M/s. Ajanta Infrastructure Ltd., Aurangabad V. Commisisoner of Income-tax - 1,

ITA 770/PUN/2015

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5632 (ITAT-PUNE)
• Duration Of Justice: 6 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 24-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANURAG SRIVASTAVA
• Keywords: Revision of order; Depreciation; Accommodation entries; Reason to believe
• Section: 147; 68; 263; 115JB; 40(a)(ia); 133(6); 195

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘A’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.769 & 770/PUN/2015 िनधा रण वष / Assessment Years : 2007-08 & 2010-11 M/s. Ajanta Infrastructure Limited, D-5, API Compound, MIDC Area, Chikalthana, Aurangabad PAN : AAECA7855J Vs. CIT-1, Aurangabad Appellant Respondent आदेश / ORDER PER R.S.SYAL, VP : These two appeals by the assessee are directed against the separate orders dt. 27-03-2015 passed by the Pr. CIT-1, Aurangabad u/s.263 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment years 2007-08 & 2010-11. Since some common issues are raised in these appeals, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience. A.Y. 2007-08 2. Succinctly, the facts of the case are that the assessee is engaged in the business of land development, real estate dealings Assessee by Smt. Deepa Khare Revenue by Shri Anurag Srivastava Date of hearing 21-12-2021 Date of pronouncement 23-12-2021 ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 2 and allied activities. A return was filed declaring total income of Rs.41.02 crore, which was set off against brought forward losses. The assessee also showed liability u/s 115JB of the Act at Rs.9.13 crore. The assessment was completed u/s.143(3) r.w.s.147 of the Act on 26-03-2013, making solitary addition of Rs.6,25,000/- on account of denial of deduction u/s.80G. The ld. PCIT observed that the assessee accepted huge loans from certain parties, mainly from Kolkata, for which no proper verification was done by the AO as to their capacity, human probability as to how the Kolkata based parties came to be known to the assessee for advancing loans. Regarding certain other loans from eight parties, the ld. PCIT observed that most of them were penny stock companies having received huge premiums in the first year of their existence, which were providing accommodation entries. Considering the fact that the assessee furnished only certain confirmations from these parties without the respective bank account statements, copy of returns of income, he opined that it did not establish the genuineness of the creditors. In this backdrop, he held that the AO did examine genuineness of these loan transactions. He further noticed that the assessee set off loss/depreciation for the assessment years 1999- 2000 to 2003-04 against the income for the current year and reduced ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 3 the Business income to Nil. He noticed that the AO accepted the losses claimed by the assessee without calling for any details in respect of the same. Another point was observed about the interest allowed u/s.36(1)(iii), which in his opinion, called for disallowance. In the ultimate analysis, the ld. PCIT set-aside the assessment order and directed the AO to reframe the assessment on such points afresh as per law after considering proper facts and submission of the assessee. The assessee has come up in appeal against the impugned order. 3. We have heard the rival submissions and gone through the relevant material on record. Section 263 of the Act provides for revision of an assessment order prejudicial to the interest of the revenue. This section provides that the CIT may call for and examine the record of any proceeding under this Act, and if he considers that any order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard, pass such orders thereon as the circumstances of the case justify. Thus, an assessment order can be revised by the CIT u/s.263 if it is erroneous and prejudicial to the interest of the revenue. An erroneous order is a one which is contrary to the facts or law. An ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 4 order is prejudicial to the interest of the revenue, if predominantly, the exchequer has been deprived of tax lawfully payable by an assessee. The assessment order in the extant case was passed u/s.143(3) r.w.s.147 in which the AO recorded, very briefly in para 3, that the assessee furnished written submissions. The case was discussed “and the relevant information called for and verified”. It further records that “Notices u/s.133(6) of the Act were issued to various parties. In response, most of the parties, have submitted the relevant information to this office and the same has been verified and kept on record.” Apart from making the above discussion devoting around ten lines, without discussing anything in detail, the AO switched over to the donation of Rs.6,25,000/- debited to the Profit and loss