DCIT, New Delhi V. Sh. Sanjeev Chhabra, New Delhi

ITA 1378/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86832 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: N K BHAT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NO.1378/DEL/2013 ASSESSMENT YEAR : 2009-10 DCIT, CIRCLE 8(1), NEW DELHI. VS. SANJEEV CHHABRA, 3B/45, MALL ROAD, NEW DELHI. PAN: AGIPC9594P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N.K. BHAT, CA DEPARTMENT BY : SHRI B.R.R. KUMAR, SR. DR DATE OF HEARING : 04.03.2015 DATE OF PRONOUNCEMENT : 05 .03.2015 ORDER PER GEORGE GEORGE K., JM: THIS APPEAL, AT THE INSTANCE OF THE DEPARTMENT, IS DIRECTED AGAINST THE CIT(A)S ORDER DATED 24.12.2012. THE RELEVANT ASSESSMENT YEAR IS 2009-10. ITA NO.1378/DEL/2013 2 2. THE SOLITARY ISSUE THAT IS RAISED IN THIS APPEAL IS WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE B Y APPLYING SECTION 41 OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS. THE ASSE SSEE HAD SHOWN SUNDRY CREDITORS OF RS.2,27,09,357/- IN THE BALANCE SHEET. IN THE COURSE OF ASSESSMENT PROCEEDINGS, AO HAD ASKED THE ASSESSE E TO FURNISH THE DETAILS OF THE SUNDRY CREDITORS WHICH HAS BEEN STAT IC FOR THE LAST THREE YEARS. SINCE DETAILS WERE NOT FORTHCOMING FROM THE ASSESSEE, THE AO ON AD HOC BASIS HELD THAT 7% OF THE TOTAL SUNDRY CREDI TORS HAVE CEASED TO EXIST AND ADDED THE SAME TO THE TOTAL INCOME (7% OF RS.2,27,09,357/- BEING RS.15,89,655/-). 4. ON APPEAL, THE CIT(A) DELETED THE ADDITION. THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOWS:- IN THIS CASE, THERE WAS NO REMISSION ON CESSATION OF LIABILITY IN RESPECT OF ANY OF THE PERSONS. NO BENEFIT ACCRU ED TO THE APPELLANT WHICH COULD BE DEEMED TO BE THE PROFIT AN D GAIN OF THE APPELLANT BUSINESS, WHICH WOULD OTHERWISE NOT B E THE APPELLANTS INCOME. THE AO FAILED TO SHOW THAT THER E WAS A DEDUCTION IN RESPECT OF A TRADING LIABILITY IN AN E ARLIER YEAR AND REMISSION OR CESSATION OF SUCH LIABILITY IN THI S YEAR ITA NO.1378/DEL/2013 3 RESULTED IN A BENEFIT TO THE APPELLANT. SINCE THER E IS NO CASE OF CESSION/REMISSION OF LIABILITY DUE TO THE PARTIES, THEREFORE, PROVISIONS OF SECTION 41(1) OF THE ACT ARE NOT APPL ICABLE. THE ABOVE MENTIONED CASES OF CIT V. SUGAULI SUGAR WORKS (P) LTD. (SC), CIT V SMT. SITA DEVI JUNEJA (2010) 325 I TR 593 (P&H) & CIT VS. AUTO KASHYAP INDIA (P) LTD., 330 IT R 435 (2010) (DELHI) ARE CLEARLY APPLICABLE TO THE FACTS OF THE CASE. THE ADDITION OF RS.15,89,655/- MADE IS, THEREFORE, DELETED. GROUND NO.1 IS RULED IN FAVOUR OF THE APPELLANT. 5. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. 6. THE LD. DR SUPPORTED THE ASSESSMENT ORDER. ON TH E OTHER HAND, THE LD. AR PLACED RELIANCE ON THE FINDINGS AND CONCLUSI ONS OF THE CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE CIT(A) HAS CATEGORICALLY F OUND THAT THE AMOUNT SOUGHT TO BE ADDED WAS NEVER CLAIMED AS A DEDUCTION IN RESPECT OF A TRADING LIABILITY IN THE EARLIER YEAR. THE CIT(A) FURTHER HELD THAT THE SAME HAS NOT CEASED TO EXIST AS A LIABILITY IN THE CURRENT ASSESSMENT YEAR RESULTING IN A BENEFIT TO THE ASSESSEE. THIS CATEG ORIC FINDING OF THE CIT(A) HAS NOT BEEN DISPELLED BY THE REVENUE. HENC E, WE UPHOLD THE ORDER OF THE CIT(A) AS CORRECT AND AS IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR. IT IS ORDERED ACCORDIN GLY. ITA NO.1378/DEL/2013 4 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 05.03.201 5. SD/- SD/- [G.D. AGRAWAL] [GEORGE GEORGE K.] VICE PRESIDENT JUDICIAL MEMBER DATED, 05 TH MARCH, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.