ITO, CHENNAI V. Shri C.S.Manohar, CHENNAI

ITA 1816/CHNY/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0891 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-01-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 04-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIDISHA KALRA
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained cash credit; Period of limitation; Source of fund; Time period of passing order
• Section: 143(3); 142(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ------- ITA NO. 1816/MDS/2009 ASSESSMENT YEAR : 2006-07 THE INCOME TAX OFFICER, WARD-I(4), CHENNAI. V. SHRI C.S. MANOHAR, 31, NATESAN STREET, T. NAGAR, CHENNAI-600 017. (PAN : AAMPM7971J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIDISHA KALRA, CIT-DR RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE DATE OF HEARING : 17.0 1.2013 DATE OF PRONOUNCEMENT : 31.01.201 3 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE CIT(APPEALS)-VI, CHENNAI DATED 07-05-2009 FO R THE ASSESSMENT YEAR 2006-07. ITA NO.1816/MDS/2009 : 2 : 2. FACTS IN BRIEF ARE THAT THE ASSESSEE HAD FILED A RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ADMITTING TO TAL INCOME OF ` 2,27,990/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 ('THE ACT' FOR SHORT). SUBSEQUENTLY, NOTICES U/S 143(3) AS WELL AS UNDER S ECTION 142(1) WERE ISSUED ALONG WITH DETAILED QUESTIONNAIR E. DETAILS WERE CALLED FOR VIDE NOTICE U/S 142(1) OF T HE ACT REQUIRING THE ASSESSEE TO THE DETAILS ON 18-06-2008 . THE LEARNED COUNSEL FOR THE ASSESSEE APPEARED AND SOUGH T FOR ADJOURNMENT AND THE CASE WAS POSTED FOR HEARING ON 25-07- 2008. ON 25-07-2998 NONE APPEARED ON BEHALF OF THE ASSESSEE. ON 18-08-2008 THE LEARNED COUNSEL FOR TH E ASSESSEE FILED PARTIAL DETAILS. THE ASSESSING OFFICER FURTH ER GAVE TIME TO FURNISH THE DETAILS UPTO 02-09-2008, BUT THEY WERE NOT FILED. THE CASE WAS AGAIN FIXED FOR HEARING ON 28-11-2008, 05-12- 2008, 10-12-2008 AND 17-12-2008. THE LEARNED COUNS EL FOR THE ASSESSEE SOUGHT TIME UPTO 18-12-2008. AGAIN T HE LEARNED COUNSEL FOR THE ASSESSEE DID NOT FILE DETAILS ON 18 -12-2008. THEREFORE, THE ASSESSING OFFICER PROCEEDED TO COMPL ETE THE ASSESSMENT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER OBSERVED THAT THE BALANCE SHEET OF THE ASSESSEES P ROPRIETARY ITA NO.1816/MDS/2009 : 3 : CONCERN M/S. MRR BUILDERS SHOWED SUNDRY CREDITOR OF ` 23,01,614.50P. THE ASSESSEE CLAIMED THAT THIS SUM REMAINED UNPAID SINCE 31-03-1996. THE DETAILS OF SUNDRY CRE DITOR WERE CALLED FOR FROM THE REPRESENTATIVE VIDE ORDER SHEET NOTING DATED 05-12-2008 AND THE DETAILS OR BREAK UP OF SUN DRY CREDITORS OF ` 23,01,614/-, IDENTITY, NAME AND ADDRESS, INCOME TAX RETURNS ALONG WITH STATEMENTS, SOURCE OF FUNDS AND THEIR CREDITWORTHINESS. THE DETAILS FILED BY THE ASSESSE E AS REPRODUCED BY THE ASSESSING OFFICER IN HIS ORDER AR E AS UNDER: 4. THE BREAK UP OF THE SUNDRY CREDITORS FILED ARE AS UNDER: SL. NO. NAME AMOUNT RS. 1. CHITRA MARALIDHAR 39,542.50 2. C.S. BHASKAR 1,11,585.05 3. C.S. DHINAKAR 81 ,585.05 4. C.S. MURALIDHAR 1,44,865.04 5. JANAKI CHITRAMBALAM 1,00,088. 