account and disallowed the same. Ergo, it is clear that the AO did not discuss in detail about the issues that have been taken note of by the ld. PCIT in the impugned order. It is true that an assessment order need not have discussion about all the aspects of the assessment on which the AO gets satisfied. But, there must be material to indicate that the AO did enquire about the relevant issues concerning the assessment and got satisfied with the explanation tendered by the assessee in the same way in which a person reasonably instructed in law will do. Anything short of that ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 5 renders the assessment order erroneous and prejudicial to the interest of the revenue giving a valid jurisdiction to the CIT to revise the same u/s 263 of the Act. 4. We start with the first issue, namely, acceptance of loan by the assessee from the following Kolkata parties, as have been tabulated by the ld. PCIT on page 1 of the impugned order: Sr. No. Name & address of the party Loan amount Date 1 Gitabali Merchants Pvt. Ltd., 3, Saklat Place, Kolkata-700072 Rs.25.00 lakh 10/11/2006 2 Glorious Holding Pvt. Ltd. 3, Saklat Place, Kolkata-700072 Rs.25.00 lakh 09/11/2006 3 Artline Fiscal Services Pvt. Ltd., 3, Saklat Place, Kolkata-700072 Rs.25.00 lakh 09/11/2006 4 Expresso Tie-up Pvt. Ltd., 3, Saklat Place, Kolkata-700072 Rs.25.00 lakh 10/11/2006 5 Stronach Trade Pvt. Ltd. 7, Swallow Lane, Kolkata West, Bengal – 001 Rs.10.00 lakh 13/11/2006 6 Renuka Vypar & Viniyog Pvt. Ltd., 1E, Burman Street, Kolkata,WB-007 Rs.30.00 lakh Rs.30.00 lakh 04/10/2006 13/10/2006 7 Rasili Barter Pvt. Ltd., 1E, Burman Street, Kolkata,WB-007 Rs.40.00 lakh 13/11/2006 8 Gangadham Tracon Pvt. Ltd., Burman Street, Kolkata,WB-007 Rs.25.00 lakh 04/10/2006 5. The AO issued notice u/s.142(1) to the assessee on 02-03-2012 enquiring, inter alia, about unsecured loans along with purpose and documentary evidence for identity and credit worthiness of the loan creditors and the genuineness of loan transactions. The assessee submitted a reply, whose copy has been placed at page 181 of the ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 6 paper book annexing a list of sundry creditors along with their confirmations. 6. The first party is Gitabali Merchants Pvt. Ltd., Kolkata, from whom the assessee received a loan of Rs.25.00 lakh on 10-11-2006. Second party is Glorious Holding Pvt. Ltd., Kolkata, from whom the assessee received a loan of Rs.25.00 lakh on 09-11-2006. Third party is Artline Fiscal Services Pvt. Ltd., Kolkata, from whom the assessee received a loan of Rs.25.00 lakh on 09-11-2006 and the fourth party is Expresso Tie-up Pvt. Ltd., Kolkata, from whom the assessee received a loan of Rs.25.00 lakh on 10-11-2006. Though all these four parties are separate legal entities from Kolkata, but have given similar address. It is just within the two dates that the assessee received a loan of Rs.25.00 lakh from each of the four parties, totaling Rs.1.00 crore. Confirmation of the first party, namely, Gitabali Merchants Pvt. Ltd., Kolkata was furnished to the AO. Thereafter, the AO issued notice u/s.133(6) of the Act to this party seeking details of loan, balance sheet, copy of bank account from where the loan was advanced etc. No response was received from the loan creditor. Despite this, the AO did not consider it expedient to investigate the matter further or at least to confront the ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 7 assessee with this fact and promptly completed the assessment accepting it to be a genuine loan creditor. 7. The next party is Glorious Holding Pvt. Ltd., Kolkata for which the assessee furnished confirmation to the AO. The AO issued notice u/s.133(6) to this party seeking similar details. No reply was received and still the AO proceeded to frame the assessment accepting the creditor as genuine. Similar is the position regarding most of the remaining creditors tabulated above. Loan totaling up to Rs.2.35 crore on various dates between 04-10-2006 to 13-11-2006 were received by the assessee from the above Kolkata parties, for which the AO did not carry out any investigation notwithstanding the fact that none of them had responded to his notice u/s 133(6) of the Act. 8. Then there are two parties from Mumbai, namely, Vishnu Laminations Private Limited and Sun Transtamp Pvt. Ltd. tabulated in the second table on page 1 of the impugned order, from whom the assessee showed loans with closing balances totaling to Rs.3.64 crore. The assessee simply filed confirmation from these parties and the AO did not consider it useful to cause further enquiry despite the fact that huge amounts were transacted and there was ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 8 admittedly no prior business connection or any commercial dealing with them. 9. On page 2 of the impugned order, the ld. PCIT has discussed eight parties, namely, (1) Dhwani Solutions Pvt. Ltd., Mumbai; (2) Bhavsagar Vinimay Pvt. Ltd., Kolkata (3) Money Matters, Mumbai (4) Ushika Merchants Pvt. Ltd., Kolkata (5) Aakanksha Advisory Services Pvt. Ltd., Kolkata (6) Luckyprime Dealer Pvt. Ltd. Kolkata (7) Couple Invests Pvt. Ltd., Mumbai and (8) Corbal Suppliers Pvt. Ltd. These parties are again from Kolkata or Mumbai, as against the assessee operating from Aurangabad. 10. For Dhwani Solutions Pvt. Ltd., the assessee filed confirmation, whose copy is available at page 15 of the paper book. There are four loan transactions with this party, two on 23-09-2006; one on 25-09-2006; and one on 26-09-2006. The first two transactions total up to Rs.15.00 lakh and the remaining transactions are at Rs.10.00 lakh each. Admittedly, the assessee did not have any prior business transactions with it. The AO issued notice u/s.133(6) to this party. Again, no reply was received and the AO quietly accepted genuineness of the transactions. 11. Money Matters, Mumbai, responded to the AO’s notice u/s.133(6) and submitted its income-tax return along with the ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 9 balance sheet etc. The ld. PCIT on perusal of the details noticed that this company had shown total income at Rs.1,54,723/- and gave loan of Rs.2.66 crore to others. The AO chose not to examine the matter further to find out the capacity of the loan creditor and the genuineness of the transaction. 12. Ushika Merchants Pvt. Ltd., is a Kolkata based company. This company furnished details in response to notice u/s.133(6) of the Act. The ld. PCIT noted that it had net profit of Rs.15,954/- with sales at Rs.16,77,300/-. This company had made investments of Rs.7.68 crore in shares for which it received share premium of Rs.8.55 crore. This is the first year of the operations of the company and it claimed to have received such huge share premium. The AO did not notice any of the adverse features and accepted the transaction as genuine. 13. Aakanksha Advisory Services Pvt. Ltd. is again a Kolkata based company. From its reply, the ld. PCIT observed that this company showed profit of Rs.18,843/- but had made investment of Rs.4.60 crore in shares. During the very first year of its operation, the company had shown to have managed huge share premium. For this party also, the AO did not find out anything amiss and accepted the genuineness of transaction. ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 10 14. Luckyprime Dealer Pvt. Ltd. is again a Kolkata based company. The ld. PCIT observed from the details furnished that it showed net profit of Rs.19,038/- and declared Investments of Rs.2.93 crore with receipt of share premium of Rs. 4.40 crore. The AO did not notice any such factor and accepted the genuineness of the transaction without conducting any enquiry. 15. Corbal Suppliers Pvt. Ltd. is again a Kolkata based company, from which the assessee declared to have received loan. The ld. PCIT noted from the details furnished by this company that it showed profit of Rs.19,378/-; made investments of Rs.8.77 crore in shares of private limited companies; and showed to have received share premium of Rs.12.87 crore which was utilized either for giving loans or making investment in shares. The AO could not find out anything wanting from the material furnished by this company, which apparently indicated that a further enquiry was called for. 16. On going through the different sets of creditors as discussed above in the impugned order, it clearly emerges that the assessee allegedly received huge money running into several crores as loan from the parties based mainly in Kolkata and Mumbai, whereas it was operating from Aurangabad. Neither any of such companies was engaged in financing business nor the assessee had any prior ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 11 business dealings with them. Despite this, the AO did not think it appropriate to examine as to how these parties from other cities came into contact with the assessee and liberally granted huge loans to the assessee. The AO issued notice u/s.133(6) to these lenders. Some of the parties chose not to reply and still the AO got satisfied with the genuineness of the transactions without even the basic courtesy of confronting the assessee with this fact. He simply accepted the genuineness of all the transactions by noticing in the assessment order that “Notices u/s.133(6) of the Act were issued to various parties. In response most of the parties have submitted the relevant information to this office and the same has been verified and kept on record”. We are unable to comprehend as to how the AO could note in the order that most of the parties submitted relevant information to him when most of them, in fact, did not even bother to respond. As regards the others, who responded, the account given by the ld. PCIT is crying hoarse that a further examination was warranted, which the AO failed to carry out. Per contra, the AO has recorded in his order that he verified the information filed by the parties. We are again at loss to appreciate as to what sort of verification was done by him when it was open to naked eyes that the transactions did not prima-facie appear to be ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 12 genuine. He remained mute spectator to the on-goings and chose not to exercise the statutory power vested in him for performing his duty of completing the assessment as per law. The ld. PCIT rightly reviewed the position from the details furnished by some of the loan creditors in concluding that these were penny stock companies engaged in providing the accommodation entries. These companies were used as vehicles for routing the unaccounted income. The above circumstances strongly warranted a thorough probe at the end of the AO, which was given a quiet burial at the AO’s end by accepting the genuineness of the transactions. 17. There can be three broad situations rendering an assessment order erroneous amenable to revision, viz., (i) where the AO does not initiate any enquiry at all and completes the assessment; (ii) where the AO initiates enquiry but leaves it in between and passes the order; and (iii) where the enquiry is conducted and still the assessment is framed without drawing any logical conclusion from the material gathered during the course of enquiry. The above three situations bring the matter within the ambit of cases of non- application of mind by the AO. The Hon’ble Supreme Court in Malabar Industrial Co. Ltd. VS. CIT (2000) 243 ITR 83 (SC) has held that an order passed without application of mind is an ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 13 erroneous order calling for revision u/s 263 of the Act. Considering the factual panorama prevailing in the instant case, we find that though the AO initiated enquiry but completed the assessment either without receiving the replies or having received the replies, failed to apply his mind for drawing logical conclusions. The Hon’ble Supreme Court in Malabar Industrial Company Ltd (supra) has also held that “incorrect assumption of facts or incorrect application of law will satisfy the requirement of the order being erroneous”. The Hon’ble Supreme Court further noticed in para 10 of the judgment that the AO: “accepted entry in the statement of account filed by the appellant in the absence of any supporting material and without making any enquiry. On these facts, the conclusion that the order of the ITO was erroneous is irresistible”. We are also confronted with a similar situation in which the AO incorrectly assumed the correctness of the facts that was actually not the case, which warranted further investigation. The Hon’ble Supreme Court in Toyota Motors Corporation Vs. CIT (2008) 306 ITR 52 (SC) considered a case in which the AO initiated penalty u/s.271C of the Act and dropped the same. The assessee contended during the course of revision proceedings that all the facts were placed before the AO who failed to incorporate the same in the order. The ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 14 Hon’ble Supreme Court upheld the view point of the Revenue by holding the impugned order to be erroneous as well as prejudicial to the interest of the revenue. In CIT Vs. Amitabh Bachchan (2016) 384 ITR 200 (SC), the assessment order was revised u/s.263 on the ground that requisite and due enquiries were not made by the AO prior to the finalization of the assessment. In finalizing the order u/s.263, the CIT arrived at findings and conclusions in respect of some of the issues which were not specifically mentioned in the show cause notice. The Tribunal cancelled the revisionary order, which view got echoed by the Hon’ble Bombay High Court. Overturning the impugned judgment, the Hon’ble Supreme Court observed that even though the fresh issues were not part of notice u/s.263, but the same were validly taken up by the CIT as he gave due opportunity of hearing to the assessee. On other issues, which were part of notice u/s.263, the Hon’ble Supreme Court held that it was a fit case of exercise of suo motu revisionary power because the AO did not investigate the matter correctly. 18. The ld. AR also took up such a contention as was taken in the case of Amitabh Bachchan (supra) that the order passed u/s.147, which was subjected to revision, was confined only to disallowance of deduction u/s.80G and the ld. PCIT ought not to have considered ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 15 other issues for holding the assessment order to be erroneous and prejudicial to the interest of the Revenue. We are not convinced with the submission. The opening part of section 147 categorically provides that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section. Thus, it is evident that section 147 duly empowers the AO to make addition on any other income chargeable to tax which escaped the assessment and comes to his notice during the reassessment proceedings, in addition to the point(s) on which the re-assessment was initiated. Turning to the facts of the instant case, we find that though the AO initiated reassessment for denial of deduction u/s.80G, but he did initiate enquiry on receipt of unsecured loans for which the assessee also furnished certain details as discussed above. In that view of the matter, it cannot be said that the ld. PCIT travelled outside the assessment order passed u/s 147 of the Act, which vitiated the revisionary order. ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 16 19. After conclusion of the hearing, the ld. AR furnished a letter submitting that the assessment in this case was made on the basis of AIR information and CBDT Circular No.225/26/2006 dated 08-09- 2010 provides that the scrutiny must be restricted to the issues of AIR information and hence no action u/s.263 can be taken in respect of the issues not forming part of AIR information. We have discussed this issue hereinabove pointing out the scope of section 147 and the argument raised by the ld. AR to the effect that since the issue of loans was not decided by the AO, the revision was ousted. The instant argument raised through a separate letter after the conclusion of hearing is just another aspect of the same argument and hence meets with the same fate of rejection. 20. The next contention of the ld. AR was that the revision is permissible only in respect of ‘no enquiry’ cases and not ‘inadequate enquiry’. She asserted that the AO made certain enquiry which was even though inadequate but did not call for any revision. We are not convinced with the submission put forth by the ld AR on this score in the background of the facts as are obtaining here. It is more than apparent from the discussion made supra that though the AO initiated enquiry but left the same in lurch when he stopped and accepted the genuineness of the transaction even ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 17 though no reply was received to his notices u/s 133(6) of the Act in many cases. The Hon’ble Calcutta High Court in Rajmandir Estates Pvt. Ltd. Vs. PCIT (2016) 386 ITR 162 (Cal) and several other cases on similar line considered the facts in which the assessee companies received share capital with huge share premium. Notices u/s.147 were issued. In such proceedings, the assessees furnished necessary details of receipt of share capital and share premium, which were kept on record but no examination as to the genuineness was carried out. The CIT revised the assessment orders. The appeals came up for consideration before the Kolkata Tribunal in a batch of hundreds of appeals, which got disposed off the lead order in Subhlakshmi Vanijya (P) Ltd., and others Vs. CIT (2015) 155 ITD 171 (Kolkata). The assessee therein also took the plea before the Tribunal that it was a case of ‘inadequate enquiry’ and not ‘no enquiry’ and hence was beyond revision. Rejecting such contention, the Tribunal held that in the given circumstances it could be easily classified as a case of ‘no enquiry’ and not ‘inadequate enquiry’. When the matter travelled to the Hon’ble High Court, this view got the imprimatur. The assessee’s SLP has since been dismissed in Rajmandir Estates Pvt. Ltd. Vs. PCIT (2017) 391 ITR (St.) 233 (SC). In view of the foregoing discussion, ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 18 we are satisfied that the facts of the instant case are not materially different from the case of Rajmandir Estates Pvt. Ltd.(supra) in so far as this aspect is concerned. Respectfully following the precedent, we jettison this contention. 21. The next issue raised by the ld. AR was that section 68 could not have been invoked in respect of unsecured loans because the assessee furnished confirmations from the loan creditors. The contention was based on the judgment of the Hon’ble Supreme Court in CIT Vs. Lovely Exports Pvt. Ltd. (2008) 216 CTR 195 (SC) in which it has been held that no addition can be made even if the shareholders are bogus. At this stage, it is relevant to mention that we are not considering a case of bogus shareholders in the assessment of a company. Rather, it is a case in which the assessee received unsecured loans from the companies, some of which are penny stock. The ratio of Lovely Exports (supra) has no application to the facts of the case under consideration. 22. To sum up, we highlight some of the pertinent points which amply demonstrate that the AO completed the assessment by miserably failing to apply his mind: - The assessee, situated in Aurangabad, received loans running into crores from certain companies based in Kolkata or ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 19 Mumbai, that were neither in the financing business nor had any past business dealings with the assessee. No question was asked by the AO as to how the assessee came into contact with them, the answer to which was neither given to the ld. PCIT nor has it come up before the Tribunal. - The AO issued notice u/s 133(6) to such parties. Most of them did not respond and the AO chose to accept the genuineness of the loan creditors without proceeding further as per law, rather, by recording to the contrary in the assessment order. - Most of the companies which replied and filed their Balance sheets etc. had shown to have received huge share premium on issue of share capital without any justifiable valuation. Such companies had declared nominal profit running into thousands or a few lakhs, but the share premium was in crores. These companies were prima facie shell or penny stock companies. The AO kept the information received on record without blinking. - Four Kolkata based companies who allegedly advanced identical loans of Rs.25.00 lac each had same address and the AO did not consider it expedient to inquire further. ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 20 - No interest was paid to some of the unsecured loans despite no prior business dealings except the loan transactions under consideration. The AO still did not doubt the genuineness of loan transactions necessitating further action. 23. Despite the above facts, the AO has recorded in the assessment order that the relevant information was called for and verified and most of the parties submitted the relevant information in response to the notices issued u/s.133(6) of the Act. In the hue of the foregoing discussion, we are fully satisfied that there was utter failure on the part of the AO to conduct enquiry in respect of huge loans received by the assessee from various parties thereby rendering the assessment order erroneous and prejudicial to the interest of the Revenue justifying the exercise of revisionary power u/s 263 of the Act. 24. In view of the fact that the revision is validated on the issue of unsecured loans received by the assessee, there is no point in discussing the other issues taken note of by the ld. PCIT for revising the order. If the revisionary order is valid on even one of the issues, the order stands and justifies the revision. All the grounds espoused by the assessee in the appeal also assail the justification of passing the revisionary order in general without reference to any particular ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 21 issue. Once it is held that the AO failed to apply his mind to the issue of unsecured loans which ought to have been done in the facts and circumstances of the case thereby rendering the assessment order erroneous and prejudicial to the interest of the revenue, the sequitur is that the exercise of revisionary power gets justified. As can be seen, that the ld. PCIT did not enhance the assessment on any issue but simply restored the matter to the file of the AO: `with a direction that the assessment order should be reframed as per the provisions of law after considering proper facts and submissions of the assessee and also for necessary verification in the light of the observations made above, after affording proper opportunity to the assessee’. If the assessee has an explainable case on the issues taken note of by the ld. PCIT, it can put forth the same before him in the course of proceedings giving effect to the order passed u/s 263. 25. In the result, the appeal is dismissed. A.Y. 2010-11 26. The assessment in this case was completed u/s.143(3) of the Act on 28-03-2013 accepting genuineness of the loan creditors. Though addition of Rs.10.00 lakh was made out of expenses and a further addition of Rs.25.16 lakh was made towards disallowance of interest, the ld. PCIT held the assessment order to be erroneous and ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 22 prejudicial to the interest of revenue, inter alia, on the ground that the assessee company raised huge loans, genuineness of which was not examined by the AO. 27. We have considered the rival submissions and gone through the relevant material on record. The ld. PCIT observed that the assessee raised the following hefty unsecured loans, that have been tabulated on page 1 of the impugned order: Sr. No. Loan taken in the name of Loan amount taken (Rs.) 1 Elpee Corporation 8815222 2 Falcon Complex Pvt. Ltd. 1506214 3 Gautam Resources 7500000 4 Kasturi Towers Ltd. 5027024 5 Konark Commerce Industrial Ltd. 2500000 6 Neel Vastu Holidays Resorts Pvt. Ltd. 2000000 7 Premchand Realtors Pvt. Ltd. 42240000 8 Rajrath Merchants Pvt. Ltd. 753994 9 Shri Tulsi Buildcon 25000000 10 Skyline Tracom Pvt. Ltd. 1004143 11 Surana Reality 1500000 12 Swadist Sweets Pvt. Ltd. 3016570 13 TAC Technosoft Pvt. Ltd. 4155441 14 Tigerstone Trading Pvt. Ltd. 7000000 15 Trishala Vyapar Pvt. Ltd. 753994 16 Varun Developers 10000000 17 Yogeshwari Enterprises 5000000 18 Shri Tulsi Buildcon 25000000 28. For this year again, the assessee furnished confirmations in the same way in which it was done for the assessment year 2007-08. The AO issued notices u/s.133(6) of the Act to such parties. Some of the notices were not replied. Those who responded, gave such ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 23 details, which prima facie necessitated further enquiry, but the AO did not take any step in that regard. 29. The first loan creditor is Elpee Corporation, Mumbai. Though the assessee filed confirmation, but the notice u/s.133(6) issued by the AO on 05-02-2013 remained unreplied. Non receipt of reply to such notice did not activate the AO to proceed further and go to the depth of the transaction. 30. The next is Falcon Complex Pvt. Ltd., a Kolkata based party. The assessee filed confirmation, but no reply was received when the AO issued notice u/s.133(6). Still, the AO accepted the genuineness. 31. The next is Gautam Resources, a Kolkata based party, from whom the assessee received a loan of Rs.75.00 lakh. The assessee filed confirmation. Notice u/s.133(6) was issued and the party replied to the same. This is a case in which though the assessee received a loan of Rs.75.00 lakh but no interest was paid which is borne out from page 143 of the paper book, being a copy of account of Gautam Resources in the books of assessee. Such a huge amount of Rs.75.00 lakh, given the fact that the assessee did not have any prior business or commercial dealings, was allegedly received ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 24 without any interest. The AO just accepted the genuineness without any whisper. 32. The next is Kasturi Towers Ltd., again a Kolkata based company. The assessee received a sum of Rs.50.00 lakh from this party which emerges from page 144 of the paper book. Even though interest of Rs.27,024/- was credited to the account but there was no deduction of tax at source. If there is no deduction of tax at source, the law requires making disallowance u/s 40(a)(ia) of the Act. The AO chose neither to examine the genuineness of the loan nor make the disallowance. 33. The next party is Konark Commerce Industrial Ltd., Kolkata, from whom a sum of Rs.25.00 lakh was received. A copy of confirmation is available at page 145 of the paper book. There is no payment of any interest despite the fact that the assessee did not have any prior business dealings with it. The AO issued notice u/s.133(6) to this party. No reply was received and the AO accepted the genuineness of the transaction without a murmur. 34. The next is Premchand Realtors Pvt. Ltd., Aurangabad, with balance payable at Rs.4.22 crore. No confirmation in respect of this party was filed before the AO. Neither the AO demanded any ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 25 confirmation nor issued any notice u/s 133(6) of the Act but accepted it as genuine. 35. Another party is Shri Tulsi Buildcon, Aurangabad from whom a sum of Rs.2.50 crore was received. No confirmation was got filed from this party for proving the validity of the transaction. The AO did not act and accepted it as genuine. 36. Another sum of Rs.1.00 crore was received from Varun Developers, Pune, whose confirmation has been placed at page 154 of the paper book. No interest was paid on such amount despite the fact that the assessee did not have any prior business dealings with it. Similar is the position regarding other loans as well. 37. The AO accepted the genuineness of all the unsecured loans running into several crores notwithstanding the fact that some of them even did not respond to his notices issued u/s.133(6) of the Act and others who furnished replies had such facts which strongly suggested a further probe, which the AO failed to make. It is again a case of non-application of mind by the AO to the facts and circumstances of the case rendering the assessment order erroneous and prejudicial to the interest of the Revenue. By and large, the facts of the unsecured loans for this year are mutatis mutandis similar to those of the A.Y. 2007-08 discussed above. Following our view, ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 26 we hold that the ld. PCIT was justified in revising the assessment order. 38. For this year also, the ld. PCIT did not enhance the assessment but simply set it aside for passing a fresh assessment order as per law after allowing opportunity of hearing to the assessee. The assessee will have ample opportunity of putting across its point of view to the AO in the proceedings in giving effect to the impugned order on all the issues taken up in the revisionary order. 39. In the result, the appeal is dismissed. Order pronounced in the Open Court on 23 rd December, 2021. Sd/- Sd/- ( S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 23 rd December, 2021 सतीश ITA Nos.769 & 770/PUN/2015 M/s. Ajanta Infrastructure Limited 27 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent; 3. The Pr.CIT-1, Aurangabad 4. 5. DR, ITAT, ‘A’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 21-12-2021 Sr.PS 2. Draft placed before author 23-12-2021 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *