Sh. Rakesh Kumar, Jalandhar V. The Income Tax Officer, Jalandhar

ITA 182/ASR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7726 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARM SINGH
• Assessee Lawyers: PARVEEN JAIN
• Keywords: Search and seizure; Deemed to accrue or arise in india
• Section: 68

Judgement Text

P A G E | 1 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH , AMRITSAR BEFORE SHRI T.S. KAPOOR, AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO.182/ASR/2017 ( / ASSESSMENT YEAR: 2013-14) SHRI RAKESH KUMAR C/O MR. PARVEEN JAIN (ADVOCATE) H. NO. 8, DUNI CHAND ROAD JAMUN WALI ROAD, AMRITSAR, PUNJAB / VS. INCOME TAX OFFICER WARD 1(C), AAYAKAR BHAWAN, RAID HEAD,JAMMU, JAMMU & KASHMIR ./ ./ PAN/GIR NO. AHJPK8148D ( / APPELLANT) : ( / RESPONDENT) / APPELLANT BY : SHRI PARVEEN JAIN, A.R / RESPONDENT BY : SHRI DHARM SINGH, D.R. ! '# / DATE OF HEARING : 13/11/2017 $% '# / DATE OF PRONOUNCEMENT : 17/11/2017 &' / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER PA SSED BY THE CIT(A), DATED 01.02.2017, WHICH IN ITSELF ARISES FR OM THE ASSESSMENT ORDER PASSED BY THE A.O UNDER SEC.143(3) OF THE INC OME TAX ACT, (FOR SHORT ACT), DATED 14.01.2017. THE ASSESSEE ASSAIL ING THE ORDER OF THE CIT(A) HAD RAISED BEFORE US THE FOLLOWING GROUNDS O F APPEAL:- P A G E | 2 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) 1. THIS IS AN APPEAL UNDER SECTION 253(1) (A) AGAI NST THE ORDER UNDER SECTION 250(6) OF THE INCOME TAX ACT, 1961 PASSED BY THE HONBLE C OMMISSIONER OF INCOME TAX ACT (APPEALS)-1, JALANDHAR ON 01.02.2017 FOR THE ASSESS MENT YEAR 2013- 2014 WHERE HE HAS CONFIRMED THE FOLLOWING ADDITION. THE ASSESSMENT ORDER IS CHALLENGED ON THE FOLLOWING AMONGST THE OTHER GROUN DS, WHICH ARE TAKEN WITHOUT PREJUDICE TO EACH OTHER. (A) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E WORTH COMMISSIONER OF INCOME TAX (APPEALS)-1 HAS GROSSLY ERRED IN NOT APP RECIATING THE FACT THAT THE ASSESSMENT ORDER IS NOT AT ALL CLEAR AS TO WHET HER THE ADDITION IS BEING MADE U/S 41 OF THE ACT OR U/S 68 OF THE ACT. (B) THAT THE LD. AO AND THE WORTHY COMMISSIONER OF INCO ME TAX (APPEALS) HAS GROSSLY ERRED IN APPRECIATING THE LEGAL POSITION TH AT IF THERE IS A CESSATION OF LIABILITY, ONLY THEN THE AMOUNT COULD BE BROUGHT TO TAX, SUBJECT TO OTHER REQUIREMENT TO BE SATISFIED U/S. 41(1) AND IF THE A DDITION IS TO MADE UNDER SECTION 68 IT HAS TO BE MADE IN THE PARTICULAR YEAR IN WHICH THE TRANSACTION WAS CARRIED OUT AND NOT IN THE YEAR WHEN THERE IS N O TRANSACTION. (C) THAT THE LD. AO AND THE WORTHY COMMISSIONER OF INCO ME TAX (APPEALS) HAS GROSSLY ERRED IN MAKING/CONFIRMING AN ADDITION OF R S.13,61,311/- ON ACCOUNT OF OPENING BALANCE IN THE ACCOUNT OF GEE DEE STONEX PVT. LTD. AS THERE IS NO TRANSACTION ENTERED INTO IN THE YEAR UNDER CONSIDER ATION. (D) THAT THE LD. AO AND THE WORTHY COMMISSIONER OF INCO ME TAX (APPEALS) GROSSLY ERRED IN MAKING/CONFIRMING AN ADDITION OF R S.13,68,014/- ON ACCOUNT OF OPENING BALANCE IN THE ACCOUNT OF JINDAL TILES P VT. LTD. AS THERE IS NO TRANSACTION ENTERED INTO IN THE YEAR UNDER CONSIDER ATION. 