94 6. MURUGAN HARDWARE 2,38,462.00 7. PANDIAN CLAVES 3,64,580.00 8. NELLAI HARDWARES 2,88,878.00 9. PANDIAN HARDWARES 1,85,466.00 10. S.A. AHMED & CO. 3,42,468.00 11. SENTHIL HARDWARE 22,368.00 12. VELAVAN HARDWARES 2,32,379.00 13. VIJAY TIMBERS 1,49,347.00 TOTAL 23,01,614.00 3. THE ASSESSING OFFICER OBSERVED THAT ON THE FACE OF THE DETAILS IT IS CLEAR THAT THE ITEMS FROM SERIAL NUMB ER 6 TO 13 ARE ITA NO.1816/MDS/2009 : 4 : TRADE CREDITORS IN THE BOOKS OF ASSESSEES PROPRIET ARY CONCERN M/S. MRR BUILDERS. THE ASSESSEE HAS NOT PRODUCED ACCOUNT BOOKS, ADDRESS OF THESE TRADE CREDITORS AND DETAILS AS TO SPECIFIC GROUND ON WHICH THESE CREDIT ORS ARE REMAINING UNPAID FOR SUCH LONG YEARS. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAS NOT PROVED THAT THESE TRADE CREDITORS ACTUALLY PERTAINED TO THE YEAR ENDED ON 31-03-1996 AND GENUINENESS OF THE TRADE CREDIT. THE TRADE CREDITO RS STOOD UNPAID SINCE 1996. IN THE NORMAL COURSE OF BUSINESS TRADE CREDITORS WOULD NOT BE OUTSTANDING F OR SUCH LONG YEARS AND ALSO UNDER THE LIMITATION ACT TH E TRADE CREDITORS CERTAINLY WOULD NOT HAVE ANY RIGHT TO RECOVER THESE SUMS PAYABLE BY THE ASSESSEE. BOTH UNDER THE NORMAL COURSE OF THE BUSINESS AND ALSO LEGALLY, THESE TRADE CREDITORS ARE NOT TO BE PAYABL E BY THE ASSESSEE AS THE LIMITATION PERIOD OF THREE YEAR S EXPIRED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2006-07, IF AT ALL THESE TRADE CREDITORS WERE TO BE GENUINE. UNDER THESE CIRCUMSTANCES, THE TRADE CREDITORS AMOUNTING TO ` `` ` ITA NO.1816/MDS/2009 : 5 : 18,23,948/- WERE TREATED BOTH AS NOT GENUINE AS WEL L AS LIABILITY CEASED TO EXIST U/S 41(1)(A) OF THE AC T. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(APPEALS) AND SUBMITTED THAT ALL THE ABOVE AMOUN TS ARE OPENING BALANCES AND THAT SECTION 41(1) OF THE ACT HAS NO APPLICATION. THE CIT(APPEALS) SIMPLY HELD AS UNDER : 3.5 I HAVE GONE THROUGH THE ASSESSMENT ORDER, GROUNDS OF APPEAL, COPIES OF LETTER DT. 09- 07-2008 AND 18-12-2008 FROM THE ASSESSEE ADDRESSED TO THE AO, FURNISHING A COPY OF BANK ACCOUNT, DETAILS OF FAMILY MEMBERS WITH PA NUMBERS, DETAILS OF INVESTMENTS IN MOVABLE/IMMOVABLE PROPERTY ETC. AND THE WRITTEN SUBMISSIONS. THERE IS FORCE IN THE ARGUMENT OF THE COUNSELS. I AM OF THE CONSIDERED OPINION THAT ADDITION MADE ON ACCOUNT OF TRADE CREDITORS IS TO BE DELETED. THE AO IS DIRECTED ACCORDINGLY. 