 12. In the result, both the appeals filed by the assessee in ITA N0. 5850/Mum/2011 for the assessment year 1997-98 and ITA No. 5851/Mum/2011 for the assessment year 1998-99 are allowed for statistical purposes. 7. The A.O considering the directions and decision of the Hon ble ITAT in ITA No. 5850/Mum/2011 dated 29.07.2016 to verify the repayment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r production of film Maseeha . Therefore the loans obtained earlier could not be repaid for long time due to the financial crises. Subsequently, it was mutually agreed that the loan creditors are converting the loans into investments and the letter was filed on 22.05.2001. The Ld. AR contentions are that in similar circumstances the Hon ble Tribunal in assessee sister concern in the case of M/s Dilsa Distributors Comines (supra) has dealt on the issue and has issued specific directions and the same are applicable to the assessee firm. Therefore, The Hon ble Tribunal in ITA No.5850 5851/Mum/2011 dated 29.07.2016 has made certain observations in respect of repayment of loans. 10. The Ld. AR mentioned that before the Pr.CIT the assesse has given complete disclosure of the facts and filed possible explanations. The Ld. AR also expressed the deep concern that the assessee firm is in the litigation before the Hon ble Tribunal for the fourth time and the A.O as per the directions has passed the reasoned order. The Pr.CIT has not pointed out any specific error in the A.O. order and emphasized only on the status of repayment of loan by account payee cheques. The Ld.AR su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pr. CIT has only verified the facts of loan and the assessee firm is in the litigation before the Hon ble Tribunal for the third time and the Pr.CIT has not pointed out any specific error in the A.O. order and emphasized only on the status of repayment of loan by account payee cheques and has relied on the observations of the A.O. duly endorsed by the Range Head at page 4 of the Revision order as under: The details submitted have been examined properly. The A.O has rebutted assessee s explanation which duly endorsed by the Range head, which is as under: . The A.O has submitted in his report that it is clear that the assessee has not repaid the money to the loan creditor as the production of the movie Maseeha was suspended and the contention of the assessee that the loans of ₹ 20 lakhs were squared off by converting into an investment seems to be incorrect. Further, the AO Stated that the assessee has requested to defer the proceedings u/s 263 for some time as the assessee is intending to file a Miscellaneous Petition before the ITAT to amend their order as the assessee had never pleaded before the ITAT that the loans taken had been returned by Account payee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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