2. THAT THE ADDITION CONFIRMED BY THE HONBLE COMMISSI ONER OF INCOME TAX (APPEALS) ARE ARBITRARY, ILLEGAL, ILLOGICAL AND UNW ARRANTED WITHOUT CONSIDERING THE LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT THE APPELLANT CRAVES TO LEAVE AND OR AMEND GRO UNDS OF APPEAL TILL THE APPEAL REMAINS UNDISPOSED OFF. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF TRADING IN MARBLE HAD E- FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2,18,200/-. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER S EC. 143(1) OF THE ACT ON 20.07.2014. THE CASE OF THE ASSESSEE WAS THEREAF TER TAKEN UP FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2). 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O IN ORDER TO MAKE NECESSARY VERIFICATIONS ISSUED LETTERS TO T HE SUNDRY CREDITORS. IN CASES OF TWO SUNDRY CREDITORS, I.E. M/S GEE DEE STO NEX PVT. LTD. AND M/S P A G E | 3 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) JINDAL TILES PVT. LTD., THE PARTIES STATED THAT THE Y HAD NO BUSINESS DEALING WITH THE ASSESSEE DURING THE YEAR AND THERE WAS NO BALANCE OF THE ASSESSEE AS PER THEIR BOOKS OF ACCOUNTS. THAT I N THE BACKDROP OF THE FACT THAT CONTRARY TO THE CLAIM OF THE AFOREMENTION ED PARTIES, THE ASSESSEE HAD SHOWN AN AMOUNT OF RS.13,61,311/- PAYA BLE TO M/S GEE DEE STONEX PVT. LTD. AND AN AMOUNT OF RS.13,68,014/ -PAYABLE TO M/S JINDAL TILES PVT. LTD., THE A.O CALLED UPON THE ASS ESSEE TO EXPLAIN AS TO WHY THE AMOUNT REFLECTED AGAINST THE ACCOUNTS OF TH E SAID RESPECTIVE PARTIES IN ITS BALANCE SHEET MAY NOT BE ASSESSED AS HIS INCOME FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE INSTEAD OF R ECONCILING THE AFORESAID DISCREPANCY RATHER CAME FORTH WITH AN EVA SIVE REPLY AND SUBMITTED THAT THE DIFFERENCE IN THE ACCOUNT OF THE PARTIES WAS DUE TO A DEFECT IN POSTING BY THEIR OLD ACCOUNTANT. THE AFOR ESAID EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE A.O WHO C HARACTERIZED THE AFOREMENTIONED PARTIES, VIZ. M/S GEE DEE STONEX PVT . LTD. AND M/S JINDAL TILES PVT. LTD. AS BOGUS CREDITORS AND MADE A CONSEQUENTIAL ADDITION OF RS.27,29,325/- TO THE RETURNED INCOME O F THE ASSESSEE. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE CIT(A). THE ASSESSEE DURING THE COURSE OF THE APPEL LATE PROCEEDINGS MOVED AN APPLICATION FOR PLACING ON RECORD THE COPI ES OF ACCOUNTS OF THE AFOREMENTIONED PARTIES BY WAY OF ADDITIONAL EVIDENC E UNDER RULE 46A OF THE INCOME-TAX RULES, 1963. THE CIT(A) AFTER DELIBE RATING ON THE CIRCUMSTANCES DUE TO WHICH THE AFORESAID DOCUMENTAR Y EVIDENCE COULD NOT BE PLACED ON RECORD BY THE ASSESSEE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THEREIN ADMITTED THE SAME. THE CIT(A) AFTER PERUSING THE ACCOUNT OF THE ASSESSEE IN THE BOOKS O F M/S GEE DEE STONEX PVT. LTD. FOR THE PERIOD 01.04.2006 TO 31.06.2016, THEREIN OBSERVED THAT THE SAME REFLECTED A NIL BALANCE. IT WAS FURTHER OB SERVED BY THE CIT(A) THAT AFTER 2 