5. ON BEING AGGRIEVED, THE REVENUE HAS COME UP IN A PPEAL BEFORE THE TRIBUNAL. THE LEARNED DR SUBMITTED THAT WHEN THE ASSESSING OFFICER CALLED FOR VARIOUS DETAILS IN RES PECT OF THE CREDITORS AND THE ASSESSEE HAS TAKEN VARIOUS DATES TO SUBMIT THE DETAILS, ULTIMATELY EXCEPT THE NAMES AND FIGURE S, NO ITA NO.1816/MDS/2009 : 6 : DETAILS WERE PRODUCED BEFORE THE ASSESSING OFFICER. EVEN NO DETAILS WERE PRODUCED BEFORE THE CIT(APPEALS) AND E VEN BEFORE THE TRIBUNAL ALSO. THE LEARNED DR FURTHER S UBMITTED THAT THE CIT(APPEALS) WITHOUT THERE BEING ANY DETAI LS SIMPLY CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE ADD ITION WAS DELETED AND SUBMITTED THAT THE ACTION OF THE CIT(AP PEALS) WAS NOT IN ACCORDANCE WITH LAW. THE CIT(APPEALS) HAS N OT GIVEN ANY REASONS FOR DELETING THE ADDITION MADE BY THE A SSESSING OFFICER. HE FURTHER SUBMITTED THAT WHEN THE ASSESS ING OFFICER HAS DOUBTED THE PAYMENT OF ` 18,23,948/- THE ASSESSEE WAS UNDER OBLIGATION TO PRODUCE DETAILS SUCH AS NAMES O F THE PARTIES, ADDRESSES OF THE PARTIES AND CREDITWORTHIN ESS OF THE PARTIES WITH ALL NECESSARY DOCUMENTS. IN THIS CASE , EXCEPT THE NAMES AND FIGURES, NOTHING WAS FILED. THE ASSESSEE FAILED TO DISCHARGE THE BURDEN WHICH CAST UPON HIM. THEREFOR E, THE LEARNED DR SUBMITTED THAT THE ORDER OF THE ASSESSIN G OFFICER ON THIS COUNT HAS TO BE RESTORED AND THAT OF THE OR DER OF THE CIT(APPEALS) HAS TO BE REVERSED. 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE AMOUNTS, WHICH ARE DOUBTED BY TH E ASSESSING OFFICER AMOUNTING TO ` 18,23,948/-, ARE OPENING ITA NO.1816/MDS/2009 : 7 : BALANCES AND SECTION 41(1) OF THE ACT HAS NO APPLIC ATION. HE SUBMITTED BY POINTING OUT FROM THE PAPER BOOK, WHI CH CONSISTS OF 75 PAGES, AT PAGE NO.51, THAT ALL ARE O PENING BALANCES AND SEC. 41(1) HAS NO APPLICATION. HE RE- ITERATED THE SUBMISSIONS WHICH HE HAD MADE BEFORE THE CIT(AP PEALS). 7. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS OBSER VED THAT THE ASSESSEE IN THE BALANCE SHEET OF HIS PROPRIETAR Y CONCERN, M/S. MRR BUILDERS SHOWED SUNDRY CREDITORS TO THE TUN E OF ` 23,01,614/-. THE ASSESSEE CLAIMS THAT THIS AMOUNT REMAINED UNPAID SINCE 31.3.1996. THE ASSESSING OFFICER HAD CALLED FOR DETAILS OF THE ABOVE AMOUNT, SUCH AS NAMES OF THE P ARTIES, THEIR ADDRESSES, PROOF TRANSACTION, CREDITWORTHINES S, SOURCE OF FUNDS ETC. BEFORE THE ASSESSING OFFICER THE ASSESSE E FILED THE NAMES AND THE AMOUNTS. EXCEPT THAT NO DETAILS WER E FILED SUCH AS THE DATE OF TRANSACTION, ADDRESS OF THE PAR TY, CONFIRMATION AND CREDITWORTHINESS. THE ASSESSEE ON LY STATED THAT THESE CREDITS ACTUALLY PERTAINED TO THE YEAR E NDED 31.3.1996. BEFORE THE CIT(APPEALS) IT WAS SIMPLY SU BMITTED THAT SEC. 41(1) HAS NO APPLICATION. THE CIT(APPEAL S) SIMPLY ITA NO.1816/MDS/2009 : 8 : DELETED THE ADDITION MADE BY THE A.O. ONLY AFTER CO NSIDERING THE ARGUMENTS ADVANCED BY THE LEARNED COUNSEL FOR T HE ASSESSEE.THE LEARNED COUNSEL FOR THE ASSESSEE REFER RED TO PAGE 51 OF THE PAPER BOOK. ON 18-12-08 THE ASSESSEE HAS SUBMITTED BEFORE THE A.O., (VIDE PARA 4 OF PAGE 51 OF THE PAPER BOOK), THAT ALL THESE CREDITS HAD BEEN INHERITED BY THE ASSESSEE OUT OF A FAMILY ARRANGEMENT EARLIER WI TH HIS