ITO, New Delhi V. M/s. Hero Global Design Ltd., New Delhi

ITA 2851/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5358 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SOIN KAPILA
• Assessee Lawyers: NIRMAL SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH D, NEW DELHI BEFORE SMT. BEENA A PILLAI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2851/DEL/2015 AY: 2011-12 ITO WARD 11(2), NEW DELHI. VS . HERO GLOBAL DESIGN LTD. 603, INTERNATIONAL TRADE TOWER, NEHRU PLACE, NEW DELHI. AABCH0102L (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. NAINA SOIN KAPILA, SR. DR RESPONDENT BY : SH. NIRMAL SINGH, CA DATE OF HEARING : 24/01/2019 DATE OF PRONOUNCEMENT : 29/01/2019 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST OR DER DATED 24/02/15 PASSED BY LD. CIT (A)-4, NEW DELHI ON FOLL OWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 2,08,00,000/- U/S 41(1), MADE ON ACCOUNT OF NON VER IFICATION OF STATIC SUNDRY CREDITORS FOR SEVERAL YEARS. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY GROUND OF APPEAL RAISED ABOVE THE TIME OF HEARING. BRIEF FACTS OF THE CASE ARE AS UNDER : 2. ASSESSEE FILED ITS RETURN OF INCOME DECLARING NI L ON 30/09/11. THE RETURN WAS PROCESSED UNDER SECTION 143 (1) OF THE A CT AND WAS SELECTED FOR SCRUTINY. SUBSEQUENTLY, NOTICE UNDER SECTION 14 3 (2) WAS ISSUED ITA NO. 2851/DEL/2015 2 FOLLOWED BY NOTICE UNDER SECTION 142 (1) ALONG WITH QUESTIONNAIRE TO ASSESSEE. IN RESPONSE TO STATUTORY NOTICES, ASSESSE E APPEARED FROM TIME TO TIME AND FILED NECESSARY DETAILS AS CALLED FOR. 3. LD.AO OBSERVED THAT ASSESSEE WAS PROVIDING R&D F OR DEVELOPING AND DESIGNING OF PARTS FOR AUTOMOTIVE INDUSTRY. IT WAS OBSERVED THAT AS PER SCHEDULE VI OF BALANCE SHEET, A SUM OF RS.2,08, 00,000/- HAS BEEN SHOWN AS SUNDRY CREDITORS, AS ON 31/03/11. HE ALSO OBSERVED THAT IDENTICAL SUM WAS ALSO SHOWN AS ON 31/03/10. LD.AO ACCORDINGLY CALLED FOR DETAILS OF SUNDRY CREDITOR AS ON 31/03/10, 31/0 3/11, 31/03/12 AND 31/03/13 IN ORDER TO VERIFY AS TO WHETHER IT IS A C ASE OF STATIC LIABILITY. IN RESPONSE TO QUERY RAISED, ASSESSEE SUBMITTED THAT T HE SUM IS SHOWN AS ON 31/03/10, 31/03/11, 31/03/12 AND 31/03/13 WAS CL EAR CASE OF STATIC LIABILITY. LD.AO THUS CALLED UPON ASSESSEE T O PROVE AS TO WHY IT IS NOT A CASE OF CESSATION OF LIABILITY LOOKING AT ITS STATIC NATURE FROM PAST SEVERAL PRECEDING ASSESSMENT YEARS. ASSESSEE SUBMIT TED THAT IT IS NOT A CASE OF LOSS/EXPENDITURE OR TRADING LIABILITY AND T HERE IS NO UNILATERAL OR BILATERAL ACT OF REMISSION OR CESSATION OF LIABILIT Y. HOWEVER IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCES, LD.AO MADE ADDITION I N THE HANDS OF ASSESSEE UNDER SECTION 41 (1) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF LD. AO, ASSESSEE PREFE RRED APPEAL BEFORE LD.CIT (A), WHO DELETED THE ADDITION. 5. AGGRIEVED BY ORDER OF LD.CIT (A), ASSESSEE IS IN APPEAL BEFORE US NOW. 6. LD.SR DR VEHEMENTLY PLACED RELIANCE UPON ORDER O F LD.AO AND SUBMITTED THAT IT IS UPON ASSESSEE TO PROVE THAT IT IS NOT A CASE OF REMISSION OR CESSATION OF LIABILITY AND ASSESSEE HA S NOT BEEN ABLE TO DISCHARGE ITS ONUS WITH ANY SUPPORTING DOCUMENT OR PROOF. ITA NO. 2851/DEL/2015 3 7. ON THE CONTRARY, LD.AR SUBMITTED THAT CONFIRMATI ON DATED 22/01/14 ISSUED BY M/S HERO MOTORS LTD. SHOWED THAT , THESE ADVANCES WERE TO ASSESSEE, WHICH WAS FILED BEFORE LD.CIT (A) , AND IS PLACED IN PAPER BOOK BEFORE US AT PAGES 6. IT WAS FURTHER SUB MITTED BY LD.AR THAT AMOUNT DUE IS APPEARING AS RECEIVABLES IN THE BOOKS OF M/S HERO MOTORS LTD., AND THAT ASSESSEE HAS NEVER CLAIMED THE SAID AMOUNT AS LOSS/EXPENDITURE/TRADING LIABILITY AND THEREFORE PR OVISIONS OF SECTION 41 (1) AND 41 (1) (A) OF THE ACT WOULD NOT BE APPLICAB LE. 8. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. 9. LD.CIT (A) CATEGORICALLY RECORD THAT SAID LIABIL ITY EXISTS IN BOOKS OF ASSESSEE, AND HAS NOT BEEN WRITTEN OFF UNILATERALLY OR BY OTHER PARTY, WHICH IS EVIDENT FROM CONFIRMATION ISSUED BY M/S. H ERO MOTORS CO. LD.SR.DR HAS NOT BEEN ABLE TO BRING ON RECORD ANY D OCUMENTS TO ESTABLISH THAT SAID SUM HAS BEEN TREATED BY ASSESSE E EITHER AS TRADING LIABILITY, OR THAT THERE HAS BEEN REMISSION OR CESS ATION OF LIABILITY IN ORDER TO ATTRACT PROVISIONS OF SECTION 41 (1) OF THE ACT. 10. UNDER SUCH CIRCUMSTANCES, WE ARE SATISFIED WITH VIEW TAKEN BY LD.CIT (A), AND THE SAME IS UPHELD. ACCORDINGLY, GROUNDS RAISED BY REVENUE STANDS DISMI SSED. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/01/2019 SD/- SD/- (PRASHANT MAHARISHI) (B EENA A PILLAI) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED: 29.01.2019 *KAVITA ARORA ITA NO. 2851/DEL/2015 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 25/01/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25/01 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 2 9 / 0 1 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 3 0 / 0 1 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 3 0 / 0 1 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3 0 / 0 1 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER