New India Silk Mills Trust, Surat V. The Income tax Officer,Ward-3(3), Surat

ITA 3169/AHD/2010

• Counselvise Citation: 316920514 RSA 2010
• Duration Of Justice: 3 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 30-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: RN VEPARIAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMADABAD , , , , BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND .., SHRI T.R. MEENA, ACCOUNTANT MEMBER !.. , ' # $ # $ # $ # $ ITA NO. 3169/AHD/2010 ASSESSMENT YEAR :2007-08 NEW INDIA SILK MILLS TRUST, C/O. ARUNBHAI J. SAKKAI, 4/330, 2 ND FLOOR, SHRI KRISHNA NIWAS, DUDHARA SHERI, BEGAMPURA, SURAT. V/S . THE INCOME-TAX OFFICER, WARD 3(3), SURAT. PAN NO. A AATN1891N (APPELLANT) .. (RESPONDENT) %& ' ( BY APPELLANT SHRI R. N. VEPARI, A.R. )%& ' ( /BY RESPONDENT SHRI O. P. BHATEJA, SR. D.R. *+, ' -' /DATE OF HEARING 09.10.2013 ./0 ' -' /DATE OF PRONOUNCEMENT 05.12.2013 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WHI CH HAS EMANATED FROM THE ORDER OF CIT(A)-II, SURAT, DATED 08.10.201 0 FOR ASSESSMENT YEAR 2007-08. THE SOLE GROUND OF ASSESSEE IS AGAINST CO NFIRMING ADDITION OF RS.12,76,462/- U/S. 41(1A) OF THE ACT. 2. THE A.O. OBSERVED THAT ASSESSEE WAS A PRIVATE BE NEFICIARY TRUST AND PRESENTLY NOT CARRYING OUT ANY BUSINESS ACTIVITY. THE A.O. NOTICED FOLLOWING BALANCE OUTSTANDING: I. BALANCE OUTSTANDING OF BENEFICIARIES RS. 1,90, 413/- ITA NO. 3169/AHD/10 A.Y. 07-08 PAGE 2 II. BALANCE OUTSTANDING FOR DEPOSITORS RS. 22,56,3 48/- III. BALANCE OUTSTANDING FOR OTHERS RS. 12,76,462/ -. THE A.O. GAVE NOTICE U/S. 41(1)(A) OF THE IT ACT, W HY OUTSTANDING IN THE NAME OF VARIOUS PERSONS SHOULD NOT BE ADDED IN THE INCOM E OF THE ASSESSEE. THE ASSESSEE OBJECTED THE PROPOSAL MADE BY THE A.O. ON THE GROUND THAT LIABILITY HAD NOT SEIZED AND CERTAINLY THEY HAD NOT SEIZED DU RING THE YEAR. HE RELIED UPON NUMBERS OF DECISIONS BEFORE THE A.O. THE A.O. HELD THAT THE ASSESSEE DID NOT PROVIDE THE DETAILS OF THE PARTIES, REASONS FOR NOT PAYING THE SAID AMOUNTS OF INTEREST, THE EFFORTS MADE, IF ANY TO PA Y OUTSTANDING LIABILITY. THE ASSESSEE CLAIMED THAT THESE OUTSTANDING WERE RELATE D TO 1990. THE ASSESSEE DID NOT PROVIDE FURTHER DETAILS OF THESE TRANSACTIO NS AND EFFORTS OF THE PAYMENT. THE A.O. ALSO RELIED UPON VARIOUS CASE LAWS AND AFT ER CONSIDERING THE ASSESSEES REPLY, IT WAS HELD THAT LIABILITY SHOWN OUTSTANDING AGAINST THE INTEREST AMOUNTING TO RS.12,52,592/- AND OTHER LIAB ILITY AMOUNTING TO RS.23,870/- WAS CONSIDERED TO BE SEIZED AS ON 31.03 .2007. THUS, HE MADE ADDITION OF RS.12,76,462/-. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE A SSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS CONFIRMED THE ADDITION BY OBSERVING AS UNDER: 5.1 I HAVE DULY CONSIDERED THE SUBMISSION OF THE A PPELLANT AND THE DISCUSSION MADE IN THE ASSESSMENT ORDER AND FIND TH AT THE APPELLANT HAS NOT FURNISHED ANY MATERIAL SUBMISSION DURING TH E COURSE APPELLATE PROCEEDINGS AND THE SUBMISSION MADE VIDE LETTER DATED 23.08.10 IS NOT DIFFERENT FROM THE SUBMISSION MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH HAS BEEN FULLY DEA LT WITH BY THE ASSESSING OFFICER IN PAGES 2 TO 8 OF THE ASSESSMENT ORDER. IN FACT, ITA NO. 3169/AHD/10 A.Y. 07-08 PAGE 3 THE APPELLANT HAS NOT FURNISHED ANY INFORMATION EIT HER, IN RESPECT OF INTEREST EXPENSE OF RS.12,52,592/- WHICH HAS BEEN D EBITED IN THE P&L ACCOUNT BY APPELLANT IN THE EARLIER YEARS, VIZ. F.Y. 1990-91 OR EARLIER, BUT STILL OUTSTANDING, OR IN RESPECT OF OT HER BALANCES OUTSTANDING TO THE EXTENT OF RS.23,870/-. IN SO FA R AS THE DECISIONS RELIED UPON ARE CONCERNED, ON FACTS, THEY ARE NOT A PPLICABLE AT ALL. IF A LIABILITY WHICH IS OUTSTANDING FROM 1990 ONWARDS TILL MARCH 2007, AND NOT WRITTEN OFF, WHAT OTHER REASON CAN BE THAN APPELLANT NOT WILLING TO PAY TAXES ON THAT, AND IN THAT CASE THE VERY PURPOSE OF SECTION 41(1) IS DEFEATED AND IT BECOMES REDUNDANT IN THE ACT, I, THEREFORE, DO NOT FIND ANY REASON TO DEVIATE FROM T HE FINDING GIVEN BY THE ASSESSING OFFICER AND CONFIRM THE ABOVE ADDITIO N. THE FIRST GROUND OF APPEAL IS, ACCORDINGLY, DISMISSED. 4. NOW THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT THE LIABILITY IS CONTINUED TO BE CAR RY FORWARDED AND IT CANNOT BE CONSIDERED TO HAVE SEIZED. HE AGAIN RELIED UPON VA RIOUS CASE LAWS, WHICH WERE RELIED BEFORE THE A.O. HE FURTHER RELIED IN C ASE OF M/S. HARDIK FABRICS, SURAT VS. ITO IN ITA NO.58/AHD/2011 FOR A.Y. 2007-08, WHEREIN THE LIABILITY WAS EXISTED ON ACCOUNT OF SUNDRY CREDITOR SHOWN IN THE BALANCE SHEET. THE HONBLE ITAT C BENCH HAS DELETED THE ADDITION U/S .41(1) OF THE IT ACT. IT WAS FAIRLY ADMITTED BY THE AO THAT THE ASSESSEE DID NOT HAVE ANY DETAIL OF LIABILITY BUT THE UNILATERAL ACTION IS NOT PERMITTE D UNDER THE LAW. AT THE OUTSET, LD. SR. D.R. RELIED UPON THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS SHOWN LIABILITY OF BANK INTEREST AT RS.12,52,592/- IN THE LIST OF CREDITORS WHICH PERTAINED TO 1990. THE A.O. ASKED TO FURNISH THE DETAILS, NAME, AND ADDRESS OF THE PARTIES FROM THE APPELLANT. THE DETAILS HAD ITA NO. 3169/AHD/10 A.Y. 07-08 PAGE 4 NOT BEEN FILED BY THE APPELLANT BEFORE THE LOWER AU THORITIES AS WELL AS BEFORE US. IN ABSENCE OF DETAILS THE A.O. CANNOT VERIFY W HAT TREATMENT WAS GIVEN BY THE RECIPIENT IN ITS BOOK. IT IS CLEAR THAT THE CR EDITORS ARE VERY OLD AND REASONS FOR NOT PAYING HAS NOT BEEN EXPLAINED BY THE ASSESS EE WITH EVIDENCES. THEREFORE, WE HAVE CONSIDERED VIEW THAT THE LIABILI TY IS NO LONGER REQUIRED TO BE KEPT WHEN NO VERIFICATION CAN BE MADE FROM THE B OOK OF RECIPIENT. THUS, WE CONFIRM THE ORDER OF THE A.O. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 05.12.2013 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA 1 1 1 1 ' '' ' )-2 )-2 )-2 )-2 320- 320- 320- 320- / COPY OF ORDER FORWARDED TO:- 1. %& / APPELLANT 2. )%& / RESPONDENT 3. - *7 / CONCERNED CIT 4. *7- / CIT (A) 5. 2; )-+ , , / DR, ITAT, AHMEDABAD 6. = >? / GUARD FILE. BY ORDER/ 1 , @/ B , $