ITO 8(2)-2, MUMBAI V. DARSHAN L. GANDHI, MUMBAI

ITA 3188/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9337 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Period of limitation; Time period of passing order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI . . , , BEFORE SHRI B. R. BASKARAN, AM AND SHRI SANJAY GAR G, JM ./ I.T.A. NO. 3188/MUM/2012 ( / ASSESSMENT YEAR: 2008-09) INCOME TAX OFFICER-8(2)2, ROOM NO. 212/216A, 2 ND FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 / VS. DARSHAN L. GANDHI BUNGLOW NO. 7, SWADHIN, GOLDEN ACRES CO-OP. SOCIETY, RUIA PARK, MILITARY ROAD, JUHU, MUMBAI-400 049 ! ./' ./PAN/GIR NO. AACPG 8714 D ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !# & ' / APPELLANT BY : SHRI LOVE KUMAR $%!# & ' / RESPONDENT BY : SHRI DEEPAK TRALSHAWALA ( )* & +, / DATE OF HEARING : 04.03.2015 -./0 & +, / DATE OF PRONOUNCEMENT : 13.03.2015 1 / O R D E R PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) (HEREINAFTER R EFERRED TO AS CIT(A)) DATED 24.02.2012. THE REVENUE HAS AGITATED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.42,67,500/-, WHICH WAS MADE BY THE A .O. U/S. 41(1) OF THE ACT ON ACCOUNT OF CESSATION OF LIABILITY OF OUTSTANDING INTEREST S HOWN AS PAYABLE BY THE ASSESSEE TO HIS GROUP CONCERN. 2 ITA NO. 3188/MUM/2012 (A.Y. 2008-09) ITO VS. DARSHAN L. GANDHI 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD BORROWED THE LOAN FROM ITS SISTER CONCERNED M/S. LOK FINANCIERS COMPANY (LFC), AN ASSOCIATION OF PERSONS (AOP) EARLIER TO A.Y. 1997-98. THE INTEREST PAYABLE ON BO RROWED LOAN HAS CONTINUOUSLY SHOWN AS EXPENDITURE AS THE ASSESSEE HAS BEEN FOLLOWING T HE MERCANTILE SYSTEM OF ACCOUNTING. IN THE YEAR A.Y. 2002-03, THE ENTIRE CAPITAL LOAN ACCO UNT WAS PAID OFF/ADJUSTED TOWARDS ALLOCATION OF SHARES. HOWEVER, THE OUTSTANDING ACCU MULATED INTEREST OF RS.42,67,650/- PERTAINING TO A.Y. 1999-2000 AND A.Y. 2002-03 WAS S HOWN AS OUTSTANDING FROM YEAR TO YEAR BASIS. THE SAID INTEREST HAD NOT BEEN PAID BY THE ASSESSEE UPTO THE YEAR UNDER CONSIDERATION AND WAS APPEARING AS OUTSTANDING INTE REST IN THE BALANCE-SHEET OF THE ASSESSEE. WHEN ASKED TO EXPLAIN IN THIS RESPECT, TH E ASSESSEE SUBMITTED THAT LFC HAS BEEN AN AOP AND HAS BEEN IN THE BUSINESS OF FINANCE. THE ASSESSEE HAD BORROWED MONIES FROM THE SAID AOP. DUE TO RESTRICTIONS BROUGHT IN BY THE RBI, THE SAID AOP COULD NOT CARRY ON ITS FINANCE BUSINESS. WHEREAS THE PRINCIPAL AMOUNT WAS REPAID BY THE ASSESSEE, THE INTEREST PAYABLE WAS STILL OUTSTANDING AND THAT THE LIABILITY HAD NOT CEASED TILL THEN. THE A.O., HOWEVER, NOTICED THAT THE ACCRUED INTEREST WA S NOT PAID BY THE ASSESSEE FOR SO MANY