MAMTA H MALHOTRA ( PROP OF MED VISIN), MUMBAI V. ITO WD 20(2)(2), MUMBAI

ITA 1922/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93192 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 13-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 21-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: PARKASH JHUNJHUNWALA
• Keywords: Onus to prove
• Section: 143(3); 133(6); 131; 27

Judgement Text

SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B , MUMBAI . . , , BEFORE SHRI G S PANNU , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIA L MEMBERITA ITA NO. : 1 9 22 /MUM/20 1 2 (ASSESSMENT YEAR: 200 7 - 0 8 ) SMT. MAMTA H MALHOTRA, CD 4/6 LOVELY CO - OP HSG. SOCIETY , SARDAR PATEL NAGAR, MHADA, ANDHERI (WEST), MUMBAI - 400 0 53 .: PAN : A AF P M 4062 K VS IT O - 20 ( 2 ) (2) , MUMBAI (APP ELLANT) (RESPONDENT) APPELLANT BY : SHRI PARKASH JHUNJHUNWALA RESPONDENT BY : SHRI YOGESH KAMAT /DATE OF HEARING : 13 - 05 - 2015 / DATE OF PRONOUNCEMENT : 24 - 07 - 2 015 ORDER PER AMIT SHUKLA , J.M. : TH E AFORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 09.01.2012 , PASSED BY CIT(A) - 3 1 , MUMBAI , FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) FOR THE ASSESSMENT YEAR 200 7 - 0 8. 2. IN TH E GROUNDS OF APPEAL T HE ASSES S EE HAS RAISED THE FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN ADDITION OF RS. 63,61,352/ - OUT OF SUNDRY CREDITORS WITHOUT APPRECIATING THE FACTS OF THE CASE AND CIRCUMSTANCES OF THE CASE. 3 . FURTHER BY WAY OF ADDITIONAL GROUND ; THE ASSESSEE HAS RAISED FOLLOWING ISSUE: - SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 2 ON THE FACTS AND CIRCUMSTANCES UNDER CASE LAW, THE ADDITION SUSTAINED U/S 41(1) OF RS. 63,61,352/ - IS ERRONEOUS SINCE T HE ALLEGED BENEFIT OF REMISSION OR CESSATION OF LIABILITY HAS NOT OBTAINED DURING THE IMPUGNED PREVIOUS YEAR. 4. BRIEF FACTS OF THE CASE ARE THAT, THE ASSES S EE IS AN INDIVIDUAL AND PROPRIETOR OF M/S MEDIA VISION ADVERTISING, WHICH HAS ENGAGED IN THE BUS INESS OF CONSULTANCY . 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSES S EE HAD SUNDRY CREDITORS TO THE TUNE OF RS. 71,76,672/ - , WHICH WERE OUTSTANDING DURING THE YEAR. THE DETAILS OF THE 14 PARTIES AS APPEARING UND ER THE HEAD SUNDRY CREDITORS AS ON 31.03.2007 HAVE BEEN INCORPORATED BY THE ASSESSING OFFICER AT PAGE 2 OF THE ASSESSMENT ORDER, WHICH ARE AS UNDER: SR NO. NAME OF THE PARTY AMOUNT 1 BBF 3 BROTHERS & FILM 6,86,800.00 2 CINTEL INDIA 1,57,757.00 3 MV A SIA LDC 5,60,365.00 4 RACE ME 1,08,949.00 5 RACHANA ADVERTISING 7,97,643.00 6 REMISCENT INDIA 6,37,500.00 7 SAHARA INDIA COMM. CORPN 7,91,751.85 8 SET INDIA LTD. 12,74,107.00 9 STAR (INDIA) PVT LTD 6,61,591.00 10 SUN TV 2,75,029.00 11 SURUCHI COMMU NICATION 7,99,785.00 12 TEAMWORK FILMS 4,00,000.00 13 VIJAYA TELEVISION LTD. 4,71,884.00 14 ZEE TELEFILMS LTD 1,53,512.00 TOTAL 77,76,672.00 THE ASSESSEE HAS PRO VID ED THE LIST OF SUNDRY CREDITORS ALONG WITH THEIR NAME S AND ADDRESSES. THE ASSESSING O FFICER SENT NOTICES U/S 133(6) TO CERTAIN PARTIES HOWEVER IN SOME OF THE CASES, THE NOTICES REMAINED UNSERVED. WHEN CONFRONTED TO THE ASSESSEE, THE ASSESSE E FURNISHED CONFIRMATION OF SOME OF THE PARTIES, THE DETAILS OF WHICH HAVE ALSO BEEN NOTED BY THE ASS ESSING OFFICER. ON THE PERUSAL OF THE LEDGER ACCOUNTS OF THE PARTIES, HE NOTED THAT ALL TH ESE PARTIES WERE HAVING OPENING BALANCE S AND THERE WERE NO TRANSACTIONS RECORDED IN RESPECT OF THEIR ACCOUNTS DURING THE RELEVANT SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 3 ACCOUNTING YEAR AND THE S E BALANCES W E RE APPEARING IN THE BALANCE SHEET OF THE ASSES S EE FOR THE LAST THREE TO FOUR YEARS. THE ASSES S EE SUBMITTED THAT , SINCE SHE COULD NOT RECOVER THE MONEY FROM VARIOUS SUNDRY DEBTORS THEREFORE , THE AMOUNT DUE COULD NOT BE PAID TO THE SUNDRY CREDITORS. WHEN TH E ASSESSING OFFICER ISSUED THE SHOW CAUSE NOTICE AS TO WHY SUCH AN AMOUNT APPEARING IN THE NAME OF THE SUNDRY CREDITORS SHOULD NOT BE ADDED U/S 41(1) AS CESSATION OF TRADING LIABILITY , THE ASSESSEE SUBMITTED THAT ALL THE CREDITORS ARE GENUINE AND THE AMOUN TS PAYABLE TO THEM IS STILL OUTSTANDING AT THE END OF THE RELEVANT ACCOUNTING YEAR. SHE FURTHER SUBMITTED THAT, EARLIER, SHE WAS DOING BUSINESS OF BUYING AND SELLING OF TV COMMERCIAL SPACE, HOWEVER DUE TO HARDSHIPS, SHE COULD NOT CARRY OUT THE BUSINESS AND NOW SHE IS COMPLETELY ENGAGED IN CONSULTANCY ONLY. SINCE ASSESSEE DID NOT HAD MONEY TO PAY TO THE SUNDRY CREDITORS THE SAME WERE HELD AS LIAB I L ITY IN THE BALANCE SHEET. HOWEVER, THE ASSESSING OFFICER HELD THAT THE ASSESSEE COULD NOT CORROBORATE HER EXPLAN ATION TO BE TRUE OR BONA FIDE ON THE BASIS OF ANY MATERIAL OR EVIDENCES. HE FURTHER HELD THAT IN T HE EARLIER YEARS, BALANCE SHEET AND THE EVIDENCES COULD NOT BE SCRUTINIZED U/S 143(3), THEREFORE , FACTUM OF GENUINENESS OF SUNDRY CREDITORS COULD NOT BE EXAMI NED. ACCORDINGLY, AFTER DETAILED DISCUSSION, HE ADDED THE SUM OF RS. 71,23,160/ - U/S 41(1) SHOWN UNDER THE HEAD SUNDRY CREDITORS ON THE GROUND THAT THERE IS A CESSATION OF LIABILITY IN THIS YEAR . 6 . BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS ONLY ISSUED NOTICES U/S 133(6) TO FEW CREDITORS AND ON THAT BASIS , HE HAS DRAWN PRESUMPTION AGAINST ALL THE PARTIES . I F THE NOTICES COULD NOT BE SERVED TO SOME OF THE PARTIES, THIS DOES NOT MEAN THAT CREDITORS ARE NOT GENUINE. BEFORE THE CIT(A), THE ASSESSEE FILED THE CORRECT ADDRESSES AS WELL THE COPY OF CONFIRMATION FROM MOST OF THE PARTIES, THE DETAILS OF WHICH ARE APPEARING AT PARA 2.1 OF THE APPELLATE