Loomtex Engineering pvt Ltd., Kolkata V. DCIT, Cir-1(1), Kolkata, Kolkata

ITA 1774/KOL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5854 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 01-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Keywords: Unexplained expenditure; Depreciation; Additional depreciation; Additional evidence; Set aside
• Section: 69C; 115JB; 133(6)

Judgement Text

ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 572/KOL/2017 ASSESSMENT YEAR: 2011-2012 DEPUTY COMMISSIONER OF INCOME TAX,................. ..........................APPELLANT CIRCLE-1(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, 7 TH FLOOR, ROOM NO. 20, KOLKATA-700 069 -VS.- M/S. LOOMTEX ENGINEERING PVT. LIMITED,............. ..........................RESPONDENT HOLYNEST APARTMENTS, 14B, RANI RASHMONI ROAD, KOLKATA-700 035 [PAN: AAACL5131C] & I.T.A. NO. 1774/KOL/2017 ASSESSMENT YEAR: 2011-2012 M/S. LOOMTEX ENGINEERING PVT. LIMITED,............. ..........................APPELLANT HOLYNEST APARTMENTS, 14B, RANI RASHMONI ROAD, KOLKATA-700 035 [PAN: AAACL5131C] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ..........................RESPONDENT CIRCLE-1(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, 7 TH FLOOR, ROOM NO. 20, KOLKATA-700 069 APPEARANCES BY: SHRI ROBIN CHOUDHURY, ADDL. CIT, SR. D.R , FOR THE DEPARTMENT SHRI SUBASH AGARWAL, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JULY 10, 2019 DATE OF PRONOUNCING THE ORDER : AUGUST 09, 2019 ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 2 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THESE TWO APPEALS, ONE FILED BY THE ASSESSEE BEING ITA NO. 1774/KOL/2017 AND THE OTHER FILED BY THE REVENUE BE ING ITA NO. 572/KOL/2017 ARE CROSS APPEALS, WHICH ARE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLKAT A DATED 27.01.2017. 2. FIRST WE SHALL TAKE UP THE APPEAL OF THE ASSESSE E BEING ITA NO. 1774/KOL/2017 . THE ISSUE RAISED IN GROUND NO. 1 OF THIS APPEAL R ELATES TO THE ADDITIONS OF RS.86,58,069/- AND RS.1,35,51,0 00/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) ON ACCOUNT OF THE AMOUNTS PAYABLE BY THE ASSESSEE TO M/S. SHREE MAHAL AXMI TRADING & INVESTMENT CO. LIMITED AND M/S. BASANTI FINANCE & I NVESTMENT CO. LIMITED RESPECTIVELY BY TREATING THE SAME AS LIABIL ITIES, WHICH HAVE CEASED TO EXIST AS PER THE PROVISIONS OF SECTION 41(1) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF JUTE GOODS AND TRA DING OF JUTE & JUTE PRODUCTS. THE RETURN OF INCOME FOR THE YEAR UNDER C ONSIDERATION WAS FILED BY IT ON 26.09.2012 DECLARING TOTAL INCOME AT NIL . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICES UNDER SECTION 133(6 ) WERE ISSUED BY THE ASSESSING OFFICER TO VERIFY THE GENUINENESS OF THE LIABILITIES CLAIMED BY THE ASSESSEE IN RESPECT OF VARIOUS PARTIES. THE NOT ICES SENT BY THE ASSESSEE TO M/S. BASANTI FINANCE & INVESTMENT CO. L IMITED WITH CREDIT BALANCE OF RS.1,35,51,000/- AND TO M/S. SHREE MAHAL AXMI TRADING & INVESTMENT CO. LIMITED WITH CREDIT BALANCE OF RS.86 ,58,069/- WERE RETURNED BACK UN-SERVED WITH THE POSTAL REMARKS NO T KNOWN. ALTHOUGH THE ASSESSEE FURNISHED PHOTO-COPIES THE REPLY OF M/ S. SHREE MAHALAXMI TRADING & INVESTMENT CO. LIMITED AND M/S. BASANTI F INANCE & INVESTMENT CO. LIMITED SUBMITTED DURING THE COURSE OF ASSESSME NT PROCEEDINGS FOR ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 3 A.Y. 2010-11 TO PROVE THE GENUINENESS OF THE LIABIL ITIES STANDING IN THEIR NAMES, THE ASSESSING OFFICER FOUND THAT THE SAID LE TTERS DID NOT BEAR THE COMPLETE OFFICE ADDRESS. HE, THEREFORE, HELD THAT T HE SAID LETTERS DID NOT HAVE ANY AUTHENTICITY TO SHOW THAT BOTH THE LIABILI TIES IN QUESTION WERE GENUINE AND THEY WERE INEXISTENCE AS CLAIMED BY THE ASSEESSEE. HE ACCORDINGLY TREATED BOTH THESE LIABILITIES AS CEASE D TO HAVE EXISTED AND AN ADDITION OF RS.2,22,09,069/- WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 41(1) OF THE ACT. 3. THE ADDITION OF RS.2,22,09,069/- MADE BY THE ASS ESSING OFFICER UNDER SECTION 41(1) WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS). THE SUBMISSIONS MADE