YEARS EVEN THOUGH THE ASSESSEE WAS IN THE CAPACITY TO REPAY THE SAME. HE FURTHER OBSERVED THAT LFC, AN AOP TO WHOM THE INTEREST WAS PAYABLE W AS MANAGED BY THE ASSESSEE AND HIS FAMILY MEMBERS. HE, FURTHER, OBSERVED THAT THE ASSE SSEE HAD ADOPTED THE DUBIOUS METHOD TO AVOID PAYMENT OF INTEREST TO THE SAID AOP IN SUC H A WAY THAT THE INTEREST AMOUNT WOULD NEVER BE OFFERED TO TAX. HE OBSERVED THAT LFL (AOP) HAD SWITCHED OVER THE SYSTEM OF ACCOUNTING FROM MERCANTILE TO CASH W.E.F. A.Y. 1998 -99 AND THE INTEREST WHICH WAS PAYABLE BY THE ASSESSEE TO LFC STARTING FROM A.Y. 1 999-2000 ONWARDS WAS NOT SHOWN AS INCOME, AS THE SAME WAS NOT PAID BY THE ASSESSEE. THE ASSESSEE ON THE ONE HAND HAD CLAIMED THE EXPENDITURE ON ACCRUAL BASIS, WHEREAS, THE LFC (AOP) HAD NOT CLAIMED ITS INCOME BECAUSE OF SWITCHING OVER OF ACCOUNTING SYST EM FROM MERCANTILE TO CASH SYSTEM. THE A.O. ALSO OBSERVED THAT IN THE BALANCE-SHEET AN D THE PROFIT AND LOSS ACCOUNT OF LFC FOR A.Y. 2008-09, THE SAID AOP HAD DISTRIBUTED THE SHARE OF PROFIT AMONGST THE FIVE MEMBERS WHO ARE FAMILY MEMBERS OF THE ASSESSEE. THE ASSESSEE HAD ALSO RECEIVED SHARE OF PROFIT OF RS.41,71,321/-. THE A.O. OBSERVED THAT ON THE ONE HAND LFC WAS MAKING THE 3 ITA NO. 3188/MUM/2012 (A.Y. 2008-09) ITO VS. DARSHAN L. GANDHI PAYMENT IN THE FORM OF SHARE OF PROFIT TO THE ASSES SEE BUT ON THE OTHER HAND THE ASSESSEE HAD BEEN SHOWING THE ACCRUED INTEREST PAYABLE OF RS .42,67,550/- SINCE SO MANY YEARS AND THEREBY PREVENTING IT FROM GETTING TAXED. HE OBSERV ED THAT HAD THE LENDER COMPANY NOT CHANGED TO CASH SYSTEM, IT WOULD HAVE TO OFFER THE INTEREST AS ITS RECEIVABLE INCOME, BUT, THE ASSESSEE AND HIS GROUP AOP HAVE MANAGED THE AFF AIRS IN SUCH A DUBIOUS WAY THAT ON THE ONE HAND THE AMOUNT OF INTEREST WAS CLAIMED BY THE ASSESSEE AS DEDUCTION IN HIS P & L ACCOUNT AND ON THE OTHER HAND HE HAD NOT BEEN LET TING THE AMOUNT TO BE OFFERED TO TAX BY HIS SISTER CONCERN, LFC. THE A.O. OBSERVED THAT THIS WAS A METHOD DEPLOYED BY THE ASSESSEE TO AVOID THE TAX. HE, THEREFORE, TREATED T HE SAID AMOUNT AS INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AS IT REPRESENTED AN ARTIFICIAL LIABILITY WHICH ACTUALLY HAD CEASED TO EXIST SINCE LONG WITH AND ACCORDINGLY ADD ED IT TO THE INCOME OF THE ASSESSEE U/S.41(1) OF THE ACT. 3. IN THE FIRST APPEAL, THE LD. CIT(A) DELETED THE DISALLOWANCE SO MADE BY THE A.O. OBSERVING AS UNDER: 2.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. COUNSEL AND GONE THROUGH THE ASSESSMENT ORDER. THE APPELLANT HAD BOR ROWED THE LOAN FROM M/S. LOK FINANCIERS, A.O.P. EARLIER TO ASSESSMENT Y EAR 1997-98. THE INTEREST PAYABLE ON BORROWED LOAN IS BEING SHOWN AS AN EXPENDITURE AS THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG FROM YEAR TO YEAR. IN THE AY. 2002-03, THE ENTIRE CAPITAL LOAN AMOUNT WAS PAID OFF/ADJUSTED TOWARDS ALLOCATION OF SHARES. THEREFORE, WHAT REMAI NS OUTSTANDING WAS ACCUMULATED INTEREST OF RS. 42,67.650/- PERTAINING TO A. Y. 1999-2000. 2002-03. THIS INTEREST HAS NOT BEEN PAID TILL DATE AND APPEARING AS THE OUTSTANDING INTEREST IN THE LATEST BALANCE SHEET OF THE APPELLANT. AT THE SAME TIME, IN THE CASE OF THE FINANCING COM PANY M/S. LOK FINANCIERS FOLLOWING THE RESTRICTIONS BROUGHT IN BY THE R.B.I. THAT IT COULD NOT DO THE FINANCE BUSINESS THE A.O.P. HAD STOPPED ITS BUSINESS OF FINANCE. UNDER THESE CIRCUMSTANCES M/S. LOK FINANCIERS COMPA NY CONSIDERED IT FIT AND COMMERCIALLY EXPEDIENT TO SWITCH OVER TO CASH S YSTEM FROM THE MERCANTILE SYSTEM ACCOUNTING W.E.F. A.Y. 1998-99. T HIS CHANGE HAS BEEN ACCEPTED BY THE DEPARTMENT. ON ACCOUNT OF THE FACT THAT THE M/S. LOK FINANCIERS COMPANY IS NOW FOLLOWING AN DULY ACCEPTE D BY THE DEPARTMENT - THE CASH SYSTEM ACCOUNTING FOR THE RECEIPT & EXPEND ITURE THE COMPANY HAS 4 ITA NO. 3188/MUM/2012 (A.Y. 2008-09) ITO VS. DARSHAN L. GANDHI NOT SHOWN AN INTEREST OF RS.42,67,550/- BEING RECEI VABLES FROM THE APPELLANT. ON CAREFULLY GOING THROUGH THE ENTIRE FACTS OF THE CASE, I FIND THAT BECAUSE OF THE CASH METHOD OF ACCOUNTING M/S. LOK FINANCIERS COMPANY HAS NOT ACCOUNTED FOR THE INTEREST RECEIVABLE AND N OT ACTUALLY RECEIVED. THE PROVISION OF SECTION 41 (1) OF THE I.T. ACT AS INVO KED BY THE A.O. WILL NOT BE APPLICABLE FOR THE FACT THAT THE AMOUNT OUTSTAND ING AS INTEREST OF RS.42,67,550/- HAS NOT BEEN WRITTEN OFF NOR THE DEB T IS EXTINGUISHED. THE AMOUNT SO OUTSTANDING IS PAYABLE AS ON TODAY AND TH EREFORE IT CANNOT BE REGARDED AS COLOURABLE DEVICE AS STATED BY THE A.O. IN VIEW OF THE SEVERAL JUDICIAL PRONOUNCEMENTS CIT ED BY THE LD. COUNSEL IN THE CASES OF :- (A) ITO VS. AHUJA GRAPHICS MACHINERY PVT. LTD. (200 7) 109 ITD 71 (MUM) (B) CIT VS. T. V. SUNDANRAM IYENGAR & SONS LTD. (19 96) 222 ITR 344 (C) CIT VS. SUGAULI SUGAR WORKS P. LTD. 102 TAXMAN 713 (D) CHIEF CIT VS. KESARIA TEA CO. LTD. (2002) 254 I TR 434 AND MORE PARTICULARLY UNREPORTED JUDGEMENT OF HON'B LE DELHI HIGH COURT IN THE CASE OF DALMIA FINANCE LTD. (APPEAL NO. 833/201 0. DATED 15.07.2010), I HOLD THAT THE PROVISION OF SECTION 41 (1) CANNOT BE INVOKED IN THE PRESENT CIRCUMSTANCES FOR THE REASON THAT THE APPELLANT HAD NEITHER RECEIVED ANY BENEFIT NOR ANY ADVANTAGE AND LIABILITY IN THE FORM OF INTEREST IS OUTSTANDING AND PAYABLE AS ON DATE. THEREFORE, THE ADDITION OF RS.42,67,550/- IS DELETED. HENCE, THIS GROUND OF APPEAL IS ALLOWED. 3. IN THE RESULT. THE APPEAL IS ALLOWED. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE RE VENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORD. A PERUSAL OF THE ABOVE REPRODUCED CONCLUSION OF THE L D. CIT(A) REVEALS THAT THE LD. CIT(A) HAS DELETED THE DISALLOWANCE OBSERVING THAT SINCE T HE LFC (AOP) HAD SWITCHED OVER TO CASH SYSTEM FROM THE MERCANTILE SYSTEM OF ACCOUNTIN G W.E.F. A.Y. 1998-99, THE COMPANY HAD NOT SHOWED THE INTEREST OF RS.42,67,550/- BEING RECEIVABLE FROM THE ASSESSEE BECAUSE OF THE FACT THAT THE SAME WAS NOT ACTUALLY RECEIVED . HE, THEREFORE, HAS HELD THAT THE 5 ITA NO. 3188/MUM/2012 (A.Y. 2008-09) ITO VS. DARSHAN L. GANDHI PROVISION OF SECTION 41(1) OF THE ACT ARE NOT APPLI CABLE AS THE AMOUNT OF INTEREST PAYABLE HAS NOT BEEN WRITTEN OFF NOR THE DEBT HAS EXTINGUIS HED. THE LD. DR, BEFORE US HAS CONTENDED THAT IT WAS NOT A CASE WHERE THE DEBT WAS PAYABLE BY THE ASSESSEE TO A THIRD PARTY. THE SISTE R CONCERN, I.E., THE AOP WAS MANAGED BY THE ASSESSEE ALONG WITH HIS FAMILY MEMBERS. BY D ELIBERATELY CHANGING THE ACCOUNTING METHOD OF LFC (AOP), THE ASSESSEE ON THE ONE HAND, HAD SHOWN THE LIABILITY IN HIS BOOKS OF ACCOUNT AND WHEREAS THE CORRESPONDING INCOME HAD NOT BEEN SHOWN IN THE HANDS OF THE LFC AND THIS PRACTICE WAS CONTINUED FOR SO MANY YEA RS. ON THE OTHER HAND, THE LD. AR HAS SUBMITTED THAT THE LIABILITY OF THE ASSESSEE HAD NO T CESSED TO EXIST. THE ASSESSEE HAD BEEN CONTINUOUSLY SHOWING THE AMOUNT AS PAYABLE IN HIS B OOKS OF ACCOUNT. HE HAS FURTHER CONTENDED THAT MERE LAPSE OF TIME OR DUE TO THE FAC T THAT DUE TO LIMITATION PERIOD OF RECOVER THE AMOUNT THROUGH JUDICIAL INTERVENTION HA S EXPIRED, THAT ITSELF, IS NOT SUFFICIENT TO HOLD THAT THE LIABILITY HAS CEASED TO EXIST. TO STRESS HIS POINT, HE HAS RELIED UPON A CATENA OF JUDGMENTS E.G. CIT VS. JAIN EXPORTS PVT. LTD. [2013] 89 DTR 265 (DEL); CIT VS. KESARIA TEA COMPANY LTD. [2012] 254 ITR 434; CIT VS. MIRA PROCESS P. LTD. [2012] 81 CCT 026 (GUJ), ETC. THE LD. DR ON THE OTHER HAND HA S RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHIP SOFT TECHNOLOGY (P.) LTD. [2012] 26 TAXMANN.COM 109 (DEL). SO FAR THE RELIANCE OF THE LD. AR ON THE CASE LAWS AS NOTED ABOVE IS CONCERNED, WE FIND THAT THE SAME ARE NOT APPLICABLE TO THE CASE O F THE ASSESSEE. IN THOSE CASES, THE ASSESSEE HAD SHOWN THE LIABILITY PAYABLE IN HIS BOO KS OF ACCOUNT AND THE CREDITOR HAD ALSO NOT WRITTEN OFF THE SAID RECEIVABLES. THE PARTIES T O WHOM THE AMOUNT WAS PAYABLE WERE THIRD PARTIES. UNDER SUCH CIRCUMSTANCES, THE VARIOU S HIGHER COURTS HAVE HELD THAT MERELY BECAUSE THE LIMITATION PERIOD TO RECOVER THE AMOUNT THROUGH PROCESS OF COURT