DCIT 15(2), MUMBAI V. METAL GEMS, MUMBAI

ITA 3046/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2994 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 133A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.3046/MUM/2014 ASSESSMENT YEAR 2009-10 DY. COMMISSIONER OF INCOME TAX-15(2), MATRU MANDIR, ROOM NO.113, GRANT ROAD (W), MUMBAI-400007 / VS. M/S METAL GEMS 85/87, 2 ND PATHAN STREET, 5 TH KUMBHARWADA, MUMBAI-400004 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AADFM0423E / REVENUE BY SHRI VIJAY KUMAR SONI-DR !'# $ / ASSESSEE BY SHRI PRAKASH D. SHAH % & $ ' / DATE OF HEARING : 27/10/2015 & $ ' / DATE OF ORDER: 18/12/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 07/02/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. M/S METAL GEMS ITA NO.3046/MUM/2014 2 THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO H OLDING THAT THE AMOUNT OF RS.13,03,148/- CANNOT BE TAXED U/S 41 OF THE INCOME TAX ACT (HEREINAFTER THE ACT), WHEN THE ASSE SSEE HIMSELF ADMITTED OF HAVING WRITTEN BACK THE SAID AM OUNT FROM SUNDRY CREDITORS, DURING THE COURSE OF SURVEY ACTION U/S 133A OF THE ACT. 2. DURING HEARING, THE LD. DR, SHRI VIJAY KUMAR SO NI, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE G ROUND RAISED BY PLACING RELIANCE UPON THE DECISION IN THE CASE OF DR. S.C. GUPTA VS CIT 248 ITR 782 AND HEERALAL MAGANALA L & COMPANY VS DCIT 96 ITD 113 (MUM.). ON THE OTHER HA ND, THE LD. COUNSEL FOR THE ASSESSEE, SHRI PRAKASH D. S HAH DEFENDED THE CONCLUSION CONTAINED IN THE IMPUGNED O RDER BY CLAIMING THAT THE LIABILITY STILL EXISTING. THIS CL AIM OF THE ASSESSEE WAS NOT CONTROVERTED BY THE LD. DR WITH TH E HELP OF ANY MATERIAL. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OB SERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION M ADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY TH E LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND AN ALYZED, WE NOTE THAT A SURVEY WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE, WHEREIN, THE AMOUNT OF RS.43,41,346/- WAS DECLARED ON ACCOUNT OF WRITING BACK OF CERTAIN SUND RY CREDITORS. WE FIND THAT THROUGH ITS WRITTEN SUBMIS SIONS AND EXPLANATION BEFORE THE LD. COMMISSIONER OF INCOME T AX M/S METAL GEMS ITA NO.3046/MUM/2014 3 (APPEALS), THE ASSESSEE EXPLAINED THE POSITION. NO CONTRARY FACTS WERE BROUGHT TO OUR NOTICE. THE LD. COMMISSIO NER OF INCOME TAX (APPEALS) HAS ALREADY PLACE RELIANCE UPO N THE DECISION FROM HONBLE DELHI HIGH COURT IN CIT VS M/ S HOTLINE ELECTRONICS LTD. (2012) 205 TAXMAN 245 (DEL.) AND C IT VS VARDHMAN OVERSEAS LTD. (343 ITR 408) AND THE TRIBUN AL IN M/S DIVYA VASUNDHARA FINANCERS LTD. VS ITO (ITA NO.331/AHD/2007) AND THE HONBLE MADRAS HIGH COURT IN S. KADER KHAN 300 ITR 157 (MAD.). THE ASSESSEE HAD NOT WRITTEN BACK THE CREDITORS OF RS.13,03,148/- AS IT WAS AWARE THAT SUCH UNPAID CREDIT BALANCE CAN BE ADDED U/S 41 (1) AND THE PARTNER OF THE ASSESSEE TENDER STATEMENT DURING SURVEY. THE LIABILITY STILL EXIST IN THE BALANCE SHEET OF T HE ASSESSEE, THEREFORE, APPLYING THE AFORESAID DECISION FROM HON BLE DELHI HIGH COURT, THE SAME CANNOT BE TAXED U/S 41(1) OF T HE ACT. WE HAVE NOTED THE UNCONTROVERTED FINDING CONTAINED IN THE IMPUGNED ORDER AND MORE SPECIFICALLY IN PARA-5. TOT ALITY OF FACTS, CLEARLY INDICATES THAT THE LIABILITY STILL E XIST IN THE BALANCE SHEET OF THE ASSESSEE, THEREFORE, FOLLOWING THE DECISION FROM THE HONBLE DELHI HIGH COURT IN THE C ASE OF M/S VARDHMAN OVERSEAS LTD. (2012) 343 ITR 408, WHER EIN, THE HONBLE COURT APPLIED THE RATIO LAID DOWN BY HO NBLE APEX COURT IN THE CASE OF M/S SUGAULI SUGAR WORKS, THE S AME CANNOT BE TAXED U/S 41(1), CONSEQUENTLY, WE AFFIRME D THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), RESULTING INTO DISMISSAL OF APPEAL OF THE REVENUE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. M/S METAL GEMS ITA NO.3046/MUM/2014 4 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 27/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 18/12/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.