ORDER. ACCORDINGLY, THE LD. CIT(A) REMANDED THE MATTER TO THE ASSESSING OFFICER FOR CARRYING SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 4 OUT ENQUIRIES AND INVESTIGATION IN RESPECT OF ALL THE 12 CREDITORS, SO AS TO ASCERTAIN THE CREDITWORTHINESS OF THE EXPLANATION FURNISHED BY THE ASSESSEE . THE ASSESSING OFFICER IN HIS REMAND REPORT HAD GIVEN THE PARTY - WISE COMMENTS IN RESPECT O F ALL THE 12 CREDITORS, WHICH ARE APPEARING IN PARA 2. 2. 3 OF THE APPELLATE ORDER . IN SUM AND SUBSTANCE THE AOS REMARK IN RESPECT OF ALL THE CREDITORS WERE THREE FOLD, ONE, OUT OF 12 CREDITORS, FIVE CREDITORS HAVE EITHER WRITTEN OFF THE DEBT IN EARLIER YEA RS OR HAVE SHOWN NIL OUTSTANDING ; SECONDLY, IN CASE OF THREE PARTIES, H E FIND THAT THEY HAVE CONFIRMED ONLY PART OF THE DEBT ; LASTLY, THERE ARE FOUR PARTIES, TO WHOM NOTICES U/S 131 COULD NOT BE SERVED , BASED ON THIS HE GAVE HIS DETAIL COMMENT ON EACH AN D EVERY PARTY . THE LD. CIT(A) AFTER CONSIDERING THE ASSESSEES SUBMISSION AND THE REMAND REPORT OF THE ASSESSING OFFICER FOUND THAT THE ASSESSEE COULD NOT ESTABLISH ANYTHING SUBSTANTIALLY THAT LIABILITY STILL EXISTS AND HELD THAT THE LIABILITY TO THE EXTEN T OF RS. 63,61,350/ - IN RESPECT OF 12 PARTIES HAVE CEASED TO EXIST AND SUCH A FINDING WA S BASED ON THE CO MMENT OF THE ASSESSING OFFICER GIVEN IN HIS REMAND REPORT AND ALSO FACT THAT SOME OF THESE PARTIES ACKNOWLEDGED THAT NO LONGER THE AMOUNT IS RECEIVABL E BY THE ASSESSEE AT THE END OF THE RELEVANT ACCOUNTING YEAR. 7 . BEFORE US, THE LD. COUNSEL SUBMITTED THAT NAMES AND ADDRESSES OF ALL THE PARTIES ALONG WITH THE CONFIRMATION OF ACCOUNT WERE FILED , WHEREIN THEY HAVE DULY CONFIRMED THAT IN EARLIER YEARS TH ERE WERE RECEIVABLE BALANCE AND EITHER THEY HAVE WRITTEN OFF AS BAD DEBT IN EARLIER YEAR S OR HAVE CONFIRMED THE PART OF THE DEBT. HOWEVER T HIS DOES NOT MEAN THAT THE ASSESSEE HAD SHOWN ANY BOGUS LIABILITY OR THERE IS A CESSATION OF LIABILITY IN THIS YEAR. B EFORE US , THE ASSESSEE HAS FURNISHED A DETAILED CHART GIVING OUT THE VARIOUS EVIDENCES WHICH WERE FILED BEFORE THE CIT(A) AND THE ASSESSING OFFICER IN SUPPORT OF THE CONTENTION THAT ASSESSEES TREATMENT OF L I ABILITY IN THE BALANCE SHEET WAS GENUINE AND TH ERE WAS NO CESSATION OF LIABILITY IN THIS YEAR. HE ALSO FILED COMPILATION SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 5 OF CASE LAWS FOR THE PROPOSITION THAT ADDITION U/S 41(1) COULD NOT BE MADE WHEN THE LIABILITY HAS NOT BEEN WRITTEN BACK IN THE PROFIT AND LOSS ACCOUNT BY THE ASSESSEE. THE LIST OF SU CH DECISIONS AS RELIED UPON BY THE LD. COUNSEL ARE AS UNDER: A CIT VS SHRI VARDHMAN OVERSEAS LTD (2011) 16 TAXMAN.COM350 (DEL - HC) B CIT VS SMT SITA DEVI JUNEJA (2010) 325 ITR 593 (P&H - HC) C CIT VS. JAIN EXPORTS PVT LTD (2013) 85 CCH 066 (DEL HC) D CIT VS. G.K. P ATEL & CO. (2013) 212 TAXMAN 384 (GUJ - HC) E AASIA BUSINESS VENTURES PVT LTD. ITA NO.430/MUM/2011 F CIT VS BHOGILAL R. ATARA 43 TAXMANN.COM 55(GUJ HC) G CIT VS. ENAM SECURITIES PVT LTD (2012) 345 ITR 64 (BOMBAY HIGH COURT) H ITO VS MAHARASHTRA STATE CO - OPERATIVE (2012) 31 CCH 462 (MUM ITAT) 8 . ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON THE REMAND REPORT OF THE ASSESSING OFFICER AS WELL AS THE ORDER OF THE CIT(A) AND SUBMITTED THAT EACH AND EVERY PARTIES HAVE BEEN ANALYZED I N DETAIL BY TH E LD. CIT(A) FOR ARRIVING TO TH IS CONCLUSION, HENCE THE ORDER OF THE CIT(A) SHOULD BE AFFIRMED. 9 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIALS PLACED ON RECORD. THE PARTY WISE DETAILS OF ADDITION S CONFIRMED BY THE CIT(A) , O N THE ACCOUNT OF REMISSION OR CESSATION OF LIABILITY ARE AS UNDER: SR . N O . NAME OF THE CREDITORS AMOUNT OF REMISSION OR CESSATION OF LIABILITY IN RS. A) PARTIES DISCLOSING THE DEBT AS ON 31/3/07 OF RS. NIL SINCE WRITING OFF THE DEBT IN EARLIER/SUBSE QUENT YEARS 1 SET INDIA LTD.(THEREAFTER KNOWN AS SONY TV) 12,74,107 2 STAR (INDIA) PVT LTD. 6,61,591 3 SUN TV NETWORK 2,75,029 4 VIJAY TELEVISION PVT LTD 4,71,884 5 THREE BROTHERS & FILMS 6,86,801 B) PARTIES CONFIRMING THE DEBT IN PART 6 MTV 5,52,103 7 RACEME DESIGNS 22,606 8 SAHARA INDIA 24,551 C) PARTIES TO WHOM NOTICE U/S 131 IS NOT SERVED 9 CINTEL INDIA 1,57,757 10 RACHANA ADVERTISING AND MARKETING 7,97,643 11 REMINISCENT INDIA TELEVISION PVT LTD 6,37,500 12 SURUCHI COM MUNICATIONS 7,99,785 SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 6 1 0 . THE ASSESSEES CASE HAD BEEN THAT THESE PARTIES HAVE EITHER CONFIRMED THE RECEIVABLE BALANCE OR HAVE WRITTEN OFF THE DEBT IN THE EARLIER YEAR WITHOUT INFORMING THE ASSESSEE. WHEREAS, THE DEPARTMENTS CASE HAVE BEEN THAT THE ASSES S EE HAS MOSTLY FAILED TO PROVE THAT THESE LIABILITIES WERE OUTSTANDING AS ON THE DATE OF THE BALANCE SHEET I.E. ON 31 ST MARCH, 2007. WE WILL DISCUSS THESE PARTIES IN BRIEF : I ) SET INDIA LTD (NOW KNOWN AS S U N TV) (RS. 12,74,160/ - ) : FROM THE PERUSAL OF THE MA TERIAL PLACED ON RECORD, IT IS SEEN THAT THE ASSESSEE HAS DISCLOSED THE LIABILITY IN HER BOOKS OF ACCOUNT AND ALSO IN THE BALANCE SHEET FROM LAST FIVE YEARS. THE SAID PARTY HAS FILED SEVERAL CIVIL & CRIMINAL SUITS AGAINST THE ASSESSEE FOR THE RECOVERY OF O UTSTANDING DUES OF RS. 15,9 1 ,100/ - . THEREAFTER , THE SAID DEBTOR HAS WRITTEN OFF THE DEBT IN THE SUBSEQUENT YEAR I.E. A. Y . 2008 - 09. ONCE THE PARTY HAS ACKNOWLEDGE D THAT AMOUNT IS RECEIVABLE FROM THE ASSESSEE AND HAS ALSO FILED CIVIL /CRIMINAL SUITS , THEN IT CANNOT BE HELD THAT THE LIABILITY SHOWN BY THE ASSESSEE IN HER BALANCE SHEE T IS EITHER NOT GENUINE OR H AS CEASED TO EXIST. THUS, ADDITION OF R S. 12,74,107/ - SHOWN IN THE NAME OF THIS CREDITOR IS DELETED. II ) STAR ( INDIA ) PVT LTD (RS. 6,61,591/ - ) : THE ASSE SSEE HAD SHOWN TH IS LIABILITY IN THE BOOKS OF ACCOUNT AND IN THE BALANCE SHEET SINCE LAST FIVE YEARS, WHICH HAS NOT BEEN WRITTEN BACK IN THE BOOKS OF ACCOUNT T I LL THIS YEAR. CONFIRMATION OF ACCOUNT AS ON 31.03.2007 FOR THE OUTSTANDING BALANCE WAS ALSO FILE D ALONG WITH PAN AND IT R ACKNOWLEDGEMENT OF THE PARTY. THE ONLY GROUND FOR DISBELIEVING THE LIABILITY BY THE ASSESSING OFFICER IS THAT , IN RESPONSE TO NOTICE U/S 131, THE SAID PARTY HAS INFORMED THAT THERE WE RE NO TRANSACTIONS WITH THE ASSESSEE DURING THE FINANCIAL YEARS 2003 - 04 TO 2006 - 07. ON THE BASIS OF THIS INFORMATION, THE ASSESSING OFFICER HAS DRAWN ADVERSE CONCLUSION THAT THERE ARE NO DUES PAYABLE BY THE ASSESSEE TO SUCH A CREDITOR. IN OUR OPINION T HIS CANNOT BE THE BASIS OR GROUND FOR MAKING THE SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 7 ADD ITION U/S 41(1) , FIRSTLY, BECAUSE THE ASSE S SEES CLAIM HAS BEEN THAT THIS AMOUNT IS PAYABLE MUCH PRIOR TO FINANCIAL YEAR 2003 - 04; AND SECONDLY, IT IS NOT BORNE OUT FROM THE INFORMATION THAT THE SAID PARTY HAD COMPLETELY DENIED EITHER THE AMOUNT RECEIVABLE OR HAS WRITTEN OFF THE AMOUNT RECEIVABLE IN THE EARLIER YEARS. THUS, THERE IS NO POINT IN TREATING THE SAID AMOUNT AS CESSATION OF LIABILITY IN THIS YEAR , WITHIN THE AMBIT OF SECTION 41(1). III ) SUN TV NETWORK (RS. 2,7 5 ,029/ - ) : IN THIS C ASE, THE PARTY IN RES PONSE TO SUMMONS U/S 131 HAD APPEARED AND STATEMENT ON OATH WAS RECORDED WHEREIN, THEY HAVE ADMITTED THAT IT HAS DONE BUSINESS WITH THE ASSESSEE BUT THEY HAVE CATEGORICALLY STATED THAT THERE WAS NO AMOUNT OUTSTANDING IN THE NAME OF THE ASSESSEE. AS PER THE SAID PARTY T HE TRANSACTION HAS BEEN SETTLED UPTO 31.03.2005 AND THERE ARE NO TRANSACTION S IN SUBSEQUENT YEAR. IF THE SAID PARTY HAS CONFIRMED THAT THE ACCOUNTS HAVE BEEN SETTLED UPTO 31 ST MARCH, 2005 , THEN WITHOUT THERE BEING A N Y REBUTTAL FROM THE SIDE OF THE ASSESSEE , WITH EVIDENCE, IT CANNOT BE HELD THAT IT IS STILL RECEIVABLE AND THE CLAIM OF THE SAID PARTY IS OUTSTANDING AS ON THE DATE OF BALANCE SHEET . IN SUCH A SITUATION, IT CAN BE OSTENSIBLY HELD THAT THERE IS A REMISSION OF LIABILITY AND SAME CAN B E TAXED U/S 41(1) IN THIS YEAR . THUS, AMOUNT OF RS. 2,75,0 2 9/ - IS CONFIRMED. IV ) VIJAYA TELE VISION PVT LTD ( RS. 4,7 1 ,884/ - ) : WITH REGARD TO THIS PARTY ASSESSEE HAD FILED CONFIRMATION OF ACCOUNTS OF THE PARTY FOR THE THREE YEARS ENDING ON 31.03.2004, 31.03.2 005 & 31.03.2006. THE ASSESSEES CONTENTION HAD BEEN THAT THE PAYMENT WAS RECEIVED BY THE SAID PARTY IN THE AY 2004 - 05 WHICH WAS DIRECTLY FROM THE ASSESSEES CUSTOMERS AND WAS APPROPRIATED BY IT FROM THE ASSESSEES ACCOUNT. IN RESPONSE TO SUMMON U/S 131, C HARTERED ACCOUNTANT OF THE SAID PARTY HAD APPEARED AND HAS CONFIRMED THAT IT HAS DONE BUSINESS WITH THE ASSESSEE FROM FIN ANCIAL YEARS 2003 - 04 TO 2004 - 05 AND THERE IS NO SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 8 AMOUNT OUTSTANDING IN THE NAME OF THE ASSESSEE AND PART OF SUM OF RS. 3,9 8 ,263/ - HAVE B EEN WRITTEN OFF IN THE YEAR 2005 - 06. THUS, THE ASSESSEE HAS FAILED TO JUSTIFY AS TO H OW THIS LIABILITY IS STILL OUTSTANDING. I F THE PARTY HAS WRITTEN OFF THE DEBT IN THE EARLIER YEAR , T HEN THE SAME AMOUNTS TO CESSATION OF LIABILITY IN THE HANDS OF THE ASSE SSEE , CHARGEABLE TO TAX U/S 41(1). THE ASSESSEE WHO HAS SHOWN THIS AMOUNT AS LIABILITY HAS ONUS TO PROVE THAT THE LIABILITY IS CONTINUING AND BONA FIDELY INTENDS TO PAY. IN WAKE OF THESE EVIDENCES, IT CANNOT BE HELD THAT THE LIABILITY OF THIS PARTY IS STIL L CONTINUING , AND MERELY BECAUSE THE ASSESSEE HAS SHOWN IT AS LIABILITY AND OTHER PARTY HAS NOT RECOGNIZED IT AS A RECEIVABLE AT ITS END , IT DOES NOT LEAD TO AN INFERENCE OF CONTINUING LIABILITY . THUS, ADDITION OF RS. 4,71,884/ - HAS RIGHTLY BEEN CONFIRMED BY CIT(A) . V ) THREE BROTHERS FILMS (RS. 6,86,801/ - ) : THE ASSESSEE HAD FILED A COPY OF CONFIRMATION FROM THE SAID PARTY, WHICH HAS CONFIRMED THE OUTSTANDING AMOUNT OF RS. 6,20,240/ - AS ON 31.03.2004. THE ASSESSING OFFICER HELD THAT NO OTHER EVIDENCE SUCH AS INCOME TAX RETURN AND LEDGER ACCOUNT OF THE PARTY HAVE BEEN FURNISHED. IF THE SAID PARTY HA S DULY ACKNOWLEDGED THAT LIABILITY EXIST IN THE EARLIER YEAR AND IT STILL RECOGNIZES AS RECEIVABLE FROM THE AS S ESSEE , THEN IT CANNOT BE HELD THAT THERE IS A CESSATION OF LIABILITY IN THIS YEAR AND ACCORDINGLY , THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THIS PARTY ST ANDS DELETED . VI ) M T V ASIA LD C (RS . 5,52,103 / - ) : IN RESPECT OF THIS PARTY, THE ASSESSEE HAS FILED A COPY OF CONFIRMATION OF ACCOUNT , H OWEVER IN THE STATEMENT RECORDED ON OATH, THE TAXATION MANAGER OF THE MTV ASIA HAS STATED THAT THEY HAD TRANSACTION WITH THE ASSESSEE IN THE FINANCIAL YEAR 2003 - 04 AND 2005 - 06. THEY HAVE ONLY CONFIRMED AN AMOUNT OF RS. 8,262/ - AS OUTSTANDING AND BALANCE HA S BEEN WRITTEN OFF BY THEM IN THE FINANCIAL YEAR 2008 - 09. THE ASSESSEES CASE HAD BEEN THAT IT HAS SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 9 PRODUCED PURCHASE BILL OF R S. 5,35,500/ - DATED 31.10.2002 WHICH REMAINED OUTSTANDING AND IT HAS NOT BEEN DENIED THAT THE SAID PURCHASE BILL IS BOGUS. EVEN IF THAT PARTY HAS WRITTEN OFF THE OUTSTANDING AMOUNT OF RS. 8,262/ - IN SUBSEQUENT YEAR, T HI S DOES NOT LEAD T O ANY INFERENCE THE LIABILITY SHOWN BY THE ASSESSEE IN THIS YEAR H AS CEASED TO EXIST. FOR DISPUTING FOR THE QUANTUM OF LIABILITY, THE ASSE S SEE HAD ALR EADY PRODUCED A PURCHASE BILL TO THE TUNE OF RS. 5,35,500/ - , THEREFORE, IT CANNOT BE HELD THAT THE AS S ESSEE S LIABILITY IS NOT GENUINE AND, THEREFORE, IT CANNOT BE TREATED AS CESSATION OF THE LIABILITY IN THIS YEAR. THUS AMOUNT OF RS. 5,52,103/ - STANDS DEL ETED. VII ) RACE ME DESIGN (RS. 22,600/ - ) : IN RESPECT OF THIS PARTY , THE ASSESSEE HAS FILED CONFIRMATION OF ACCOUNT AND ALSO INFORMED THAT IT HAS MADE PAYMENT IN SUBSEQUENT YEAR TO THESE PARTIES F OR RS. 1,57,000/ - . THIS FACT HAS NOT BEEN DISPUTED AND ONLY POI NT OF DISPUTE IS THAT THE SAID PARTY HAS SHOWN LESSER AMOUNT OF LIABILITY IN ITS BOOKS OF ACCOUNTS. ONCE THE ASSESSEE IS SHOWING THE LIABILITY AS PER HER BOOKS OF ACCOUNTS AND ALSO THE FACT THAT PAYMENT HAS BEEN MADE IN THE SUBSEQUENT YEAR , THEN IT CANNOT BE HELD THAT THIS LIABILITY HAS CEASED TO EXIST IN THIS YEAR, THEREFORE, ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) STANDS DELETED. VIII ) S AHARA INDIA LTD. (RS. 24,551/ - ) : THE ASSESSEE HAD INFORMED THAT THE AMOUNT WAS SETTLED IN THE F INANCIAL YEAR 2009 - 10 AND THE PARTY HAD CONFIRMED RS. 7,61,201/ - AS AGAINST RS. 7,91,752/ - SH O W N BY THE ASSESSEE. THUS M ERE LY BECAUSE THE PARTY HAS CONFIRMED THE PART OF THE DEBT, IT CANNOT BE HELD THAT THE ASSESSEES LIABILITY SHOWN IN THE BOOKS OF ACCOUN TS IS NOT GENUINE OR THERE IS A CESSATION OF LIABILITY IN THIS YEAR. ACCORDINGLY, THE SAID AMOUNT STANDS DELETED. SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 10 IX ) CINTE L INDIA (RS. 1,57,757/ - ) : THE ASS ESSEE HAD FILED A COPY OF PURCHASE BILLS BEFORE THE ASSESSING OFFICER AND ALSO SUBMITTED THAT THE S AID LIABILITY IS APPEARING FROM THE EARLIER YEARS. HOWEVER, THE ASSESSING OFFICER HELD THAT THE NOTICE ISSUED TO THE SAID PARTY HAVE NOT BEEN SERVED, TO WHICH, THE ASSESSEE HAD SUBMITTED THAT ADDRESS MENTIONED IN THE PRINTED PURCHASE BILL ARE DIFFERENT AND LD. ASSESSING OFFICER OUGHT TO HAVE ISSUED NOTICE ON THE ADDRESSES MENTIONED IN PURCHASE BILL. ONCE THE ASSESSEE HAD SHOWN THIS LIABILITY , WHICH HAS NOT BEEN FOUND TO BE INCORRECT THE SAME CANNOT BE HELD THAT IT HAS CEASED TO EXIST IN THIS YEAR, THEREFORE , ADDITION MADE ON THIS AMOUNT STANDS DELETED. X ) RACHANA ADVERTISING AND MARKETING (RS. 7,97,643/ - : THE LIABILITY ON THIS ACCOUNT IS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE FOR LAST FIVE YEARS. THIS HAS NOT BEEN WRITTEN BACK. THE ASSESSEE HAS FILED AN AFFIDAVIT O F SAID SUPPLIERS CONFIRMING THE BALANCE AMOUNT OF RS. 6,97,643/ - AND ALSO CONFIRMATION OF THE AMOUNT AS ON 31 ST MARCH, 2007 ALONG WITH THE SAMPLE PURCHASE BILLS. THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER ON THE GROUND THAT NOTICE U /S 131 COULD NOT BE SERVED DUE TO CHANGE OF ADDRESS. THIS CANNOT