ND SEPTEMBER, 2009 NO TRANSACTIONS HAD TAKEN PLACE BE TWEEN THE ASSESSEE AND THE AFOREMENTIONED PARTY. THAT AS REGARDS THE OTHER P A G E | 4 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) PARTY, VIZ. M/S JINDAL TILES PVT. LTD., NO COPY OF ACCOUNT WAS PLACED ON RECORD BY THE ASSESSEE. THE CIT(A) AFTER DELIBERATI NG ON THE FACTS OBSERVED THAT NOT ONLY THE ASSESSEE HAD FAILED TO P ROVE THAT THE AFOREMENTIONED PARTIES WERE HIS CREDITORS, BUT RATH ER, THE BOOKS OF ACCOUNTS OF THE SAID PARTIES REVEALED THAT THE ASSE SSEE OWED NOTHING TO THEM. THAT ON THE BASIS OF THE AFORESAID FACTS AS H AD SO EMERGED, THE CIT(A) HELD A CONVICTION THAT THE LIABILITY SHOWN B Y THE ASSESSEE AGAINST THE AFORESAID RESPECTIVE PARTIES IN HIS BOOKS OF AC COUNTS FOR THE YEAR UNDER CONSIDERATION, VIZ. AY: 2013-14 HAD CEASED FR OM THE DATE OF DENIAL BY THE PARTIES REGARDING ANY SUM OWED TO THEM BY TH E ASSESSEE. THE CIT(A) HOLDING A CONVICTION THAT THE LIABILITIES RE FLECTED BY THE ASSESSEE IN THE CASE OF THE AFORESAID PARTIES, VIZ. M/S GEE DEE STONEX PVT. LTD. AND M/S JINDAL TILES PVT. LTD. AGGREGATING TO RS.27,29, 325/- HAD CEASED, THEREFORE, CALLED UPON THE ASSESSEE TO EXPLAIN AS T O WHY THE SAID AMOUNT MAY NOT BE ADDED UNDER SEC. 41(1) OF THE ACT. THE ASSESSEE IN HIS REPLY SUBMITTED BEFORE THE CIT(A) THAT AS HE HAD NOT OBTA INED ANY CASH OR ANY AMOUNT IN RESPECT OF THE OUTSTANDING LIABILITY BY WAY OF CESSATION THEREOF IN THE YEAR UNDER CONSIDERATION, THEREFORE, THE AMO UNT COULD NOT BE BROUGHT TO TAX BY INVOKING THE PROVISIONS OF SEC. 4 1(1) OF THE ACT. HOWEVER, THE CIT(A) NOT FINDING HERSELF AS BEING IN AGREEMENT WITH THE EXPLANATION OF THE ASSESSEE, THEREIN OBSERVED THAT NOW WHEN THE AFOREMENTIONED CREDITORS HAD STATED THAT NO SUM WAS OWED TO THEM BY THE ASSESSEE, THEREFORE, IT COULD SAFELY BE CONCLUD ED THAT SUCH DENIAL BY THE AFORESAID PARTIES HAD BROUGHT THE BENEFIT OF CO MPLETE WRITE-OFF OF THE AFORESAID AMOUNT WHICH WAS DUE TO THEM BY THE ASSES SEE. THUS, THE CIT(A) HELD A CONVICTION THAT THE LIABILITY OF RS.2 7,29,325/- WHICH WAS OWED BY THE ASSESSEE TO THE AFORESAID CREDITORS HAD CEASED TO EXIST THE MOMENT THEY HAD ACKNOWLEDGED IN WRITING BEFORE THE A.O THAT NOTHING WAS OWED TO THEM BY THE ASSESSEE. THE CIT(A) ON THE BASIS OF HER AFORESAID OBSERVATIONS, TAKING A SHIFT FROM THE BAS IS ON WHICH ADDITION P A G E | 5 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) WAS MADE BY THE A.O, THEREIN CONCLUDED THAT THE ADD ITION OF RS.27,29,325/- MADE BY THE A.O IN THE HANDS OF THE ASSESSEE WAS JUSTIFIED IN TERMS OF SEC. 41(1). 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. THAT DURING THE COURSE OF THE APPELLATE PROCEEDINGS THE LD. AUTHORIZED REPRESENTA TIVE (FOR SHORT A.R) FOR THE ASSESSEE ASSAILED THE ORDER OF THE CIT(A). IT WAS SUBMITTED BY THE LD. A.R THAT NOW WHEN THE ASSESSEE HAD DULY ACKNOWL EDGED THE OUTSTANDING LIABILITIES DUE TOWARDS THE AFOREMENTIO NED PARTIES, THEREFORE, THERE WAS NO REASON FOR THE CIT(A) TO HAVE CONCLUDE D THAT THE SAME HAD CEASED AND NOTHING WAS DUE BY THE ASSESSEE TO THEM. THE LD. A.R IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS:- (I) CIT VS. SUGAULI SUGAR WORKS PVT. LTD. (1999) 236 IT R 518 (SC) (II) CIT VS. SMT. SITA DEVI JUNEJA (2010) 325 ITR 593 (P & H) THUS, ON THE BASIS OF HIS AFORESAID CONTENTIONS THE LD. A.R HAD TRIED TO IMPRESS UPON US THAT THE ISSUE INVOLVED IN THE CASE OF THE ASSESSEE WAS SQUARELY COVERED BY THE AFORESAID JUDICIAL PRONOUNC EMENTS, AND AS SUCH, NO ADDITION UNDER SEC. 41(1) WAS CALLED FOR IN THE HANDS OF THE ASSESSEE. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FO R SHORT D.R) RELIED ON THE ORDER OF THE CIT(A). IT WAS SUBMITTED BY THE LD . D.R THAT NOW WHEN THE AFOREMENTIONED RESPECTIVE PARTIES HAD THEMSELVE S ADMITTED THAT NOTHING WAS OWED BY THE ASSESSEE TO THEM, THEREFORE , IN THE BACKDROP OF THE SAID FACTS THE CIT(A) HAD RIGHTLY DISALLOWED TH E OUTSTANDING LIABILITY AGGREGATING TO RS.27,29,325/- UNDER SEC. 41(1). IT WAS SUBMITTED BY THE LD. D.R THAT THE APPEAL OF THE ASSESSEE DID NOT MER IT ACCEPTANCE AND MAY THEREIN BE DISMISSED. P A G E | 6 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) 6. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BO TH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT OUR INDULGENCE IN THE PRESENT APPEAL IS SOUGHT FOR ADJUDICATING THE VALIDITY OF THE ADDITION OF RS.27, 29,325/-WHICH HAD BEEN SUSTAINED BY THE CIT(A) UNDER SEC. 41(1). WE H AVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE A ND ARE PERSUADED TO BE IN AGREEMENT WITH THE VIEW TAKEN BY THE CIT(A) THAT NOW WHEN BOTH THE PARTIES HAD ADMITTED THAT NO AMOUNT WAS OWED BY THE ASSESSEE TO THEM, THEREFORE, IT COULD SAFELY AND INESCAPABLY BE CONCL UDED THAT THE LIABILITY OUTSTANDING TOWARDS THEM HAD CEASED IN THE HANDS OF THE ASSESSEE. WE THOUGH ARE OF THE VIEW THAT THOUGH THERE CAN BE NO SECOND OPINION IN RESPECT OF THE FACT THAT THE AFORESAID LIABILITIES HAD CEASED, BUT ARE UNABLE TO COMPREHEND THAT AS TO ON WHAT BASIS THE C IT(A) HAD RELATED SUCH CESSATION OF LIABILITY TO THE YEAR UNDER CONSI DERATION, VIZ. A.Y 2013- 14. WE ARE OF THE CONSIDERED VIEW THAT SECTION 41(1 )(A) WHICH IS RELEVANT TO THE CASE OF THE PRESENT ASSESSEE CLEARLY PROVIDE S THAT IT IS ONLY WHERE THE ASSESSEE DURING ANY PREVIOUS YEAR HAS OBTAINED SOME BENEFIT IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSI ON OF CESSATION THEREOF, THE VALUE OF BENEFIT ACCRUING TO HIM SHALL BE DEEME D TO BE PROFIT AND GAIN OF BUSINESS OR PROFESSION AND ACCORDINGLY CHARGEABL E TO INCOME TAX AS INCOME OF THAT PREVIOUS YEAR. WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE AFORESAID STATUTORY PROVISION CLEARLY PROV IDES THAT THE REMISSION OR CESSATION OF A TRADING LIABILITY IS TO BE DEEMED AS THE INCOME OF THE ASSESSEE ONLY IN THE PREVIOUS YEAR IN WHICH THE ASSESSEE HAD OBTAINED SOME BENEFIT IN RESPECT OF SUCH TRADING LI ABILITY BY EITHER OF THE AFORESAID ACT, THEREFORE, THE ADDITION CAN ONLY BE MADE IN THE HANDS OF THE ASSESSEE IN THE SAID YEAR ALONE. WE ARE OF THE CONSIDERED VIEW THAT IT WOULD BE ABSOLUTELY IMPERMISSIBLE ON THE PART OF TH E AUTHORITIES TO TAKE A DEPARTURE FROM THE PLAIN AND LITERAL MEANING OF THE AFORESAID STATUTORY PROVISION AND MAKE AN ADDITION IN RESPECT OF REMISS ION OR CESSATION OF A P A G E | 7 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) TRADING LIABILITY IN ANY YEAR, EXCEPT FOR THE YEAR IN WHICH SUCH BENEFIT WAS OBTAINED BY THE ASSESSEE. WE FIND THAT THE CIT(A) W ITHOUT PLACING ON RECORD ANY MATERIAL WHICH COULD CONCLUSIVELY PROVE THAT THE BENEFIT EMERGING FROM THE REMISSION OR CESSATION OF THE AFO REMENTIONED LIABILITY TOWARDS THE SUNDRY CREDITORS WAS OBTAINED BY THE AS SESSEE ONLY DURING THE YEAR UNDER CONSIDERATION, AND NOT IN ANY OTHER YEAR, HAD THUS ERRED IN ASSESSING THE SAME AS THE DEEMED INCOME OF THE A SSESSEE FOR THE YEAR UNDER CONSIDERATION. WE HAVE DELIBERATED ON THE FAC TS AND FIND THAT THE AFOREMENTIONED PARTIES THOUGH HAD CLEARLY STATED TH AT THERE WAS NO BALANCE OF THE ASSESSEE AS PER THEIR BOOKS OF ACCOU NTS, WHICH THOUGH WE ARE OF THE VIEW WOULD BE SUFFICIENT TO JUSTIFY INVO KING OF THE PROVISIONS OF SEC. 41(1), HOWEVER, THE YEAR IN WHICH THE BENEFIT IN RESPECT OF SUCH TRADING LIABILITY ON ACCOUNT OF ITS REMISSION OR CE SSATION THEREOF WAS OBTAINED BY THE ASSESSEE CANNOT BE LOST SIGHT OF AN D WOULD BE CRUCIAL FOR BRINGING THE SAME TO TAX IN THE HANDS OF THE ASSESS EE. WE ARE OF THE CONSIDERED VIEW THAT IT WOULD NOT BE JUSTIFIED ON T HE PART OF THE A.O TO WHIMSICALLY RELATE THE REMISSION OR CESSATION OF TR ADING LIABILITY TO THE YEAR IN THE COURSE OF ASSESSMENT OF WHICH HE LEARNS ABOUT THE SAME, THEREIN BYPASSING THE FACT AS TO WHEN THE BENEFIT E MERGING THERE FROM WAS OBTAINED BY THE ASSESSEE. WE ARE OF THE STRONG CONVICTION THAT THE CORRECT APPROACH FOR MAKING AN ADDITION WOULD BE TO FIND OUT THE YEAR IN THE WHICH THE BENEFIT EMERGING FROM REMISSION OR CE SSATION OF SUCH LIABILITY WAS OBTAINED BY THE ASSESSEE. WE FIND THA T IN THE CASE OF THE PRESENT ASSESSEE THE ONLY REASON FOR MAKING OF THE ADDITION UNDER SEC. 41(1) IN THE YEAR UNDER CONSIDERATION, AS SO EMERGE S FROM THE ORDER OF THE CIT(A), IS THAT THE SAID FACT HAD CAME TO THE N OTICE OF THE A.O DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR THE YE AR UNDER CONSIDERATION. WE FIND THAT NOW WHEN IT IS A MATTER OF RECORD THAT THE ASSESSEE HAD NO TRANSACTIONS WITH THE AFOREMENTIONE D PARTIES SINCE 2009, THEREFORE, IT WAS INCUMBENT ON THE PART OF TH E LOWER AUTHORITIES TO P A G E | 8 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) HAVE ARRIVED AT ANY SUCH CONCLUSION AFTER MAKING NE CESSARY VERIFICATIONS AS TO THE YEAR IN WHICH THE WRITING OFF OF THE AFOR ESAID AMOUNTS HAD TAKEN PLACE IN THE BOOKS OF ACCOUNTS OF THE AFORESA ID PARTIES. WE FIND THAT NEITHER OF THE LOWER AUTHORITIES HAD VERIFIED THE AFORESAID FACT, WHICH TO OUR UNDERSTANDING WOULD BE CRUCIAL FOR IDENTIFYI NG THE YEAR IN WHICH THE BENEFIT EMERGING FROM CESSATION OR REMISSION OF THE TRADE LIABILITIES RELATABLE TO THE AFORESAID PARTIES WAS OBTAINED BY THE ASSESSEE. WE ARE UNABLE TO PERSUADE OURSELVES TO BE IN AGREEMENT WIT H THE VIEW TAKEN BY THE CIT(A) THAT AS THE PARTIES HAD DURING THE COURS E OF THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION STATED THAT AS PER THEIR BOOKS OF ACCOUNT NOTHING WAS DUE TO THEM FROM THE A SSESSEE, THEREFORE, MERELY ON THE SAID COUNT THE CESSATION OR REMISSION OF THE TRADING LIABILITIES WAS TO BE RELATED TO AND BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE IN THE SAID YEAR. WE ARE OF A STRONG CONVI CTION THAT THE YEAR IN WHICH THE BENEFIT FROM CESSATION OR REMISSION OF TR ADING LIABILITIES UNDER CONSIDERATION WAS OBTAINED BY THE ASSESSEE HAD BEEN LOST SIGHT OF BY THE CIT(A) WHILE JUSTIFYING THE ADDITION UNDER SEC. 41( 1) IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. WE HAVE ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LD. A.R AND FIND THAT THE SAME ARE DISTINGUISHABLE ON FACTS. WE FIND THAT IN THE CASE OF SITA DEVI JUNEJA (SUPRA) THE SUNDRY CREDITORS HAD CONFIRMED T HE OUTSTANDING LIABILITIES. HOWEVER, UNLIKE THE FACTS INVOLVED IN THE AFORESAID CASE BEFORE THE HONBLE HIGH COURT, IN THE PRESENT CASE THE SUN DRY CREDITORS HAD THEMSELVES STATED THAT NOTHING WAS DUE TO THEM BY T HE ASSESSEE. THAT IN THE CASE OF SUGAULI SUGAR WORKS PVT. LTD. (SUPRA) T HE DEBT HAD BECOME UNENFORCEABLE IN VIEW OF THE A.O AND THOUGH THE ASS ESSEE HAD UNILATERALLY MADE AN ENTRY IN ITS BOOKS OF ACCOUNTS , HOWEVER, THERE WAS NO SUCH ACT ON THE PART OF THE CREDITORS. WE THUS A RE OF THE CONSIDERED VIEW THAT THE CASE LAWS RELIED UPON BY THE LD. A.R, BEING DISTINGUISHABLE P A G E | 9 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) ON FACTS, WOULD THUS NOT BE OF ANY ASSISTANCE TO HI M IN THE BACKDROP OF THE FACTS OF THE CASE BEFORE US. 7. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATI ONS RESTORE THE MATTER TO THE FILE OF THE A.O, WITH A DIRECTION TO READJUDICATE THE ISSUE AFTER MAKING NECESSARY VERIFICATIONS AS TO WHEN THE AFOREMENTIONED AMOUNTS HAD BEEN WRITTEN OFF BY THE ABOVEMENTIONED PARTIES IN THEIR BOOKS OF ACCOUNTS, AND THE CONSEQUENTIAL BENEFIT HA D BEEN OBTAINED BY THE ASSESSEE IN TERMS OF SEC. 41(1) OF THE ACT. W E THUS, IN LIGHT OF OUR AFORESAID OBSERVATIONS SET ASIDE THE AFORESAID ADDI TION OF RS.27,29,325/- MADE BY THE A.O. AND RESTORE THE ISSUE TO THE FILE OF THE A.O FOR FRESH ADJUDICATION IN TERMS OF OUR AFORESAID OBSERVATIONS . 8. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17.11.2017 SD/- SD/- (T.S. KAPOOR) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER (& 17 . 11.2017 PS. ROHIT KUMAR P A G E | 10 ITA NO.182/ASR/2017 AY: 2013-14 SHRI RAKESH KUMAR VS. ITO, WARD NO. 1(C) & && &' '' ' ' ' ' ' ) )) ) * ** *) )) )' '' ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. + ( ) / THE CIT(A)- 4. + / CIT 5. ),- ' , , ! / DR, ITAT, AMRITSAR 6. -. /! / GUARD FILE. )' ' //TRUE COPY// & && &' '' ' / BY ORDER, 0 00 0 / 1 11 1 (DY./ASSTT. REGISTRAR) , ! / ITAT, AMRITSAR