BROTHERS. THEREFORE, THE ASSESSEE IS NOT IN A POSIT ION TO IMMEDIATELY CONTRACT THESE CREDITORS AND FURNISH YO U ANY EVIDENCE OR CONFIRMATION FROM THEM . FROM THE LETTER SUBMITTED BY THE ASSESSEE IT IS VERY CLEAR THAT THE ASSESSEE DOES NOT KNOW THE NAMES OF THE CREDITORS AND THEIR ADDRESSES AND HE SUBMITS THAT IT IS A FAMILY ARRANGEMENT. THE RE IS NOTHING ON THE RECORD WHICH SUPPORTS THE CASE OF TH E ASSESSEE THAT THESE AMOUNTS ARE OPENING BALANCES. E XCEPT POINTING OUT FROM PAGES 49, 51,53 & 55, NOTHING WAS PRODUCED TO SATISFY THAT THESE AMOUNTS ARE OPENING BALANCES. FROM THE ABOVE IT IS NOT CLEAR THAT THE AMOUNT OR ` 18,23,948 SHOWED IN THE ASSESSEES BALANCE SHEET AS SUNDRY CR EDITORS IS OPENING BALANCE. THE ASSESSEE IS NOT ABLE TO PROVE THE CREDIT. IN OUR OPINION, THE ASSESSEE HAS FAILED TO DISCHARGE ITA NO.1816/MDS/2009 : 9 : THE BURDEN CAST UPON HIM. THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION. IN VIEW OF T HE ABOVE, WE REVERSE THE ORDER PASSED BY THE CIT(APPEALS) AND R ESTORE THE ORDER PASSED BY THE ASSESSING OFFICER. ACCORDINGLY , THIS GROUND OF APPEAL RAISED BY THE REVENUE IS ALLOWED. 8. THE NEXT GROUND OF APPEAL RAISED BY THE REVENUE RELATES TO DELETION OF AN ADDITION OF ` 16,28,817/-. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS OBSER VED THAT THE ASSESSEE IN THE BALANCE SHEET OF HIS PROPRIETAR Y CONCERN, M/S. MRR BUILDERS, SHOWED A SUM OF ` 16,28,817/- AS LAND ADVANCE ON THE LIABILITY SIDE. THE ASSESSEE CLAIME D THAT IT REMAINED UNSETTLED SINCE 31-03-1997. THE ASSESSING OFFICER CALLED FOR THE DETAILS OF THE LAND ADVANCES AND ASK ED ABOUT THE PERSON FROM WHOM IT WAS RECEIVED, HIS ADDRESS A ND DETAILS OF THE AGREEMENT ETC. IN RESPONSE TO THE QU ERY, THE LEARNED COUNSEL FOR THE ASSESSEE APPEARED BEFORE TH E ASSESSING OFFICER AND FILED A LETTER DATED 09-07-20 08 STATING THAT THESE ADVANCES RELATED TO THE PERIOD AS EARLY AS IN THE YEAR ENDED 31-3-1997 AND THE DETAILS WERE BEING GAT HERED AND WOULD BE FURNISHED SEPARATELY. THE ASSESSEE HA S NOT FILED THE DETAILS BEFORE THE ASSESSING OFFICER, AS REQUIRED. ITA NO.1816/MDS/2009 : 10 : THEREFORE, THE ASSESSING OFFICER CAME TO THE CONCLU SION THAT THE AMOUNT OF ` 16,28,817/- STOOD UNEXPLAINED AND ACCORDINGLY ADDED THE SAME AS INCOME OF THE ASSESSE E UNDER THE HEAD UNEXPLAINED CASH CREDIT. 9. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(APPEALS). IT WAS SUBMITTED BEFORE THE CIT(APPE ALS) THAT BOTH THE CONDITIONS IN SEC. 41 HAVE NOT BEEN SATISF IED. THE CIT(APPEALS) HELD THAT THE ASSESSEE HAS NOT ENJOYED ANY BENEFIT AND NO DEDUCTION HAS BEEN ALLOWED EARLIER I N ANY ASSESSMENT YEAR IN RESPECT OF THESE ADVANCES NOR HA D THE APPELLANT LATER OBTAINED ANY BENEFIT OUT OF SUCH AM OUNT BY THE ACTION OF THE PERSON WHO HAD MADE THE ADVANCES. HE ACCORDINGLY DELETED THE ADDITION. 