BE THE GROUND FOR DISBELIEV ING THE LIABILITY FOR THE REASON THAT ASSESSING OFFICER SHOULD HAVE ISSUED NOTICE ON THE ADDRESS PRINTED IN THE PURCHASE BILL WHICH HAS NOT BEE N DONE AND ACCORDINGL Y, THE SAID LIABILITY IS GENUINE AND IT CANNOT BE TAXED IN THIS YEAR. THUS, ADDITION OF RS. 7,97,643/ - STANDS DELETED. XI ) REMIS C ENT INDIA PVT. LTD. (RS. 6,3 7 ,500/ - ) : THIS LIABILITY HAS BEEN SHOWN IN THE BOOKS OF THE ASSESSEE FOR OVER FIVE YEARS, WHICH HAS NOT BEEN WRITTEN BACK. IN SUPPORT, THE ASSESSEE HAS FILED CONFIRMATION OF AMOUNT DISCLOSING OUTSTANDING BALANCE OF RS. 50,000/ - . THE ASSESSEES CASE HAS BEEN THAT, IN SUCH CONFIRMATION , ONE SALE BILL DATED 11.07.2001 OF RS. SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 11 6,36,520/ - HAS NOT BEEN CONSIDER ED BY SUCH SUPPLIER, WHICH WAS THE BILL ON ACCOUNT OF M/S FEM K PRODUCTS WHICH IS ASSESSEES CUSTOMER. THE ASSESSEE HAD DISCLOSED THIS LIABILITY UNDER THE HEAD OF THIS PARTY AND ALSO CORRESPONDING DEBTOR OF M/S FEM K PRODUCTS IN HER BOOKS OF ACCOUNTS . THIS FACT HAS TO BE CONTROVERTED BY THE ASSESSING OFFICER, WHICH HAS NOT BEEN DONE ON THE GROUND THAT NOTICE U/S 131 COULD NOT BE SERVED. IN OUR CONSIDERED OPINION, THE SAID ADDITION CANNOT BE MADE ON THE GROUND THAT THE LIABILITY HAS CEASED TO EXIST BECAUSE T HE ASSESSEE HAD SHOWN TH E LIABILITY AMOUNT BY WAY OF BILL AND ALSO BY EXPLAINING THAT DEBTOR IN HER BOOKS OF ACCOUNT IS M/S FEM K PRODUCTS . THIS FACT HAS NOT BEEN E N QUIRED BY THE ASSESSING OFFICE R . T H US THE ADDITION OF RS. 6,37,500/ - STANDS DELETED. XII ) SURU CHI COMMUNICATION (RS. 7,9 9 ,785/ - ) : THE ASS ESSEE HAS DISCLOSED THIS LIABILITY IN HER BOOKS FOR LAST FIVE YEARS, WHICH HAS NOT BEEN WRITTEN BACK. IN SUPPORT, THE ASSESSEE HAS FILED CONFIRMATION OF ACCOUNT DISCLOSING THE BALANCE AND ALSO THE PAN. THE ASSES SING OFFICER HAS CONFIRMED THE SAID ADDITION ON THE GROUND THAT NOTICES U/S 131 HAS NOT BEEN SERVED. ONCE THE CONFIRMATION HAS BEEN FILED CONFIRMING THE OUTSTANDING AMOUNT , THEN SO FAR AS THE LIABILITY SHOWN BY THE ASSESSEE IN HER ACCOUNTS CANNOT BE DISBEL IEVED ON THE GROUND THAT THE LIABILITY CEASED TO EXIST AND OR THERE IS A CESSATION OF LIABILITY IN THIS YEAR. ACCORDINGLY THE SAID ADDITION STANDS DELETED. 12. IN VIEW OF THE FINDING GIVEN ABOVE, THE GROUNDS RAISED BY THE ASSESSEE ARE TREATED AS PARTLY AL LOWED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JU LY , 2015. SD/ - SD/ - ( . . ) ( ) ( G S PANNU ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 24 TH JU LY , 2015 SMT. MAMTA H MALHOTRA ITA NO. 19 22 /M/20 1 2 12 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 3 1 , MUMBAI 4 ) THE CIT 20 , MUMBAI . 5 ) , , / THE D.R. B BENCH, MUMBAI. 6 ) COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS