Senco Gold Ltd., Kolkata V. DCIT, Circle - 11, Kolkata, Kolkata

ITA 1862/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1204 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 29-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATYAJIT MONDAL CIT LD SR D
• Assessee Lawyers: SHARAD MOHTA FCA LD

Judgement Text

1 ITA NO.1862/KOL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO. 1862/KOL/2014 A.Y: 2008-09 SENCO GOLD LTD VS. ADDL. CIT, RANGE-11, KOLKATA PAN: AADCS6985J [APPELLANT] [RESPONDEN T] FOR THE APPELLANT : SHRI SHARAD MOHTA, FCA, LD .AR FOR THE RESPONDENT : SHRI SATYAJIT MONDAL, ADDL. CIT, LD.SR.DR DATE OF HEARING : 30-08-2017 DATE OF PRONOUNCEMENT : 03-11-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), XII, KOLKATA DT. 25-07-2014 FOR THE A.Y 2008-09. 2. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER TH E CIT-A JUSTIFIED IN CONFIRMING THE IMPUGNED ADDITION (RS.40,36,895/ -) MADE ON ACCOUNT OF CESSATION OF LIABILITY U/S. 41(1) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE AO FOUND THAT THE ASSESSEE HAS SHOWN LIABILI TY OF RS.1,02,87,127/- FROM 1999-2000 TO 2006-07 UNDER TH E HEAD ADVANCE FROM CUSTOMERS AND OFFERED FOR TAXATION A SUM OF RS.40,36,895/- BEING THE AMOUNT RECEIVED IN CASH AN D CHEQUE. HOWEVER, THE AO TREATED THE SAID AMOUNT AS INCOME O N ACCOUNT OF CESSATION OF LIABILITY U/S. 41(1) OF THE ACT AND AD DED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE THE CIT-A THE ASSESSEE CONTENDED THAT THE SAID LIABILITY WAS NEVER ALLOWED AS DEDUCTION IN EARLIER YEARS. TH E ASSESSEE HAS ALSO NOT CLAIMED ANY BENEFIT BY WAY OF REMISSION O R CESSATION OF THE 2 ITA NO.1862/KOL/2014 SAID LIABILITY AND CHALLENGED THE SAID ADDITION MAD E BY THE AO U/S. 41(1) OF THE ACT AND PRAYED TO DELETE THE SAME. BUT , HOWEVER, THE CIT-A DID NOT ACCEPT THE SUBMISSIONS MADE BY THE AO AND CONFIRMED THE ADDITION MADE BY THE AO. RELEVANT PORTION OF CI T-A ORDER IS REPRODUCED HEREIN BELOW:- 5.2.3 DECISION: AS DISCUSSED IN THE FOREGOING PARAGRAPHS, THE ASSE SSING OFFICER FOUND THAT CASH/CHEQUE WAS RECEIVED BY THE APPELLANT COMPANY AS ADVANCE FROM THE CUSTOMERS SINCE 1999-2000. ACCORDING TO THE DETAILS FURNISHED BY THE APPELLANT, TOTAL CASH ADVANCE RECEIVED DURING THE PERIOD FROM 1999-2000 TO 2007-2 008 WAS OF RS.1,02,87,127/- WHICH WAS SHOWN BY THE APPELLANT AS ITS LIABILITY. ON BEI NG ASKED TO EXPLAIN WHY SO MUCH OF CASH ADVANCE HAS BEEN RETAINED BY THEM WITHOUT MAK ING NECESSARY ADJUSTMENTS IN THE SUBSEQUENT YEARS, THE ASSESSING OFFICER NOTED THAT NO SATISFACTORY EXPLANATION COULD BE OFFERED BY THE APPELLANT FOR RETAINING SUCH HUGE A MOUNT OF CASH AS ADVANCE FROM THE CUSTOMERS SINCE 1999-2000, BUT, ULTIMATELY THE APPE LLANT HAD OFFERED FOR TAXATION A SUM OF RS.40,36,895/- BEING THE CASH/CHEQUE RECEIVED AS ADVANCE DURING THE PERIOD FROM 1999-2000 TO 2006-07. IN KESORAM INDUSTRIES & COTTO N MILLS LTD. VS. CIT [1992] 196 ITR 845 (CAL.), IT HAS BEEN HELD THAT WHETHER THE LIABILITY OF THE ASSESSEE HAS BEEN FULLY DISCHARGED IS WITHIN THE SPECIAL KNOWLEDGE OF THE A SSESSEE. HE HAS TO PROVE THAT IN FACT THE LIABILITY SUBSISTS. WHERE THE CONDUCT AND SURRO UNDING CIRCUMSTANCES DEMONSTRATE THAT THE AMOUNT HAS BEEN REMITTED OR FOREGONE OR T HE SUM HAS CEASED TO BE CLAIMABLE AGAINST THE ASSESSEE, IT WOULD BE A CLEAR CASE OF R EMISSION OR CESSION OF THE LIABILITY OF THE ASSESSEE. IN THE INSTANT CASE, THE APPELLANT CO MPANY HAS NOT MADE ANY EFFORT TO SUBSTANTIATE THAT THE LIABILITIES SUBSISTED DURING THE FINANCIAL YEAR RELEVANT FOR THE PRESENT ASSESSMENT YEAR EITHER DURING ASSESSMENT P ROCEEDINGS, OR AT THIS STAGE. NOW, IT IS WELL SETTLED THAT AGREED ASSESSMENT CANNOT BE CO MPLAINED AGAINST. IN KANSHI RAM WADHWA V. CIT [ 1982] 138 ITR 830 (PUNJ & HAR.), IT HAS BEEN HELD THAT AN ASSESSEE WHO HAS DERIVED THE BENEFIT OF AN AGREED ORDER CANN OT BE ALLOWED TO TURN AROUND AND URGE THAT SUCH AN ORDER WAS INCORRECT OR UNWARRANTE D. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED V IEW THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE IMPUGNED ADDITION OF THE A MOUNT OF RS.40,36,895/-, WHICH HAS BEEN OFFERED BY THE APPELLANT FOR TAXATION DURING T HE COURSE OF ASSESSMENT PROCEEDINGS. I DO NOT FIND ANY EVIDENCE OR MATERIAL BROUGHT ON R ECORD IN REBUTTAL OF SUCH FINDING. THE SAID ADDITION IS, THEREFORE, CONFIRMED. THIS GROUND OF APPEAL IS, THEREFORE, REJECTED. 5. THE LD. AR REITERATED THE SAME SUBMISSIONS AS MA DE BEFORE THE CIT-A. 6. ON THE OTHER HAND, THE LD.DR SUBMITS THAT THE LI ABILITY SHOULD NOT GO FOR THE PERIODS 1999-2000 TO 2006-07 AND THE CIT-A WAS JUSTIFIED IN CONFIRMING THE SAME BY RELYING ON MANY CASE LAWS AVAILABLE IN HIS ORDER. 7. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND FORCE IN THE ARGUMENTS AS ADVANCED BY THE ASSESSEE BEFORE THE CIT-A AS WELL AS BEFORE US REGARDING NO BENEFIT DERIVED BY W AY OF CLAIMING DEDUCTION OF LIABILITY SHOWN FROM 1999-2006. THE RE SPONDENT REVENUE DID NOT BRING ON RECORD BY ANY MATERIAL TO SHOW THAT THE ASSESSEE AVAILED BENEFIT OF DEDUCTION. THEREFORE, T HE ADDITION MADE 3 ITA NO.1862/KOL/2014 U/S. 41(1) OF THE ACT IS NOT MAINTAINABLE. IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT THE ASSESSEE DERIVED NO BENEFIT OF DE DUCTION UNDER THE HEAD LIABILITY OF REMISSION. THEREFORE, THE CIT- A WAS NOT JUSTIFIED IN CONFIRMING THE SAME. ACCORDINGLY, WE DELETE THE IMP UGNED ADDITION AS MADE BY THE AO ON THIS ISSUE. THEREFORE, THE GRO UNDS RAISED BY THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03- 11-2017 SD/- SD/- P.M. JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :03-11-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE: M/S. SENCO GOLD LTD 7 & 8 CIT R OAD, KOLKATA-14. 2 RESPONDENT /DEPARTMENT: THE ADDL. CIT, RANGE-11, P- 7 CHOWRINGHEE SQUARE, KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, SR.PS/H.O.O,ITAT,KOL