M/s. Mukesh Prints, Surat V. The Income tax Officer,Ward-9(3), Surat

ITA 1900/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50778 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: M K PATEL
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH BEFORE S/SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.1900/AHD/2009 [ASSTT. YEAR : 2006-2007] M/S.MUKESH PRINTS SURVEY NO.403/2 FINAL PLOT NO.98 BESIDE TARANKUND, VASTADEVDI ROAD KATARGAM, SURAT. PAN : AAIFM 5429 K /VS. ITO, WARD-9(3) SURAT. ( / APPELLANT) ( / RESPONDENT) ! / ASSESSEE BY : SHRI M.K. PATEL '#$ ! / REVENUE BY : SHRI B.L. YADAV %$& ' / DATE OF HEARING : 17 TH OCTOBER, 2011 ()* ' / DATE OF PRONOUNCEMENT : 21 ST OCTOBER, 2011 !+ / O R D E R A.L. GEHLOT, ACCOUNTANT MEMBER : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V, AHMEDAB AD DATED 31.3.2009 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. THE ONLY GROUND RAISED IN THIS APPEAL IS AGAINST CONFIRMATION OF THE ADDITION OF RS.44,63,675/- MADE UNDER SECTION 41(1) OF THE INCO ME TAX ACT, 1961. 3. BRIEFLY STATED FACTS ARE THAT DURING THE ASSESSM ENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS SHOWN LIABILITY TO THE TUNE OF RS. 63,91,983/- INCLUDING RS.19,14,308/- AGAINST CENTRAL EXCISE ACCOUNT IN THE BALANCE SHEET AS ON 31-3-2006. THE AO ASKED THE ASSESSEE TO FURNISH THE ADDRESSES OF THE CREDITORS. THE ASSESS EE COULD NOT FURNISH THE SAME ON THE GROUND THAT THE MATTER WAS VERY OLD AND CERTAIN BOOKS WERE DESTROYED IN FIRE. THE AO AFTER ITA NO.1900/AHD/2009 -2- CONSIDERING ASSESSEES SUBMISSION MADE THE ADDITION OF RS.44,63,675/- ON THE GROUND THAT THE SAID LIABILITY HAS BEEN CEASED TO EXIST UNDER SECTI ON 41(1) OF THE ACT. THE CIT(A) CONFIRMED THE ADDITION ON THE GROUND THAT THE ASSESSEE HAS FA ILED TO PRODUCE THE EVIDENCE WHICH COULD PROVE THAT THE CREDITOR HAS APPROACHED IT FOR THEIR CLAIM WHICH SHOWED THAT NO LIABILITY EXISTED. THE AGGRIEVED BY THIS DECISION OF THE CIT(A), THE A SSESSEE IS BEFORE US. 4. BEFORE, THE LEARNED COUNSEL FOR THE ASSESSEE REI TERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESS EE WAS DOING DYEING AND PRINTING WORK SINCE LONG. THERE WAS DISPUTE REGARDING THE QUALIT Y OF GOODS PURCHASED. THEREFORE, THE PAYMENT WAS NOT MADE TO THE CREDITORS. IT WAS SUBM ITTED THAT THE ASSESSEE HAS INTENTION TO PAY OFF THE DUE AND THEREFORE KEPT THIS AMOUNT ASIDE BY PUTTING THE SAME IN FIXED DEPOSITS SO THAT THEY CAN SETTLE THE AMOUNT WHEN THE CREDITORS APPRO ACH. THE LEARNED AR SUBMITTED THAT THERE IS NO CESSATION OF LIABILITY THEREFORE THE ADDITION UNDER SECTION 41(1) OF THE ACT IS UNJUSTIFIED. THE LEARNED COUNSEL FOR THE ASSESSEE IN SUPPORT OF HIS SUBMISSION RELIED UPON THE ORDER OF THE ITAT, AHMEDABAD C BENCH IN THE CASE OF NEW COMMER CIAL MILLS CO. LTD. VS. DCIT, 73 TTJ (AHD) 893 AND THE DECISION IN THE CASE OF NITIN S. GARG VS. ACIT, 40 SOT 253 (AHD). THE LEARNED DR, ON THE OTHER HAND RELIED UPON THE O RDER OF THE CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND RECORD PERUSE D. WE FIND THAT ON IDENTICAL SET OF FACTS, IN THE ABOVE TWO CASES CITED BY THE LEARNED AR, THE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WHEREIN IT HAS BEEN HELD THA T THE ONUS IS ON THE REVENUE TO ESTABLISH THAT LIABILITY HAS CEASED. IN THE CASE UNDER CONSI DERATION, THE REVENUE HAS FAILED TO DISCHARGE ITS ONUS THAT THE LIABILITY HAS BEEN CEASED. CONTR ARY TO THAT FACT, THE ASSESSEE HAS SUBMITTED THAT THERE WAS DISPUTE IN RESPECT OF LIABILITIES AN D THE ASSESSEE WAS HAVING INTENTION TO REPAY THE SAME AND THE AMOUNT WAS PUT IN FDS. THESE FACT S HAVE NOT BEEN DISPUTED BY THE REVENUE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IT IS NOT A CASE FALLING UNDER SECTION 41(1) OF THE ACT. THEREFORE, THE ADDITION MADE BY THE AO OF RS.44,63,675/- IS DELETED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (A.L. GHELOT) ACCOUNTANT MEMBER ITA NO.1900/AHD/2009 -3- COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : DEPARTMENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD