TMI Blog2021 (10) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer has not applied his mind and duly verified the above said settlement. In our considered view we noticed that Assessing Officer has verified the information submitted by the assessee based on the directions from co-ordinate Bench of this Tribunal and as such, the learned PCIT has not found anything to prove that assessment order is erroneous or prejudicial to the interest of the Revenue except expressing his doubt on the proceedings. - Decided in favour of assessee. - ITA No. 1617/Mum/2020 - - - Dated:- 29-9-2021 - Shri Mahavir Singh, VP And Shri S. Rifaur Rahman, AM For the Applicant : Shri Vijay Mehta, AR For the Respondent : Shri Mamta Bansal, DR ORDER PER S. RIFAUR RAHMAN: This appeal by the assessee is directed against revision order of learned PCIT-16, Mumbai dated 11.03.2020 and pertains to Assessment Year 1998-99. 2. The only issue in this appeal of assessee is against the revision order passed by PCIT under section 263 of the Act setting aside the assessment framed by the Assessing Officer. For this assessee has raised the following two grounds:- 1. The learned Commissioner of Income Tax has erred in law and on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Prabhavee 2,50,000 5. Shreeji Corporation 5,00,000 6. Gayatri Enterprises 2,50,000 7. Vipco Sales Corporation 5,00,000 8. Ray Engineering 4,00,000 9. Gayatri Enterprises 4,00,000 10. Raj Enterprises 2,50,000 11. Kartik Trading Company 2,50,000 12. Gayatri Enterprises 2,50,000 6. Further, the assessee has also produced copy of return of income along with audit report and profit and loss account showing that the assessee has duly accounted the above amounts, sales for Assessment Year 2002-03. considering the above submissions, the Assessing Officer considering the directions of the ITAT and the copy of the promissory notice duly discharge by the above said parties and accordingly, accepted the submissions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,00,000 22. Raj Enterprises 2,50,000 23. Kartik Trading Company 2,50,000 24. Gayatri Enterprises 2,50,000 We made an earnest plea that the loan taken from them of 45 Lakhs could not be repaid owing to financial crisis we were facing. After discussion and deliberations, it was mutually agreed between us that the said creditors of that the loans be converted into Rights and accordingly, vide letter dated 22/05/2001 it was mutually agreed to be done. (Copy of the letter enclosed). Since the Loans of 45 Lakhs were squared off by converting into an Investment with us, the HUNDI papers pertaining to this 45 Lakhs were duly discharged. The mention of this discharge has been mentioned properly on the back of the Hundi papers. From the above your Honor will kindly observe that the Loans has been squared off as per agreement, legally, contractually and roerlv without the involvement of cash of what so ever nature. Since the unsecured Loans had been taken by a/c Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d relying on the explanation 2 to section 263 of the Act learned PCIT observed that the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the Revenue and further he observed that the Assessing Officer should have applied his mind as to whether loan repaid has claimed by the assessee is at all allowable. Obviously, Assessing Officer failed to do that before passing the assessment order. Since, the Assessing Officer has failed to do so before finalizing the assessment order, the order is erroneous in as far as it is prejudicial to the interest of the Revenue and accordingly, he cancel the assessment order and directed the Assessing Officer to pass afresh assessment order after giving reasonable opportunity to the assessee of being heard as per law. Aggrieved, with the above order, assessee is in appeal before us. 10. At the time of hearing, the learned AR brought to our notice, the facts in the case by bringing us pages 6 to 29 of the paper book to explain the facts in this case. He brought to our notice page 36 of the paper book which is later issued by PCIT dated 07.02.2020. He brought to our notice the observation of the PCIT t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the ITAT and submitted that ITAT has given direction to verify the repayment by cheque but in actual the assessee has settled based on pro note basis. And further, he submitted that assessee has not filed any MA to clear the above said details. 12. In rejoinder, the learned AR submitted that the above observation of the learned DR is not the finding of the PCIT and he brought to our notice to Para 9, page 24 of the ITAT s order to submit that no such direction was given by ITAT on repayment. He submitted that what is relevant is assessee has duly discharge his loan liability. 13. During the rival submissions and materials on record, we noticed that the present assessment order passed by the Assessing Officer under section 143(3) read with section 254 on the directions of co-ordinate Bench of this Tribunal in order to verify the claim of the assessee that assessee has settled liabilities. The Assessing Officer duly verified the same based on the information submitted by the assessee. It is also observed that assessee has settled the liabilities based on the various rights given to the parties of the picture TRISHAKTI and assessee has submitted the copies of the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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 cheques. The assessee has not provided any information for filing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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