DCIT, CIR-10(2), KOLKATA, Kolkata V. M/s Sonodyne Television Co. Ltd., Kolkata

ITA 330/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1593 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 02-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Keywords: Additional evidence
• Section: 143(3); 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI WASEEM AHMED, AM & HONBLE SH RI S.S.VISWANETHRA RAVI, JM] I.T.A NO. 330/KOL/201 6 ASSESSMENT YEAR :2011-12 DCIT, CIRCLE-10(2), KOLKATA -VS- M/S SONODYNE TELEVISION CO. LTD. [PAN: AAECS 7096 R] (APPELLANT) (RESPONDE NT) FOR THE APPELLANT : SHRI ARINDAM BHATTACHARJ EE, ADDL.CIT FOR THE RESPONDENT : SHRI ANUP SINHA DATE OF HEARING : 01.01.2018 DATE OF PRONOUNCEMENT : 31.01.2018 ORDER PER WASEEM AHMED, AM THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-4, KOLKATA [IN SHORT THE LD CIT(A)] DATED 01.12.2015 AGAINST THE ORDER PASSED BY THE DCIT, CIRCLE-10, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) DATED 25.02.2014 FOR THE ASSESSMENT YEAR 2011-12. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY DELETING THE LIABILITY WRITTEN OFF FOR RS. 59,75,631/-, WHEN THE ASSESSEE HAS FAILED TO BRING ANY EVIDENCE ON RECORD TO PROVE THE GENUINENESS OF THE CREDITORS. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY DELETING THE ADDITION OF RS. 9,20,543/- ON ACCOUNT OF UNDISCLOSED INCOME. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY ADMITTING ADDITIONAL EVIDENCE WITH REGARD TO UNDISCLOSED INTEREST INCOME OF RS. 9,20,543/- AND NOT REFERRING THE SAME TO THE AO FOR REMAND REPORT. 2 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 2 4. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY DELETING THE ADDITION OF RS. 3,66,340/- ON ACCOUNT OF UNDISCLOSED RENTAL INC OME. 5. THAT THE APPELLANT CRAVES TO ADD, DELETE OR MODI FY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. THE FIRST ISSUE RAISED BY THE REVENUE IN THIS A PPEAL IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR RS. 59, 75,631/- ON ACCOUNT OF NON- GENUINENESS OF THE CREDITORS. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN T HE PRESENT CASE IS A LIMITED COMPANY AND INTER ALIA ENGAGED IN THE BUSINESS OF RENTING OF IMMOVABLE PR OPERTIES WHICH ARE USED FOR THE COMMERCIAL PURPOSES. THE INCOME FROM T HE RENTAL OF COMMERCIAL PROPERTIES WAS OFFERED TO TAX UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION. THE ASSESSEE IN THE EARLIER YEARS WAS ALSO ENGAGED IN T HE MANUFACTURING OF TELEVISION BUSINESS WHICH WAS CLOSED DOWN IN THE YEAR 1997. 4. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HA S SHOWN SUNDRY CREDITORS OF RS.69,74,254.20 ONLY AT THE END OF THE FINANCIAL YE AR. OUT OF THESE CREDITORS A SUM OF RS.59,75,631/- WAS REPRESENTING THE SUNDRY CREDITOR S PERTAINING TO THE TELEVISION BUSINESS OF THE ASSESSEE AND THE REMAINING SUNDRY C REDITORS OF RS.9,98,614/- WAS RELATING TO PRESENT BUSINESS I.E. HALDIA PROJECTS. THE ASSESSEE DURING THE ASSESSMENT PROCEEDING FURNISHED A LIST OF 135 PARTIES REPRESEN TING THE CREDITORS OF RS.59,75,631/- PERTAINING TO THE TELEVISION BUSINESS. HOWEVER, THE RE WAS NO ADDRESS IN THE LIST PROVIDED BY ASSESSEE TO THE AO. ACCORDINGLY, THE AO WAS OF T HE VIEW THAT THE TRADING LIABILITY OF SUNDRY CREDITORS HAS CEASED TO EXIST IN THE BOOKS O F THE ASSESSEE AND THEREFORE LIABLE TO BE TAXED U/S 41(1) OF THE ACT. THUS THE AMOUNT OF S UNDRY CREDITORS FOR RS.59,75,631.00 WAS DISALLOWED U/S 41(1) OF THE ACT AND ADDED TO TH E TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LD . CIT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE LIABILITY ON ACCO UNT OF SUNDRY CREDITORS WAS VERY MUCH APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSE SSEE. SUCH LIABILITY OF SUNDRY 3 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 3 CREDITORS WAS CARRIED OVER FROM THE EARLIER YEARS. AS SUCH THE LIABILITY ON ACCOUNT OF SUNDRY CREDITORS WAS NOT WRITTEN OFF IN THE BOOKS O F ACCOUNTS. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: 5.2. I HAVE CONSIDERED THE SUBMISSION OF THE AR OF THE APPELLANT IN THE BACKDROP OF THE ASSESSMENT ORDER. I HAVE ALSO TAKEN NOTE OF THE VAR IOUS JUDICIAL DECISIONS REFERRED TO BY THE AR IN SUPPORT OF HIS STAND. THE SHORT ISSUE AT HAND IS WHETHER THE PROVISIONS OF SECTION 41(1) OF THE ACT WOULD BE ATTRACTED OR NOT IN THE APPELLANTS CASE GIVEN ON ITS FACTS AND CIRCUMSTANCES. IT IS THE CONTENTION OF TH E APPELLANT THAT THE TRADING LIABILITIES WERE NEVER WRITTEN OFF CONTRARY TO THE CONCLUSION D RAWN BY THE AO, WHEREBY, IT WAS OBSERVED THAT THERE WAS CESSATION OF THE SAID LIABI LITY BY THE ASSESSEE AND THEREBY ATTRACTING THE PROVISIONS OF SECTION 41(1) OF THE A CT. UNDER THE PROVISIONS OF SECTION 41(1) OF THE ACT THE LIABILITIES ONCE CEASES AND TH ERE IS REMISSION OF THE LIABILITY CAN IT BE ONLY WRITTEN OFF. THE APPELLANT HAS ALL ALONG HA S MAINTAINED THAT THERE IS NO REMISSION OR CESSATION OF THE LIABILITY AND THAT TH E CREDITORS ARE TRACEABLE AND THERE IS EVERY HOPE FOR RECOVERY OF THE MONIES FROM THEM. IN THAT CASE THE LIABILITY CANNOT BE CONSIDERED TO BE CEASED. THE DECISIONS OF THE HON'B LE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SUGAULI SUGAR WORKS (P) LTD. 236 ITR 518 AS RELIED UPON BY THE APPELLANT IS IMPORTANT AS IN THAT CASE THE PRINCIPLE LAID DOWN IS THAT THE TEST LIMITATION OF LIABILITY CANNOT BE DECIDED BY THE A SSESSEE ITSELF BUT IN THE PRESENCE OF THE CREDITOR. IN THE CASE OF THE APPELLANT THE CREDITOR S HAVE NEVER DISCHARGED THEIR ONUS OR REFUSED TO PAY THE APPELLANTS. FURTHER, THE DECISIO N OF THE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BHOGILAL RAMJIBHAI ATARA (APPEAL NO . 588 OF 2013), AS RELIED UPON BY THE APPELLANT HAS GONE TO THE EXTENT OF HOLDING THA T EVEN IF THE CREDITORS ARE NOT GENUINE THEN SECTION 41(1) SHALL NOT APPLY. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITIONS MADE BY TH E AO U/S 41(1) FOR RS. 59,75,631/- STANDS DELETED. AS A RESULT, THIS GROUND OF APPEAL IS DISPOSED OF AS ALLOWED. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A) THE REVE NUE IS IN SECOND APPEAL BEFORE US. 6. THE LD. DR BEFORE US SUBMITTED THAT THE ADDRESSE S OF THE SUNDRY CREDITORS WERE NOT FURNISHED AT THE TIME ASSESSMENT. THUS, NO VERI FICATION OF THE CREDITORS WAS MADE TO ESTABLISH THE GENUINENESS. THEREFORE, THE ASSESSEE IS NOT LIABLE TO MAKE THE PAYMENT OF SUNDRY CREDITORS. THE LD. DR VEHEMENTLY SUPPORTED T HE ORDER OF AO WHEREAS THE LD. AR FILED THE PAPER BOOK WHICH IS RUNNING FROM PAGES 1 TO 45 AND DREW OUR ATTENTION ON THE PROVISIONS OF SECTION 41(1) OF THE ACT WHICH RE ADS AS UNDER:- 'WHERE AN ALLOWANCE OR DEDUCTION HAS BEEN MADE IN T HE ASSESSMENT FOR ANY YEAR IN RESPECT OF LOSS, EXPENDITURE OR TRADING LIABILITY I NCURRED BY THE ASSESSEE (HEREINAFTER REFERRED TO AS THE FIRST-MENTIONED PERSON) AND SUBS EQUENTLY DURING ANY PREVIOUS YEAR,- 4 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 4 (A) THE FIRST-MENTIONED PERSON HAS OBTAINED, WHETHE R IN CASH OR IN ANY OTHER MANNER WHATSOEVER, ANY AMOUNT IN RESPECT OF SUCH LOSS OR E XPENDITURE OR SOME BENEFIT IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSI ON OR CESSATION THEREOF. THE AMOUNT OBTAINED BY SUCH PERSON OR THE VALUE OF BENEFIT ACC RUING TO HIM SHALL BE DEEMED TO BE PROFITS AND GAINS OF BUSINESS OR PROFESSION AND ACC ORDINGLY CHARGEABLE TO INCOME-TAX AS THE INCOME OF THAT PREVIOUS YEAR, WHETHER THE BUSIN ESS OR PROFESSION IN RESPECT OF WHICH THE ALLOWANCE OR DEDUCTION HAS BEEN MADE IS IN EXIS TENCE IN THAT YEAR OR NOT; OR (B) THE SUCCESSOR IN BUSINESS' .... EXPLANATION 1. - FOR THE PURPOSES OF THIS SUB-SECTI ON, THE EXPRESSION 'LOSS OR EXPENDITURE OR SOME BENEFIT IN RESPECT OF ANY SUCH TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF' SHALL INCLUDE THE REMISSION O R CESSATION OF ANY LIABILITY BY A UNILATERAL ACT BY THE FIRST MENTIONED PERSON UNDER CLAUSE (A) OR THE SUCCESSOR IN BUSINESS UNDER CLAUSE (B) OF THAT SUB-SECTION BY WA Y OF WRITING OFF SUCH LIABILITY IN HIS ACCOUNTS.' ON PERUSAL OF THE AFORESAID SECTION IT COULD BE SEE N THAT THE FOLLOWING TWO CONDITIONS NEED TO BE FULFILLED IN ORDER TO TREAT CESSATION OF LIABILITY AS INCOME UNDER SECTION 41 (1) OF THE ACT IN THE YEAR OF CESSATION OF LIABILITY: A) ASSESSEE HAS TO AVAIL AN ALLOWANCE OR DEDUCTION IN ANY EARLIER YEAR IN RESPECT OF LOSS, EXPENDITURE OR TRADING LIABILITY AND B) IN SUBSEQUENT YEAR THE ASSESSEE HAS OBTAINED CAS H OR ANY OTHER BENEFIT IN RESPECT OF SUCH LOSS, EXPENDITURE AND TRADING LIABI LITY BY WAY OF REMISSION OR CESSATION OF LIABILITY. IN OTHER WORDS, IF AN ASSESSEE INCURRED ANY LOSS, E XPENDITURE OR TRADING LIABILITY IN RESPECT OF ANY YEAR AND SUBSEQUENTLY HAS OBTAINED C ASH OR ANY OTHER BENEFIT IN RESPECT OF SUCH LOSS OR EXPENDITURE OR SOME BENEFIT IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF, THEN, THE AMOUNT OF CASH /BENEFIT SO RECEIVED SHALL BE TREATED AS INCOME IN THE YEAR OF RECEIPT OR CESSATI ON OF LIABILITY. IN INSTANT CASE, THE RESPONDENT HAD CONTINUED THE L IABILITY IN RESPECT OF BALANCE PAYABLE TO CREDITORS IN THE AUDITED ACCOUNTS AND HAD NOT WR ITTEN BACK THE SAME TO THE PROFIT & LOSS ACCOUNTS FOR THE RELEVANT YEAR. HENCE, CONDITI ON (B) ABOVE HAS NOT BEEN FULFILLED IN THIS CASE SINCE THE RESPONDENT HAD NOT RECEIVED DUR ING THE RELEVANT YEAR ANY CASH OR ANY 5 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 5 OTHER BENEFIT IN RESPECT OF LOSS/EXPENDITURE AND TR ADING LIABILITY BY WAY OF REMISSION OR CESSATION OF LIABILITY. HENCE, THE PROVISION OF SEC TION 41(1) OF THE ACT IS NOT APPLICABLE IN THE INSTANT CASE FOR THE RELEVANT YEAR. IN THIS REGARD IT IS PERTINENT TO NOTE THAT THE BAL ANCE OF SUNDRY CREDITORS AS ON 31-03-2011 AND AS ON 31-03-2012 STOOD AT RS. 69,74,245/- AS EV IDENT FROM THE AUDITED FINANCIAL STATEMENT. THUS, THE CLOSING LIABILITIES FOR CREDIT ORS AS ON 31-03-2011 HAVE BEEN CONTINUED TO THE IMMEDIATELY NEXT YEAR AS THE OPENI NG LIABILITIES FOR CREDITORS ON 01-04- 2011. THE SAID FACT WAS ALSO STATED BEFORE THE AO D URING THE COURSE OF ASSESSMENT PROCEEDINGS. BUT THE AO WITHOUT APPRECIATING THE AF ORESAID FACTS HAS ADDED BACK SUNDRY CREDITORS AMOUNTING TO RS. 59,75,631/- UNILATERALLY UNDER THE PROVISIONS OF SECTION 41 (1) OF THE ACT WHICH IS WHOLLY UNJUSTIFIED. THE LD. AR RELIED ON THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER AS WELL AS THE MATERIAL ON RECORD. T HE SOLE BASIS FOR TAXING THE AMOUNT OF RS. 59,75,631/- BY THE ASSESSING OFFICER UNDER S ECTION 41(1) IS THAT THE GENUINENESS OF SUNDRY CREDITORS WAS NOT ESTABLISHED AS THE ASSE SSEE FAILED TO FURNISH THE ADDRESSES OF CREDITORS. BEFORE WE DEAL WITH THE ISSUE INVOLVED H ERE, IT WOULD BE RELEVANT TO QUOTE THE RELEVANT SECTION 41(1), WHICH READS AS UNDER: 'WHERE AN ALLOWANCE OR DEDUCTION HAS BEEN MADE IN T HE ASSESSMENT FOR ANY YEAR IN RESPECT OF LOSS, EXPENDITURE OR TRADING LIABILITY I NCURRED BY THE ASSESSEE (HEREINAFTER REFERRED TO AS THE FIRST-MENTIONED PERSON) AND SUBS EQUENTLY DURING ANY PREVIOUS YEAR,- (A) THE FIRST-MENTIONED PERSON HAS OBTAINED, WHETHE R IN CASH OR IN ANY OTHER MANNER WHATSOEVER, ANY AMOUNT IN RESPECT OF SUCH LOSS OR E XPENDITURE OR SOME BENEFIT IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSI ON OR CESSATION THEREOF. THE AMOUNT OBTAINED BY SUCH PERSON OR THE VALUE OF BENEFIT ACC RUING TO HIM SHALL BE DEEMED TO BE PROFITS AND GAINS OF BUSINESS OR PROFESSION AND ACC ORDINGLY CHARGEABLE TO INCOME-TAX AS THE INCOME OF THAT PREVIOUS YEAR, WHETHER THE BUSIN ESS OR PROFESSION IN RESPECT OF WHICH THE ALLOWANCE OR DEDUCTION HAS BEEN MADE IS IN EXIS TENCE IN THAT YEAR OR NOT; OR (B) THE SUCCESSOR IN BUSINESS' .... EXPLANATION 1. - FOR THE PURPOSES OF THIS SUB-SECTI ON, THE EXPRESSION 'LOSS OR EXPENDITURE OR SOME BENEFIT IN RESPECT OF ANY SUCH TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF' SHALL INCLUDE THE REMISSION O R CESSATION OF ANY LIABILITY BY A UNILATERAL ACT BY THE FIRST MENTIONED PERSON UNDER