As regards the first creditor M/s. Sheetal Suitings Pvt. Ltd., the assessee has explained before the authorities below that this amount of Rs. 8,00,000/- was part of the block assessment where the AO made addition of Rs. 119.73 lacs and, therefore, once the said amount was subjected to tax in the block assessment, the same cannot be taxed again in the reopened assessment. The ld. A/R has referred to the details of the amounts which were part of the block assessment at pages 8 & 9 of the paper book. We find that this amount of Rs. 8,00,000/- in the name of M/s. Sheetal Suitings Pvt. Ltd. was part of the addition of Rs. 119.73 lacs made by the AO in the block assessment which was confirmed by this Tribunal. Accordingly, when this amount was already subjected to tax being part of the addition made by the AO then the same cannot be added in the reopened assessment. Accordingly, we delete this amount of Rs. 8,00,000/- in respect of M/s. Sheetal Suitings Pvt. Ltd. 10.1. The other loan creditors did not respond to the summons issued under section 131 by the AO. This Tribunal in the first round of appeal had specifically directed the assessee as well as the AO to bring the positive evidence on record in respect of the claims of loan credits. We further note that the assessee has claimed to have repaid the amounts of loans for the assessment year 1994-95 in the subsequent assessment year. Therefore, the repayment which is prior to the introduction of new cash credits would be available for set off against the additions of this assessment year. Since the AO has not given the benefit of repayment of the amount to the assessee but the fact remains that the assessee has repaid some of the creditors appearing in the books for the assessment year 1994-95 during the assessment year 1995-96, therefore, to the extent of repayment as per the record and bank account of the assessee which is prior to the introduction of new creditors during the assessment year 1995-96, the assessee would get the benefit of the said amount. Thus to the extent of no change in the peak cash credit in the cash book of the assessee, the repayment would be considered as re-introduction of the fresh cash credit during the year. Hence, we allow part relief to the extent of repayment in above terms. The AO is directed to verify the details of the repayment and the peak cash credit in the cash book of the assessee and then allow the benefit of availability of the cash which was claimed to have been repaid for introduction of fresh cash credit during the year.
Ground No. 2 is regarding disallowance of interest expenses. 11. This issue is consequential to the addition of cash credits for the assessment year 1994-95 and, therefore, the AO to re-compute the amount of interest disallowance on the amount which has been sustained by us for the assessment year 1994-95. Any interest disallowance on the cash credit introduced during the current year, the same is also consequential to the issue of addition finally stand sustained as per our order on this issue and accordingly the AO is directed to recompute the disallowance of interest. 11.1. Further, when the ld. CIT (A) has already restricted the disallowance of interest to Rs. 15,51,706/- in the second round of appeal, then the said disallowance on account of interest cannot be enhanced in the 3rd round of litigation by confirming the original disallowance made by the AO of Rs. 18,09,798/-. Hence, to the extent of disallowance which is more than Rs. 15,51,706/-, the same is deleted as based on the presumption of incorrect facts.