B Y THE ASSESSEE IN SUPPORT OF ITS CASE ON THIS ISSUE, HOWEVER, WERE NO T FOUND ACCEPTABLE BY THE LD. CIT(APPEALS) FOR THE FOLLOWING REASONS GIVE N IN HIS IMPUGNED ORDER:- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION OF THE ASSESSEE. ASSESSEE HAS MENTIO NED THAT LIABILITIES IN THE NAME OF M/S BASANTI FINANCE & IN VESTMENT CO. LTD. IS NOT A TRADING LIABILITY. HOWEVER, PERUS AL OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE SHOWS THAT COPY OF LEDGER ACCOUNT FROM ASSESSMENT YEAR 2010-11 HAS BEE N SUBMITTED. AS ON 01.04.2009 OPENING BALANCE OF RS.1,35,31,000/- IS NOTICED. DURING APPEAL PROCEEDI NGS ASSESSEE WAS ASKED TO SUBMIT LEDGER ACCOUNT SINCE B EGINNING IN RESPECT OF ALL THE LIABILITIES WHICH WERE SHOWN OUTSTANDING. HOWEVER, ASSESSEE HAS SUBMITTED LEDGER ACCOUNT FROM ASSESSMENT YEAR 2010-11 AND NATURE OF THE OUTSTANDI NG LIABILITY IS NOT ASCERTAINABLE. ASSESSEE HAS ALSO C LAIMED TO HAVE SUBMITTED CONFIRMATIONS BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS OF ASSESSMENT YEAR 2013-14. A.O.'S NOTICE U/S 133(6) SHOWS THAT NINE QUERIES WERE RAIS ED, INCLUDING QUERY RELATING TO THE NATURE OF BALANCES OUTSTANDING. HOWEVER, IN REPLY ONLY THE COPY OF LED GER ACCOUNT SINCE ASSESSMENT YEAR 2010-11 HAVE BEEN SUBMITTED. ANOTHER IMPORTANT ASPECT IS THAT A.O. HAD ISSUED LETTER ON 07.03.2016 AND A LETTER CLAIMING TO BE FROM M/S BASANTI FINANC E & INVESTMENT CO. LTD. HAS BEEN SUBMITTED ON 15.03.201 6, WHICH SHOWS THE SAME ADDRESS WHICH WAS NOT FOUND TO BE CO RRECT DURING ASSESSMENT PROCEEDINGS FOR ASSMT. YEAR 2011- 12. FURTHER IF ASSESSEE WAS ABLE TO CONTACT THE OTHER P ARTY IN MARCH, 2016, THEN ASSESSEE COULD HAVE PROVIDED THE CORRECT ADDRESS AND CONTACT DETAILS OF THE PARTY IN APPEAL PROCEEDINGS. HOWEVER, THIS HAS NOT BEEN DONE. UNDER THE ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 4 CIRCUMSTANCES AMOUNT OF RS.1,35,31,000/- IS TAKEN A S TRADING LIABILITY AND IT WOULD BE DEALT IN THE SAME MANNER AS TRADING LIABILITIES FROM OTHER PARTIES. ASSESSEE HAS SUBMITTED COPY OF A LETTER FROM SHREE MAHALAXMI TRADING & INVESTMENT CO. PVT. LIMITED DAT ED 19.03.2018. ALONG WITH THE LETTER, LEDGER ACCOUNT O F THE TRANSACTIONS IN THE BOOKS OF ACCOUNTS OF SHREE MAHA LAXMI TRADING & INVESTMENT CO. PVT. LTD. HAVE ALSO BEEN S UBMITTED. HERE AGAIN OLD ADDRESS OF THE PARTY IS INDICATED ON THE LETTER HEAD WHICH WAS NOT FOUND TO BE CORRECT BY THE POSTA L AUTHORITIES. APPELLANT HAS NOT PROVIDED THE CORRECT ADDRESS OR THE CONTACT DETAILS OF THIS PARTY AS WELL. FROM SHRI BIMAL KUMAR JHANWAR [HUF] A LETTER HAS BEEN SUBMITTED WHICH MENTIONED THAT IT HAD SOLD JUT E TO THE ASSESSEE ON BEHALF OF ITS PRINCIPAL. BUT NAMES AND CONTACT DETAILS OF THE PRINCIPAL HAS NOT BEEN GIVEN. NEITHE R IT IS CLARIFIED AS TO WHY NOTHING WAS INFORMED ABOUT THE OUTSTANDING LIABILITY OF THE ASSESSEE WHEN THE A.A. HAD ENQUIRED ABOUT IT. A CONFIRMATION LETTER ALONG WITH LEDGER ACCOUNT HAS ALSO BEEN SUBMITTED FROM M/S DAGA TRADING CO. HOWEV ER, PERUSAL OF THE LEDGER ACCOUNT SHOWS THAT M/S DAGA T RADING CO. HAD RECEIVED ALL PAYMENTS AND NOTHING WAS OUTST ANDING. IN VIEW OF THE FACTS MENTIONED ABOVE AUTHENTICITY O F THE DOCUMENTS ARE DOUBTFUL. THESE DOCUMENTS ARE SELF SE RVING DOCUMENTS. HENCE THESE CANNOT BE TAKEN COGNIGENCE O F. AS MENTIONED IN THE ASSESSMENT ORDER, A.O. HAD CONDUCT ED PROPER ENQUIRIES. TWO OF THE CREDITORS WERE NOT TRACEABLE AND THE OTHER TWO CONFIRMED THAT NOTHING WAS OUTSTANDING IN THEIR TRANSACTIONS WITH THE APPELLANT. HENCE ASSESSEE'S C ONTENTIONS ARE NOT ACCEPTABLE. 4. FOR THE REASONS GIVEN ABOVE AND BY RELYING, INTE R ALIA, ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF DALMIA (P) LIMITED VS.- CIT [348 ITR 469] AS WELL AS THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF RAMA STEEL ROLLING MILLS AND GENERAL ENGINEERING WORKS VS.- ITO [35 TAXMANN.COM 262], T HE LD. CIT(APPEALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R ON THIS ISSUE UNDER SECTION 41(1) OF THE ACT. 5. THE LD. COUNSEL FOR THE ASSESSEE BESIDES RELYING ON THE LETTER OF M/S. BASANTI FINANCE & INVESTMENT CO. LIMITED SUBMI TTED DURING THE ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 5 COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2010-11 ( COPY PLACED AT PAGE NO. 58 OF THE PAPER BOOK), ALSO INVITED OUR ATTENTI ON TO THE RELEVANT LEDGER ACCOUNT PLACED AT PAGE NO. 56 TO SHOW THAT T HE AMOUNT OF RS.1,35,51,000/- WAS RECEIVED BY THE ASSESSEE FROM M/S. BASANTI FINANCE & INVESTMENT CO. LIMITED AS ADVANCE. HE CONTENDED T HAT THE SAID LIABILITY THUS DID NOT REPRESENT ANY AMOUNT CLAIMED AS DEDUCT ION BY THE ASSESSEE AND SECTION 41(1) HAS NO APPLICATION. HE CONTENDED THAT THE ASSESSING OFFICER CAN VERIFY THIS POSITION AND ALLOW APPROPRI ATE RELIEF TO THE ASSESSEE. 6. AS REGARDS THE AMOUNT PAYABLE TO M/S. SHREE MAHA LAXMI TRADING & INVESTMENT CO. LIMITED, HE AGAIN RELIED ON THE SIMI LAR LETTER FILED BY THE SAID PARTY DURING THE COURSE OF ASSESSMENT PROCEEDI NGS FOR A.Y. 2010-11 TO SUPPORT THE ASSESSEES CLAIM THAT THE SAID TRADI NG LIABILITY WAS VERY MUCH INEXISTENCE AND THERE WAS NOTHING BROUGHT ON R ECORD BY THE ASSESSING OFFICER TO SHOW THAT THE SAID LIABILITY H AD CEASED TO EXIST DURING THE YEAR UNDER CONSIDERATION. HE CONTENDED THAT THE RE WAS A FAMILY DISPUTE WHICH KEPT THE SAID LIABILITY OUTSTANDING A ND THE ONUS THAT LAY ON THE ASSESSING OFFICER TO SHOW THAT THE SAID LIABILI TY HAD CEASED TO EXIST DURING THE YEAR UNDER CONSIDERATION WAS NOT DISCHAR GED BY HIM. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISI ON OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SRI NASIR AHM ED VS.- ITO (ITA NO. 2518/KOL/2013 DATED 03.06.2016), WHEREIN IT WAS HEL D THAT INCOME CANNOT BE BROUGHT TO TAX UNDER SECTION 41(1) OF THE ACT UNTIL AND UNLESS THE TRADING LIABILITY IS CEASED TO EXIST IN THE BOO KS OF ACCOUNT OF THE ASSESSEE. HE ALSO RELIED ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF CIT VS.- SUGAULI SUGAR WORKS PVT. LIMI TED [236 ITR 518], WHEREIN IT WAS EXPLAINED THAT CESSATION OF THE LIAB ILITY MAY OCCUR EITHER BY REASON OF THE OPERATION OF LAW, THAT IS, ON THE LIABILITY BECOMING UNENFORCEABLE AT LAW BY THE CREDITOR AND THE DEBTOR DECLARING UNEQUIVOCALLY HIS INTENTION NOT TO HONOUR HIS LIABI LITY WHEN PAYMENT IS DEMANDED BY THE CREDITOR OR A CONTRACT BETWEEN THE PARTIES, OR BY ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 6 DISCHARGE OF THE DEBT- THE DEBTOR MAKING PAYMENT TH EREOF TO HIS CREDITOR. HE CONTENDED THAT THE CASE LAWS RELIED UPON BY THE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER ARE DISTINGUISHABLE ON FACTS. HE SUB MITTED THAT THE CASE OF DALMIA (P) LIMITED VS.- CIT & ANOTHER [348 ITR 469] FOR INSTANCE RELIED UPON BY THE LD. CIT(APPEALS) WAS DECIDED BY THE HONBLE DELHI HIGH COURT ON THE PRELIMINARY ISSUE OF VALIDITY OF REOPE NING OF ASSESSMENT AND NOT ON THE APPLICABILITY OF SECTION 41(1) OF THE AC T. HE SUBMITTED THAT IN THE CASE OF RAMA STEEL ROLLING MILLS AND GENERAL EN GINEERING WORKS (SUPRA), THE MATTER RELATING TO THE ADDITION UNDER SECTION 41(1) WAS REMITTED BY THE TRIBUNAL TO THE ASSESSING OFFICER F OR DECIDING THE SAME AFRESH AS PER THE SPECIFIC DIRECTIONS AND THE APPEA L FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL WAS DISMISSED BY THE HONBLE RAJASTHAN HIGH COURT HOLDING THAT THERE WAS NO SUBSTANCIAL QU ESTION OF LAW THAT AROSE FOR CONSIDERATION REGARDING THE EFFECT OF SEC TION 41(1). 7. THE LD. D.R., ON THE OTHER HAND, STRONGLY RELIED ON THE ORDER OF THE ASSESSING OFFICER AS WELL AS THAT OF THE LD. CIT(AP PEALS) IN SUPPORT OF THE REVENUES CASE ON THIS ISSUE. HE CONTENDED THAT THE CONCERNED PARTIES WERE NOT FOUND TO BE INEXISTENCE AT THE ADDRESSES G IVEN BY THE ASSESSEE AND SINCE THE ASSESSEE ALSO FAILED TO PROVE THE EXI STENCE OF THE LIABILITIES PAYABLE TO THE SAID PARTIES BY BRINGING ANY RELEVAN T EVIDENCE ON RECORD OR BY PRODUCING THE CONCERNED PARTIES FOR VERIFICATION , THE AMOUNTS PAYABLE TO THEM WERE RIGHTLY TREATED BY THE ASSESSING OFFIC ER AS THE LIABILITIES WHICH HAD EXIST. HE CONTENDED THAT THE EVIDENCE PRO DUCED BY THE ASSESSEE IN THE FORM OF LETTERS SUBMITTED BY THE CONCERNED P ARTIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE IMMEDIATEL Y PRECEDING YEAR, I.E. A.Y. 2010-11 WAS NOT RELIABLE AS POINTED OUT BY THE ASSESSING OFFICER AND SINCE THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) WAS ALSO NOT FOUND RELIABLE, THE ADDIT ION MADE BY THE ASSESSING OFFICER UNDER SECTION 41(1) WAS RIGHTLY C ONFIRMED BY THE LD. CIT(APPEALS). ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 7 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS T HE LIABILITY STANDING IN THE NAME OF M/S. BASANTI FINANCE & INVESTMENT CO. L IMITED, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE SAM E REPRESENTED AN ADVANCE RECEIVED BY THE ASSESSEE AND SINCE THE SAME WAS NOT CLAIMED BY THE ASSESSEE AS DEDUCTION WHILE COMPUTED THE INCOME FOR THE YEAR UNDER CONSIDERATION OR ANY OF THE EARLIER YEARS, WE FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE SAME C ANNOT BE TREATED AS INCOME BY INVOKING THE PROVISIONS OF SECTION 41(1) OF THE ACT. HOWEVER, KEEPING IN VIEW THAT THIS CLAIM IS MADE BY THE ASSE SSEE SPECIFICALLY FOR THE FIRST TIME BEFORE THE TRIBUNAL, WE CONSIDER IT JUST AND PROPER TO GIVE AN OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY T HE SAME. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO VERIFY THIS CLAIM OF THE ASSESSEE FROM THE RELEVANT RECORD AND DECIDE THE IS SUE AFRESH IN ACCORDANCE WITH LAW. 9. AS REGARDS THE LIABILITY STANDING IN THE NAME OF M/S. SHREE MAHALAXMI TRADING & INVESTMENT CO. LIMITED, IT IS O BSERVED FROM THE COPY OF THE RELEVANT LEDGER ACCOUNT PLACED AT PAGE NOS. 66 TO 68 OF THE PAPER BOOK THAT THE SAID PARTY WAS A SUPPLIER TO TH E ASSESSEE AND THE AMOUNT PAYABLE TO THEM REPRESENTED THE TRADING LIAB ILITY OF THE ASSESSEE. AS PER THE CONFIRMATION DATED 01.04.2011 PLACED AT PAGE NO. 69 OF THE ASSESSEES PAPER BOOK, THE AMOUNT OF RS.86,58,069/- PAYABLE TO THE SAID PARTY WAS DULY CONFIRMED BY THE SAID PARTY AND EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2010-11, A LETTER D ATED 19.03.2013 WAS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER CONFIRMING THE AMOUNT RECEIVABLE FROM THE ASSESSEE. KEEPING IN VIEW THIS DOCUMENTARY EVIDENCE PLACED ON RECORD BY THE ASSESSEE, WE ARE OF THE VIE W THAT THE LIABILITY STANDING IN THE NAME OF M/S. SHREE MAHALAXMI TRADIN G & INVESTMENT CO. LIMITED COULD NOT BE TREATED AS CEASED TO HAVE EXIS TED DURING THE YEAR UNDER CONSIDERATION, ESPECIALLY WHEN NOTHING WAS BR OUGHT ON RECORD BY THE ASSESSING OFFICER TO CONCLUSIVELY PROVE THE CES SATION OF LIABILITY ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 8 DURING THE YEAR UNDER CONSIDERATION. THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF CIT VS.- SUGAULI SUGAR WORKS PVT. LIMITED (SUPRA) RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE SUP PORTS THIS VIEW, WHEREIN IT WAS HELD THAT THE CESSATION OF THE LIABI LITY MAY OCCUR EITHER BY REASON OF THE OPERATION OF LAW I.E. ON THE LIABILIT Y BECOMING UNENFORCEABLE AT LAW BY THE CREDITOR AND THE DEBTOR DECLARING UNE QUIVOCALLY HIS INTENTION NOT TO HONOUR HIS LIABILITY WHEN PAYMENT IS DEMANDED BY THE CREDITOR. SINCE THIS SITUATION IS NOT OCCURRED IN T HE PRESENT CASE, WE HOLD THAT THE ADDITION OF RS.86,58,069/- MADE BY THE ASS ESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) BY TREATING THE L IABILITY STANDING IN THE NAME OF M/S. SHREE MAHALAXMI TRADING & INVESTMENT C O. LIMITED BY INVOKING THE PROVISION OF SECTION 41(1) IS NOT SUST AINABLE. WE ACCORDINGLY DELETE THE SAME. GROUND NO. 1 OF THE ASSESSEES APP EAL IS ACCORDINGLY TREATED AS ALLOWED. 10. THE ISSUE INVOLVED IN GROUND NO. 2 RELATES TO T HE ADDITION OF RS.18,36,091/- MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(APPEALS) BY TREATING THE AMOUNT PAYABLE BY ASSE SSEE TO BHIKAM CHAND JHAWAR(HUF) AS CEASED TO HAVE EXISTED AS PER SECTION 41(1) OF THE ACT. 11. THE LIABILITY OF RS.18,36,091/- WAS SHOWN BY TH E ASSESSEE IN THE NAME OF BHIKAM CHAND JHAWAR(HUF) AS ON 31.03.2011. IN ORDER TO VERIFY THE SAME, A NOTICE WAS ISSUED BY THE ASSESSING OFFI CER AT THE ADDRESS OF THE SAID PARTY AS GIVEN BY THE ASSESSEE. THE SAME, HOWEVER, WAS RETURNED BACK WITH THE POSTAL REMARKS NOT KNOWN. WHEN THIS POSITION WAS BROUGHT BY THE ASSESSING OFFICER TO THE NOTICE OF T HE ASSESSEE, A NEW ADDRESS OF THE SAID PARTY WAS PROVIDED BY THE ASSES SEE. IN ORDER TO MAKE THE VERIFICATION AT THE SAID NEW ADDRESS, INSPECTOR OF THE DEPARTMENT WAS DEPUTED BY THE ASSESSING OFFICER. AS REPORTED BY TH E SAID INSPECTOR TO THE ASSESSING OFFICER, HE FAILED TO LOCATE ANY SUCH PAR TY EVEN AT THE NEW ADDRESS GIVEN BY THE ASSESSEE AFTER A LONG EFFORT. THE ASSESSING OFFICER, ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 9 THEREFORE, TREATED THE LIABILITY STANDING IN THE NA ME OF BHIKAM CHAND JHAWAR(HUF) AS CEASED TO HAVE EXISTED AND ADDITION OF RS.18,36,091/- WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 41(1) OF THE ACT. ON APPEAL, THE LD. CIT(APPEALS) CONFIRM ED THE SAID ADDITION MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVI SION OF SECTION 41(1). 12. THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR AT TENTION TO THE COPY OF THE LEDGER ACCOUNT OF BHIKAM CHAND JHAWAR(HUF) AS M AINTAINED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE TO SHOW THAT THE S AID PARTY WAS REGULAR SUPPLIER OF THE ASSESSEE AND THE AMOUNT PAYABLE TO THEM REPRESENTED A TRADING LIABILITY OF THE ASSESSEE. HE CONTENDED THA T THE ASSESSEE WAS VERY MUCH LIABLE TO PAY THE AMOUNT IN QUESTION TO THE SA ID PARTY AND THE SAME WAS APPEARING IN THE LIST OF SUNDRY CREDITORS OF TH E ASSESSEE AS ON 31.03.2011. 13. THE LD. D.R., ON THE OTHER HAND, STRONGLY RELIE D ON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE REVENUES CASE ON THIS ISSUE. HE SUBMITTED THAT NO CONFIRMATION WHATSOEVER WAS FILED BY THE ASSESSEE FROM THE CONCERNED PARTY TO SHOW THE EXISTENCE OF T HE LIABILITY AS CLAIMED BY IT AND SINCE THE ENQUIRY CONDUCTED BY THE ASSESS ING OFFICER WAS SUFFICIENT TO SHOW THE NON-EXISTENCE OF THE PARTY A S WELL AS THE CORRESPONDING LIABILITY, IT WAS RIGHTLY ADDED UNDER SECTION 41(1) OF THE ACT. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE LEDGER ACCOUNT OF BHIKAM CHAND JHAWAR(HUF) AS MAINTAINED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE (COPY AT PAGE NOS. 86 TO 90 OF THE PAPER B OOKS) SHOWS THAT THE SAID PARTY HAD REGULAR BUSINESS TRANSACTIONS WITH T HE ASSESSEE UPTO AUGUST, 2009. BUT THERE WAS NO SUCH TRANSACTION FOR THE PERIOD FROM SEPTEMBER, 2009 TO MARCH, 2011. ALTHOUGH THE ASSESS EE CLAIMED THAT AN AMOUNT OF RS.18,36,091/- WAS PAYABLE TO THE SAID PA RTY AS ON 31.03.2011, ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 10 THERE IS NOTHING ON RECORD TO SHOW THAT THE SAID AM OUNT WAS EVER CLAIMED BY THE SAID PARTY FROM THE ASSESSEE. EVEN THE CONF IRMATION OF THE SAID PARTY WAS NEVER FILED BY THE ASSESSEE TO SHOW THE E XISTENCE OF THE LIABILITY AS CLAIMED BY IT. ON THE OTHER HAND, THE ENQUIRY CONDUCTED BY THE ASSESSING OFFICER AT THE ADDRESS OF THE SAID PARTY AVAILABLE ON RECORD AS WELL AS THE NEW ADDRESS PROVIDED BY THE ASSESSEE RE VEALED THAT THE PARTY WAS NOT INEXISTENCE AT THE SAID ADDRESS AND EVEN TH E ASSESSEE FAILED TO ESTABLISH ON EVIDENCE THE EXISTENCE OF THE SAID PAR TY OR THE EXISTENCE OF THE LIABILITY IN THE NAME OF THE SAID PARTY AS CLAI MED. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE WAS ASKED BY THE BENCH TO SHOW ANY DOCUMENTARY EVIDENCE WHEREBY THE AMOUNT IN QUES TION WAS EVER DEMANDED BY BHIKAM CHAND JHAWAR(HUF). HE, HOWEVER, HAS FAILED TO SHOW ANY SUCH EVIDENCE. ON THE OTHER HAND, HE HAS A DMITTED THAT THE AMOUNT IN QUESTION IS STILL NOT PAID BY THE ASSESSE E TO THE SAID PARTY EVEN AFTER A PERIOD OF MORE THAN EIGHT YEARS AND THE SAM E IS STILL SHOWN AS OUTSTANDING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE . KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE O F THE VIEW THAT THE LIABILITY IN QUESTION WAS RIGHTLY TREATED BY THE AS SESSING OFFICER AS CEASED TO HAVE EXISTED AND THE LD. CIT(APPEALS) IS FULLY J USTIFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE UNDER SECTION 41(1) OF THE ACT. WE ACCORDINGLY UPHOLD THE IMPUGNE D ORDER OF THE LD. CIT(APPEALS) AND DISMISS GROUND NO. 2 OF THE ASSESS EES APPEAL. 15. THE ISSUE RAISED IN GROUND NO. 3 RELATES TO THE ADDITION OF RS.17,99,020/- MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF TRADING LIABILITY PAYABL E TO M/S. DAGA TRADING COMPANY BY TREATING THE SAME AS INCOME OF THE ASSES SEE UNDER SECTION 41(1) OF THE ACT. 16. A LIABILITY OF RS.17,99,020/- WAS SHOWN BY THE ASSESSEE IN THE NAME OF M/S. DAGA TRADING COMPANY AS ON 31.03.2011. IN O RDER TO VERIFY THE SAME, A NOTICE UNDER SECTION 133(6) WAS ISSUED BY T HE ASSESSING OFFICER. ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 11 IN REPLY TO THE SAID NOTICE, IT WAS SUBMITTED BY M/ S. DAGA TRADING COMPANY THAT IT WAS A COMMISSION AGENT AND THE BOOK S OF ACCOUNT HAVING BEEN MAINTAINED ON CASH BASIS, THERE WAS NO OPENING OR CLOSING BALANCE SHOWN IN RESPECT OF THE ASSESSEE. THE COPY OF LEDGE R ACCOUNT OF THE ASSESSEE AS MAINTAINED IN ITS BOOKS OF ACCOUNT WAS ALSO FURNISHED BY M/S. DAGA TRADING COMPANY SHOWING NO BALANCE RECEIVABLE FROM THE ASSESESE AS ON 31.03.2011. RELYING ON THE SAID LEDGER ACCOUN T, THE ASSESSING OFFICER CONCLUDED THAT THE LIABILITY SHOWN BY THE A SSESESE IN THE NAME OF M/S. DAGA TRADING COMPANY WAS NO MORE IN EXISTENCE AND ACCORDINGLY AN ADDITION OF RS.17,99,020/- WAS MADE BY HIM TO THE T OTAL INCOME OF THE ASSESSEE UNDER SECTION 41(1) OF THE ACT. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID ADDITION. 17. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES O N THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. IT IS OBSERVED THAT THE LETTER DATED 25.02.2014 WAS SUBMITTED BY M/S. D AGA TRADING COMPANY IN RESPONSE TO THE NOTICE ISSUED BY THE ASSESSING O FFICER UNDER SECTION 133(6) OF THE ACT DURING THE COURSE OF ASSESSMENT P ROCEEDINGS AND A PERUSAL OF THE SAME (COPY PLACED AT PAGE NO. 91 OF THE PAPER BOOK) SHOWS THAT THE TRANSACTIONS WITH THE ASSESSEE-COMPANY WER E ACCEPTED BY THE SAID PARTY AND THE REASON FOR NOT SHOWING THE AMOUN T IN QUESTION AS RECEIVABLE FROM THE ASSESSEE WAS ALSO GIVEN BY STAT ING THAT THE SAID PARTY BEING A COMMISSION AGENT WAS MAINTAINING THE BOOKS OF ACCOUNT ON CASH BASIS. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSE SSEE, AN AMOUNT OF RS.17,99,020/- SHOWN AS PAYABLE BY THE ASSESSEE TO THE SAID PARTY AS ON 31.03.2011 WAS PAID THROUGH PROPER BANKING CHANNEL IN THE MONTH OF JUNE, 2012 AND THE RECEIPT OF THE SAME WAS DULY ACK NOWLEDGED BY THE SAID PARTY AS PER THE CONFIRMATION OF ACCOUNT PLACED AT PAGE NO. 97 OF THE PAPER BOOK. A SEPARATE CONFIRMATION LETTER WAS ALSO ISSUED BY THE SAID PARTY TO SHOW THAT THE AMOUNT OF RS.17,99,020/- IN QUESTION WAS RECEIVABLE FROM THE ASSESSEE-COMPANY TOWARDS INVOIC ES RAISED IN THE MONTH OF AUGUST, 2009 AND THE SAME WAS OUTSTANDING AS ON 31.03.2012. ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 12 KEEPING IN VIEW THIS DOCUMENTARY EVIDENCE PLACED ON RECORD AND HAVING REGARD TO THE FACT THAT THE LIABILITY IN QUESTION W AS SETTLED BY THE ASSESSEE SUBSEQUENTLY THROUGH PROPER BANKING CHANNEL, WHICH WAS DULY ACKNOWLEDGED BY M/S. DAGA TRADING COMPANY, WE ARE O F THE VIEW THAT THE EXISTENCE OF THE LIABILITY IN QUESTION WAS DULY EST ABLISHED BY THE ASSESSEE AND IN THE ABSENCE OF ANYTHING BROUGHT ON RECORD BY THE ASSESSING OFFICER TO PROVE OTHERWISE, THE ADDITION MADE BY HIM UNDER SECTION 41(1) AND CONFIRMED BY THE LD. CIT(APPEALS) IS NOT SUSTAINABL E. WE ACCORDINGLY DELETE THE SAID ADDITION AND ALLOW GROUND NO. 3 OF THE ASSESSEES APPEAL. 18. THE ISSUE RAISED IN GROUND NO. 4 RELATES TO THE ADDITIONS OF RS.46,87,982/- AND RS.36,11,432/- MADE BY THE ASSES SING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF THE AMOUNTS PAYABLE TO M/S. BIMAL KUMAR JHANWAR (HUF) AND BIMAL KUMAR JHAN WAR RESPECTIVELY. 19. THE ASSESSEE HAD SHOWN TRADING LIABILITIES OF R S.46,87,982/- AND RS.33,65,484/- IN THE NAME OF M/S. BIMAL KUMAR JHAN WAR (HUF) AND BIMAL KUMAR JHANWAR RESPECTIVELY AS ON 31.03.2011. IN RESPONSE TO THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT, THE SAID PARTIES CONFIRMED THE TRANSACTIONS MADE WITH THE ASSESSEE-COMPANY. TH EY ALSO STATED IN THEIR REPLY THAT THEY WERE DEALING WITH THE ASSESSE E-COMPANY AS COMMISSION AGENT AND THE COPIES OF LEDGER ACCOUNTS OF THE ASSESSEE AS MAINTAINED IN THEIR BOOKS WERE ALSO FURNISHED. AS R EVEALED FROM THE SAID LEDGER ACCOUNTS, NO AMOUNT WAS SHOWN AS RECEIVABLE FROM THE ASSESSEE- COMPANY BY THE SAID PARTIES AS ON 31.03.2011. THE A SSESSING OFFICER, THEREFORE, PRESUMED THAT THE AMOUNTS IN QUESTION SH OWN AS PAYABLE BY THE ASSESSEE TO THE SAID PARTIES AGAINST PURCHASES WAS PAID BY THE ASSESSEE-COMPANY FROM ITS CONCEALED INCOME AND BY T REATING THE SAID PURCHASES AS UNEXPLAINED, HE MADE ADDITIONS OF RS.4 6,87,982/- AND RS.36,11,430/- TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 69C OF THE ACT. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SAID ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING THAT THE ASSE SSEE HAS EITHER INFLATED ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 13 THE PURCHASES MADE FROM THE SAID PARTIES OR HAS MAD E PAYMENTS TO THE SAID PARTIES FROM UNDISCLOSED SOURCES. 20. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES O N THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ADDITIONS O N THIS ISSUE WERE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. C IT(APPEALS) ON THE BASIS OF SURMISES AND CONJECTURES. HE HAS SUBMITTED THAT THE CORRESPONDING PURCHASES HAVING BEEN RECORDED BY THE ASSESSEE-COMPANY IN ITS BOOKS OF ACCOUNT AND THE AMOUNT PAYABLE AGAI NST THE SAID PURCHASES HAVING BEEN SHOWN AS LIABILITY, THERE WAS NO QUESTI ON OF TREATING THE SAID PURCHASES AS UNEXPLAINED EXPENDITURE. HE HAS CONTEN DED THAT THE ASSESSEE IN ANY CASE HAS MADE PAYMENTS AGAINST THE SAID PURCHASES TO THE CONCERNED PARTIES THROUGH PROPER BANKING CHANNEL IN THE SUBSEQUENT YEAR AND THE SAID PARTIES HAVING DULY ACKNOWLEDGED THE R ECEIPT OF THE SAME, THE ADDITION MADE BY THE ASSESSING OFFICER AND CONF IRMED BY THE LD. CIT(APPEALS) ON THIS ISSUE IS NOT SUSTAINABLE. THE LD. D.R., ON THE OTHER HAND, HAS CONTENDED THAT AN OPPORTUNITY MAY BE GIVE N TO THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE OF HAVI NG MADE THE PAYMENTS OF THE AMOUNTS IN QUESTION TO THE CONCERNED PARTIES IN THE SUBSEQUENT YEARS. WE FIND MERIT IN THIS CONTENTION OF THE LD. D.R. AN D SINCE THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO NOT RAISED ANY OBJECTION IN THIS REGARD, WE RESTORE THIS MATTER TO THE FILE OF THE ASSESSING OF FICER FOR DECIDING THE SAME AFRESH AFTER VERIFYING THE CLAIM OF THE ASSESS EE THAT THE AMOUNTS IN QUESTION HAVE BEEN DULY PAID THROUGH BANKING CHANNE L TO THE CONCERNED PARTIES IN THE SUBSEQUENT YEARS. IF THE AMOUNT IS F OUND TO HAVE BEEN PAID BY THE SAID PARTIES AS CLAIMED BY THE LD. COUNSEL F OR THE ASSESSEE, THE ASSESSING OFFICER SHALL DELETE THE ADDITION MADE TO THE TOTAL INCOME OF THE ASSESSEE ON THIS ISSUE. GROUND NO. 4 OF THE ASSESSE ES APPEAL IS ACCORDINGLY TREATED AS ALLOWED. ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 14 21. AS REGARDS THE ISSUE RAISED IN GROUND NO. 5 OF THE ASSESSEES APPEAL RELATING TO THE ADDITION OF RS.1,82,03,626/- MADE B Y THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF PROVISION MADE FOR GRATUITY PAYABLE WHILE COMPUTING THE BOOK PROFIT O F THE ASSESSEE UNDER SECTION 115JB OF THE ACT BY TREATING THE SAME AS UN ASCERTAINED LIABILITY, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE SAID AMOUNT ACTUALLY DID NOT REPRESENT ANY PROVISION MADE FOR A NY LIABILITY BY THE ASSESSEE BUT IT WAS PAID ON ACCOUNT OF GRATUITY TO THE EMPLOYEES, WHO HAD ACTUALLY RETIRED DURING THE YEAR UNDER CONSIDERATIO N. HE HAS CONTENDED THAT THE AMOUNT IN QUESTION THUS REPRESENTED THE PR OVISION MADE FOR THE ASCERTAINED LIABILITY ON ACCOUNT OF GRATUITY PAYABL E TO THE EMPLOYEES, WHO RETIRED FROM SERVICE IN THE YEAR UNDER CONSIDER ATION AND THE SAME, THEREFORE, CANNOT BE ADDED WHILE COMPUTING THE BOOK PROFIT OF THE ASSESSEE-COMPANY UNDER SECTION 115JB OF THE ACT. IN OUR OPINION, THIS MATTER ALSO REQUIRES VERIFICATION BY THE ASSESSING OFFICER KEEPING IN VIEW THE CONTRARY FINDINGS RECORDED BY THE AUTHORITIES B ELOW TO THE EFFECT THAT THERE WAS NO EVIDENCE PRODUCED BY THE ASSESSEE TO P ROVE THAT THE AMOUNT IN QUESTION WAS A PROVISION MADE FOR ASCERTAINED LI ABILITY. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS ) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER FOR DECIDING THE SAME AFRESH AFTER GIVING PROPER AND SUFFICIENT OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND NO. 5 OF THE ASSESSEES APP EAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 22. NOW WE SHALL TAKE UP THE REVENUES APPEAL BEING ITA NO. 572/KOL/2017 . AS REGARDS THE ISSUE RAISED IN GROUND NO. 1 OF TH IS APPEAL RELATING TO THE DELETION BY THE LD. CIT(APPE ALS) OF THE ADDITION OF RS.1,11,48,812/- MADE ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS P.F. AND ESIC, IT IS OBSERVED THAT THIS DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THA T THE EMPLOYEES CONTRIBUTION TOWARDS P.F. AND ESIC WAS DEPOSITED BY THE ASSESSEE BEYOND THE DUE DATES PRESCRIBED IN THE RELEVANT STATUTES. THE LD. CIT(APPEALS), ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 15 HOWEVER, FOUND THAT THE PAYMENTS TOWARDS EMPLOYEES CONTRIBUTION ON ACCOUNT OF P.F. AND ESIC WERE MADE BEYOND THE DUE D ATE PRESCRIBED IN THE RELEVANT STATUTES BUT BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. A CCORDINGLY RELYING, INTER ALIA, ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS.- ALOMS EXTRUSIONS LIMITED [185 TAXMAN 416] AN D THAT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS.- VIJAY SHREE LIMITED (ITA NO. 245 OF 2011 DATED 06.09.2011), HE DELETED THE ADDIT ION MADE BY THE ASSESSING OFFICER ON THIS ISSUE. 23. AT THE TIME OF HEARING BEFORE US, THE LD. REPRE SENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THIS ISSUE IS SQUARELY COVER ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF CIT VS.- ALOMS EXTRUSIONS LIMITED [185 TAXMAN 416] AN D THAT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS.- VIJAY SHREE LIMITED (ITA NO. 245 OF 2011 DATED 06.09.2011). ACCORDINGLY WE R ESPECTFULLY FOLLOW THE SAID JUDICIAL PRONOUNCEMENTS AND UPHOLD THE IMP UGNED ORDER OF THE LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESSEE ON T HIS GROUND. GROUND NO. 1 OF THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. 24. THE ISSUE RAISED IN GROUND NO. 2 OF THE REVENUE S APPEAL RELATES TO THE DELETION BY THE LD. CIT(APPEALS) OF THE DISALLO WANCE OF RS.21,59,862/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ASSESSE ES CLAIM FOR ADDITIONAL DEPRECIATION ON NEW PLANT AND MACHINERY. 25. THE ADDITIONAL DEPRECIATION OF RS.21,59,862/- C LAIMED BY THE ASSESSEE WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAME WAS CLAIMED IN RESPECT OF CERTAIN PARTS OF PLA NT AND MACHINERY, WHICH COULD NOT FUNCTION ON ITS OWN AS PLANT AND MA CHINERY. THE LD. CIT(APPEALS), HOWEVER, FOUND THAT A SIMILAR ISSUE W AS DECIDED BY THE CHANDIGARH BENCH OF THIS TRIBUNAL IN FAVOUR OF THE ASSESSEE IN THE CASE OF ADARSH STEEL ROLLING MILLS VS.- DCIT (ITA NO. 523/ CHD/2013) AND ITA NOS. 572/KOL/2017 & 1774/KOOL/2017 ASSESSMENT YEAR: 20 11-2012 M /S. LOOMTEX ENGINEERING PVT. LIMITED 16 FOLLOWING THE SAME, HE DIRECTED THE ASSESSING OFFIC ER TO ALLOW ADDITIONAL DEPRECIATION ON THE PARTS OF THE PLANT AND MACHINER Y, WHICH WERE ALREADY INSTALLED. AT THE TIME OF HEARING BEFORE US, NO CAS E LAW TAKING CONTRARY VIEW IN FAVOUR OF THE REVENUE ON THIS ISSUE HAS BEE N CITED BY THE LD. D.R. WE, THEREFORE, RESPECTFULLY FOLLOW THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ADARSH STEEL ROLLING M ILLS (SUPRA) AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ALLOWING THE CLAIM OF THE ASSESSEE FOR ADDITIONAL DEPRECIATION. GROUND NO. 2 OF THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. 26. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED, WHILE THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 09, 20 19. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER V ICE-PRESIDENT (KZ) KOLKATA, THE 9 TH DAY OF AUGUST, 2019 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, 7 TH FLOOR, ROOM NO. 20, KOLKATA-700 069 (2) M/S. LOOMTEX ENGINEERING PVT. LIMITED, HOLYNEST APARTMENTS, 14B, RANI RASHMONI ROAD, KOLKATA-700 035 (3) COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLKA TA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.