HAD LAPSED, THAT ITSELF, DOES NOT MEAN THAT THE LIABILITY HAS C EASED TO EXIST. THE PRINCIPLE LED THAT THE ENFORCEMENT OF DEBT BEING BARRED BY LIMITATION DOES NOT IFSO FACTO LEAD TO THE CONCLUSION THAT THERE IS EXTINGUISHMENT OF DEBT ITSELF. THOUGH ON THE FACE OF IT, THERE SEEMS TO BE A FORCE IN THE CONTENTION OF THE LD. AR, HOWEVER, WHE N WE GO THROUGH THE FACTS OF THE PRESENT CASE, WE FIND THAT SAME ARE DISTINGUISHABLE FROM THE FACTS OF THE CASE LAWS CITED 6 ITA NO. 3188/MUM/2012 (A.Y. 2008-09) ITO VS. DARSHAN L. GANDHI BY THE ASSESSEE. IN THE CASE OF THE ASSESSEE, THE C REDITOR, AOP IS ALSO MANAGED BY THE ASSESSEE AND HIS FAMILY MEMBERS. THE SAID AOP IS NO T A JURISTIC PERSON OTHERWISE, BUT, DIFFERENT ENTITY FOR THE PURPOSE OF INCOME TAX ACT. THE ASSESSEE ON THE ONE HAD HAS BEEN RECEIVING PROFITS OF HIS SHARE FROM THE AOP BUT ON THE OTHER HAND HAS BEEN SHOWING THE LIABILITY OF INTEREST AS PAYABLE TO THE SAID AOP, W ITHOUT ADJUSTMENT/SETTING OFF THE SAME OUT OF THE RECEIVABLES FROM THE SAID AOP. BY CHANGI NG THE METHOD OF ACCOUNTING OF THE AOP, THE EXPENDITURE OF INTEREST CLAIMED BY THE ASS ESSEE IN HIS P & L A/C IS AVOIDED FROM TAXATION AT THE HANDS OF THE AOP AS THE SAME IS NOT SHOWN AS INCOME. THE ARGUMENT THAT THE CHANGE OF METHOD OF ACCOUNTING OF THE SAID AOP HAS BEEN ACCEPTED BY THE REVENUE OVER THE YEARS AND THAT AS PER THE SAID ACCOUNTING SYSTEM, THE AOP WAS NOT REQUIRED TO SHOW THE SAID RECEIVABLE AS INCOME, IN OUR VIEW, IS NOT TENEABLE BECAUSE OF THE FACT THAT THE AOP HAS ALSO BEEN MANAGED BY THE PERSON, WHO IS THE DEBTOR OF THE SAID AOP AND THAT VERY PERSON ON THE ONE HAND IS RECEIVING THE S HARE IN PROFITS OF THE SAID AOP AND ON THE OTHER HAND IS NOT SETTING OFF OR ADJUSTING THE AMOUNT PAYABLE TO THE SAID AOP AND THEREBY AVOIDING THE PAYMENT OF TAX AT THE HANDS OF THE SAID AOP FOR THE YEARS TOGETHER. THE ABOVE CONDUCT SHOWS THAT IT IS A DELIBERATE AND INTENTIONAL ACT TO AVOID TAX. HAD THE ASSESSEE HAD ANY INTENTION TO PAY THE LIABILITY, HE COULD HAVE ADJUSTED THE SAME AGAINST THE SHARE OF PROFITS RECEIVED FROM THE SAID AOP. TH E PECULIAR FACTS OF THE PRESENT CASE SHOW THAT IT WAS NOT A SIMPLE CASE WHERE THE ASSESS EE DUE TO SOME CIRCUMSTANCES COULD NOT PAY THE LIABILITY BUT HAD INTENTION TO PAY THE LIABILITY AND THAT THE DEBT HAD NOT EXTINGUISHED, BUT, IT IS THE CASE WHERE THE ASSESSE E HAD DELIBERATELY MANAGED HIS ACCOUNTS AS WELL AS THE ACCOUNTS OF HIS AOP TO AVOID THE TAX . THE A.O., THEREFORE, IN OUR VIEW, HAS RIGHTLY HELD THAT THE ASSESSEE HAD NO INTENTION TO PAY THE SAID LIABILITY TO THE AOP AND MORE OVER THE SAID AOP HAD ALSO NEVER MADE ANY EFFO RT TO RECOVER THE AMOUNT IN QUESTION FROM THE ASSESSEE. 6. AT THIS STAGE, THE LD. AR HAS VEHEMENTLY CONTEND ED THAT THE ASSESSEE HAS PAID THE LIABILITY IN THE YEAR 2013. HE HAS CONTENDED THAT T HE PAYMENT OF THE LIABILITY IN THE SUBSEQUENT YEAR SHOWS THAT THE ASSESSEE HAD THE INT ENTION TO PAY THE SAME AND WHICH HAS 7 ITA NO. 3188/MUM/2012 (A.Y. 2008-09) ITO VS. DARSHAN L. GANDHI ULTIMATELY BEEN PAID AND AS SUCH IT CANNOT BE SAID THAT THE ASSESSEE HAD NO INTENTION TO PAY OR THAT THE LIABILITY HAD CEASED TO EXIST. WE F IND THAT THE LIABILITY IN THIS CASE IS PERTAINING TO A.Y. 1998-99. THE ASSESSMENT YEAR UND ER CONSIDERATION IS A.Y. 2008-09 IN RESPECT OF WHICH, THE A.O. NOTICED THAT THE ASSESSE E HAD CONTINUOUSLY AVOIDED THE PAYMENT OF TAX BY SHOWING THE SAID INTEREST LIABILI TY AS PAYABLE, WHEREAS THE CREDITOR AOP HAD NOT SHOWN IT AS ITS INCOME BECAUSE OF THE DIFFERENT ACCOUNTING METHODS, THAT TOO, SO MANAGED BY THE ASSESSEE. AFTER THE ADDITION HAS BEEN MADE BY THE A.O., AND THE LITIGATION HAS STARTED, THE ASSESSEE TO AVOID FURTH ER CONSEQUENCES, HAS ALLEGEDLY BEEN PAID THE SAID AMOUNT IN THE YEAR 2013. WE FIND THAT THE APPEAL IN THIS CASE BEFORE US, HAD BEEN FILED ON 08.05.2012 AND THE SAID LIABILITY HAS ALLE GEDLY BEEN PAID EVEN AFTER THE FILING OF THE PRESENT APPEAL BY THE REVENUE. THE PAYMENT OF A LIABILITY IN THE YEAR 2013 BY THE ASSESSEE, IN OUR VIEW, IT IS NOTHING BUT AN AFTERTH OUGHT TO AVOID THE CONSEQUENCE OF ADDITION MADE BY THE A.O. DURING THE ASSESSMENT PRO CEEDINGS FOR THE YEAR CONSIDERATION. IN VIEW OF THIS, WE DO NOT AGREE WITH THE CONTENTIO N OF THE ASSESSEE IN THIS RESPECT. IN VIEW OF OUR OBSERVATION MADE ABOVE, WE HOLD THAT TH E A.O. HAS RIGHTLY MADE THE ADDITION U/S.41(1) OF THE ACT IN THIS CASE AND THE SAME IS C ONFIRMED. THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THAT OF THE A.O. IS RESTORED ON THIS ISSUE. 7. SO FAR AS THE PAYMENT OF AMOUNT IN QUESTION IN 2 013 IS CONCERNED, THE ASSESSEE WILL BE AT LIBERTY TO PUT HIS CASE IN THIS RESPECT IN THE ASSESSMENT YEAR RELEVANT TO THE YEAR OF PAYMENT BEFORE THE A.O. AND THE A.O. WILL CONSID ER THE SAID ISSUE IN ACCORDANCE WITH THE LAW. IN THE RESULT, THE REVENUES APPEAL IS HEREBY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 13, 201 5 SD/- SD/- (B. R. BASKARAN) (SANJAY GARG) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( * MUMBAI; 2 DATED : 13.03.2015 8 ITA NO. 3188/MUM/2012 (A.Y. 2008-09) ITO VS. DARSHAN L. GANDHI ). ../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( 3+ ( ) / THE CIT(A) 4. ( 3+ / CIT - CONCERNED 5. 6) $+ 78 , , 78 0 , ( * / DR, ITAT, MUMBAI 6. 9* / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ( * / ITAT, MUMBAI