10. BEING AGGRIEVED, THE REVENUE HAS CARRIED THE MAT TER BEFORE THE TRIBUNAL. THE LEARNED DR SUBMITTED THAT THE ASSESSING OFFICER HAD FOUND IN THE BALANCE SHEET A SUM OF ` 16,28,817/- ON THE LIABILITY SIDE AS LAND ADVANCE. THE ASSESSING OFFICER CALLED FOR THE DETAILS WITH REGAR D TO THE AMOUNT OF ` 16,28,817/-, SUCH AS THE NAMES OF THE PERSONS FROM WHOM HE RECEIVED, THE EXTENT OF THE LAND AND AGREEMENT ETC. THE ASSESSEE HAS NOT FILED ANY DETA ILS AS TO ITA NO.1816/MDS/2009 : 11 : FROM WHOM HE HAD RECEIVED, THE EXTENT OF THE LAND A ND THE AGREEMENT ETC. NOTHING WAS FILED BEFORE THE ASSESS ING OFFICER. THE CASE OF THE ASSESSEE BEFORE THE ASSES SING OFFICER WAS THE ADVANCE RELATED TO THE EARLIER YEAR. BUT NO MATERIAL HAS BEEN FILED BEFORE THE ASSESSING OFFICER TO SHOW THAT THESE ADVANCES HAD BEEN RECEIVED BY THE ASSESSEE AND RELA TED TO EARLIER YEARS. EVEN BEFORE THE CIT(APPEALS) NOTHIN G HAS BEEN FILED. EVEN BEFORE US, EXCEPT STATING THAT THESE A DVANCES RELATED TO EARLIER YEAR, NO MATERIAL HAS BEEN FILED . THEREFORE, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT T HE SUM OF ` 16,28,817/- WAS INCOME OF THE ASSESSEE AS UNEXPLAIN ED CREDIT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSES SEE. THE CIT(APPEALS) WITHOUT GIVING ANY REASON SIMPLY DELET ED THE ADDITION BY OBSERVING THAT SEC. 41(1) HAS NO APPLIC ATION. WHEN THE ASSESSEE HAS NOT FILED ANY DETAILS AND HAS NOT ESTABLISHED THAT THE AMOUNT RECEIVED BY HIM RELATED TO EARLIER PERIOD ADVANCES, THE ASSESSING OFFICER HAS COME TO A REASONABLE CONCLUSION THAT THE AMOUNT FOUND IN THE BOOKS OF ACCOUNT IS THE INCOME OF THE ASSESSEE. WE FIND TH AT THE ASSESSEE HAS FAILED TO DISCHARGE THE PRIMARY BURDEN BY SHOWING THAT THE AMOUNT RECEIVED WAS LAND ADVANCE. ITA NO.1816/MDS/2009 : 12 : THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY HELD T HAT THE AMOUNT OF ` 16,28,817/- IS INCOME OF THE ASSESSEE. 11. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE FOLLOWING CASE LAWS : 1. CIT V. SUGAULI SUGAR WORKS (P.) LTD. (236 ITR 518) (SC) 2. CIT V. KESARIA TEA CO. LTD. (243 ITR 362) (KER) 3. CIT V. TAMILNADU WAREHOUSING CORPORATION (292 ITR 310) (MAD) 4. CIT V. EID MOHD. NIZAMMUDDIN (294 ITR 139) (RAJ ) 5. CIT V. WILLARD INDIA LTD. (302 ITR 221) (ALL) 6. CIT V. SADEN VIKAS INDIA LTD. (320 ITR 538) (DE L) 12. IN THE CASE OF CIT V. SUGAULI SUGAR WORKS (P) L TD. (SUPRA), THE HON'BLE SUPREME COURT HAS HELD THAT UN ILATERAL ENTRY BY THE ASSESSEE IN THE ACCOUNTS TRANSFERRING THE AMOUNT TO THE CAPITAL RESERVE ACCOUNT WOULD NOT BRING THE MATTER WITHIN THE SCOPE OF SEC. 41(1). IN THE CASE IN HAN D IT IS NOT THE CASE OF THE ASSESSEE THAT THE AMOUNT WAS TRANSF ERRED TO CAPITAL RESERVE. IT WAS FOUND BY THE ASSESSING OFF ICER THAT THE BALANCE SHEET OF THE ASSESSEE PROPRIETARY CONCERN S HOWS A SUM OF ` 16,28,817/- AS LAND ADVANCE ON THE LIABILITY SIDE. ITA NO.1816/MDS/2009 : 13 : WHEN THE ASSESSEE WAS ASKED TO FILE DETAILS WITH RE GARD TO THE DATE OF TRANSACTION, NAMES OF THE PARTIES AND THE A GREEMENT, NO DETAILS WERE FILED. THEREFORE THE ABOVE CASE LA W HAS NO APPLICATION AS THE FACTS ARE ENTIRELY DIFFERENT. 13. THE CASE OF CIT V. KESARIA TEA CO. LTD. (SUPRA) , RELATES TO SALES-TAX ASSESSMENT WHEREIN THE HONBLE KERALA HIGH COURT HAS HELD THAT THE TRIBUNAL WAS JUSTIFIED IN H OLDING THAT THERE IS NO CESSATION OF PURCHASE TAX LIABILITY WHI CH THE ASSESSEE HAS DISPUTED AND THE PROVISIONS OF PURCHAS E TAX RETURN WOULD NOT BE BROUGHT TO TAX U/S 41(1). THIS DECISION HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE AS THE FACTS ARE ENTIRELY DIFFERENT. 14. IN THE CASE OF CIT V. TAMILNADU WAREHOUSING CORPORATION (SUPRA) THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE ASSESSEE SHOWING THE AMOUNT PAYABLE U NDER THE GROUP GRATUITY SCHEME AS A LIABILITY IN THE BALANCE SHEET EVEN AFTER SURRENDERING THE SCHEME, THE SAME IS NOT ASSE SSABLE UNDER SECTION 41(1) OF THE ACT AND, THEREFORE THE C IT WAS NOT CORRECT IN PASSING THE ORDER U/S 263 OF THE ACT ON THE GROUND THAT THE ASSESSING OFFICER HAD NOT MADE PROPER ENQU IRY. THIS CASE LAW HAS NO APPLICATION TO THE FACTS OF THE PRE SENT CASE. ITA NO.1816/MDS/2009 : 14 : 15. IN THE CASE OF CIT V. EID MOHD. NIZAMMUDDIN (SU PRA), THE HONBLE RAJASTHAN HIGH COURT HAS HELD THAT THE LIABILITY WRITTEN BACK UNILATERALLY BY THE ASSESSEE IS NOT CH ARGEABLE TO TAX U/S 41(1) IN THE ASSESSMENT YEAR 1996-97 WHEREA S SEC. 41(1) WAS EFFECTIVE FROM 01-04-1997. THEREFORE, TH IS CASE LAW HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE AS THE ASSESSMENT YEAR INVOLVED IN THE PRESENT CASE IS 200 6-07. 16. IN THE CASE OF CIT V. WILLARD INDIA LTD (SUPRA) , THE HONBLE ALLAHABAD HIGH COURT HAS HELD THAT UNILATER AL ENTRY BY THE ASSESSEE ON THE GROUND OF LIMITATION DOES NOT A MOUNT TO CESSATION OF LIABILITY AND THEREFORE THE AMOUNT WAS NOT ASSESSABLE UNDER SECTION 41(1) OF THE ACT. THIS CA SE LAW HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE SIN CE THE FACTS ARE ENTIRELY DIFFERENT. 17. IN THE CASE OF CIT V. SADEN VIKAS INDIA LTD (SU PRA), THE HONBLE DELHI HIGH COURT HAS HELD THAT THE AMOUNT N OT ENTERED IN COMPUTATION OR CLAIMED AS EXPENDITURE OR LOSS IN EARLIER YEARS SECTION 41(1) HAS NO APPLICATION. T HIS DECISION OF THE HONBLE DELHI HIGH COURT THEREFORE HAS NO AP PLICATION TO THE FACTS OF THE PRESENT CASE AS THE FACTS ARE ENTI RELY DIFFERENT. ITA NO.1816/MDS/2009 : 15 : 18. WE, THEREFORE, REVERSE THE ORDER PASSED BY THE CIT(APPEALS) AND RESTORE THE ORDER PASSED BY THE AS SESSING OFFICER. IN THE CIRCUMSTANCES, THIS GROUND OF APPE AL BY THE REVENUE IS ALLOWED. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 31 ST OF JANUARY, 2013, AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) (V.DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 31 ST JANUARY, 2013. H. COPY TO: ASSESSEE/AO/CIT(A)/CIT/D.R./GUARD FILE