ITAT dismisses Appeal by Anil Kapoor ‘s Production Company [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has dismissed an appeal filed by the Anil Kapoor Film Co. Pvt. Ltd and upheld the revisional order passed by the Principal Commissioner under section 263 of the Income Tax Act.

The assessee is in the business of producing feature films/TV serials, declared nil income/loss from the business in its return filed on 26/11/2014. Notice under section 143(2) dated 01/09/2015 and subsequently, notice under section 142(1) of the Act, along with a questionnaire, were issued/served upon the assessee. The assessee attended the proceedings under section 143(3) of the Income Tax Act from time to time and filed part details.

The Pr. Commissioner observed that the assessee claimed to have obtained a loan from one “Anubhav Vinimay” amounting to Rs.2 crores and the confirmation of the loan transactions was furnished on 27/12/2016 and the assessment order was passed on 29/12/2016 itself.

The Pr. Commissioner observed that the creditworthiness/genuineness of the transactions of the lender was never verified/examine by the Assessing Officer and even in the loan confirmation documents, the address of the lender is not mentioned and further the assessee company neither filed the return of income of M/s Anubhav Vinimay Pvt. Ltd. nor the bank statement. It was further observed that the Assessing Officer raised any query with respect to the genuineness of the loan, therefore, the assessment was held to be erroneous and prejudicial to the interest of the Revenue.

“Assessing Officer should have made inquiries/verification, to satisfy himself with respect to the creditworthiness of the lender and genuineness of the transactions before framing the assessment, thus, the ld. Assessing Officer was directed to pass fresh assessment order after providing the due opportunity of being heard to the assessee. Even in the direction by the Ld. Pr. Commissioner to the Assessing Officer is not going to cause any prejudice to the assessee because the direction has been issued to the Ld. Assessing Officer to examine the genuineness of the loan and after providing the due opportunity of being heard to the assessee, the assessment is reframed. The assessee is at liberty to substantiate its claim, thus, we don’t find any infirmity in the impugned order, resultantly, the appeal of the assessee is without any merit, consequently, dismissed,” the Tribunal said.