CLAUSE (A) OR THE SUCCESSOR IN 6 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 6 BUSINESS UNDER CLAUSE (B) OF THAT SUB-SECTION BY WA Y OF WRITING OFF SUCH LIABILITY IN HIS ACCOUNTS.' A PLAIN LOOK AT THE ABOVE STATUTORY PROVISION MAKES IT CLEAR THAT AN AMOUNT TO BE TAXED UNDER THIS SUB-SECTION, IT IS IMPERATIVE THAT ANY A LLOWANCE OR DEDUCTION HAS BEEN MADE IN THE ASSESSMENT FOR ANY YEAR EITHER IN RESPECT OF LOSS OR EXPENDITURE OR SOME BENEFIT IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSI ON OR CESSATION THEREOF, AND IN CASE SUCH BENEFIT IS ARRIVED, THEN VALUE OF BENEFIT ACCR UED TO HIM IS DEEMED TO BE THE PROFITS AND GAINS OF THE BUSINESS OR PROFESSION, WHICH IS C HARGEABLE TO INCOME-TAX AS THE INCOME OF THAT PREVIOUS YEAR, THAT IS, IN THE YEAR IN WHICH BENEFIT SUCH DERIVED BY THE ASSESSEE. EXPLANATION 1 PROVIDES THAT LOSS OR EXPEN DITURE OR SOME BENEFIT IN RESPECT OF ANY SUCH TRADING LIABILITY BY WAY OF REMISSION OR C ESSATION SHALL BE INCLUDIBLE BY A UNILATERAL ACT BY THE FIRST PERSON WHO IS ASSESSEE, I.E., DEBTOR. THERE IS NO STIPULATION OF SUCH UNILATERAL ACT BY THE CREDITOR. HERE IN THE IN STANT CASE, EXPLANATION 1 CANNOT BE HELD TO BE ATTRACTED AT ALL, SINCE THERE WAS NO WRITING- OFF OF THE LIABILITY BY THE ASSESSEE TO PAY TO THE CREDITORS IN THE ASSESSEE'S ACCOUNT. IN THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN TH E CASE OF CIT VS. NITIN. S. GARG REPORTED IN 208 TAXMAN 16 (GUJ), IT WAS HELD THAT A DDITION U/S 41(1) CAN BE MADE ONLY WHEN IT IS FOUND THAT THERE WAS A REMISSION AND/OR CESSATION OF THE LIABILITY. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW:- IT IS NOT BEEN ESTABLISHED THAT THE ASSESSEE HAS WR ITTEN OFF THE OUTSTANDING LIABILITIES IN THE BOOKS OF ACCOUNT. THE APPELLATE TRIBUNAL IS JUS TIFIED IN TAKING THE VIEW THAT AS ASSESSEE HAD CONTINUED TO SHOW THE ADMITTED AMOUNTS AS LIABILITIES IN ITS BALANCE SHEET THE SAME CANNOT BE TREATED AS ASSESSMENT OF LIABILI TIES. MERELY BECAUSE THE LIABILITIES ARE OUTSTANDING FOR LAST MANY YEARS, IT CANNOT BE I NFERRED THAT THE SAID LIABILITIES HAVE SEIZED TO EXIST. THE APPELLATE TRIBUNAL HAS RIGHTLY OBSERVED THAT THE AO SHALL HAVE TO PROVE THAT THE ASSESSEE HAS OBTAINED THE BENEFITS I N RESPECT OF SUCH TRADING LIABILITIES BY WAY OF REMISSION OR CESSATION THEREOF WHICH IS NOT THE CASE BEFORE US. MERELY BECAUSE THE ASSESSEE OBTAINED BENEFIT OF REDUCTION IN THE E ARLIER YEARS AND BALANCE IS CARRIED FORWARD IN THE SUBSEQUENT YEAR, IT WOULD NOT PROVE THAT THE TRADING LIABILITIES OF THE ASSESSEE HAVE BECOME NON EXISTENT. COMMISSIONER O F INCOME-TAX, CALCUTTA VS. SUGAULI SUGAR WORKS (P) LTD REPORTED IN AIR 1999 SC 1144 FOLLOWED 7 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 7 IN THE INSTANT CASE, THERE IS NO AMBIGUITY THAT THE ASSESSEE HAS NOT WRITTEN OFF THE SUNDRY CREDITORS PERTAINING TO THE TELEVISION DIVISION THO UGH THE SAME WAS SHUT DOWN LONG TIME AGO. BUT THE BALANCE OF SUNDRY CREDITORS IS VERY MU CH REFLECTING IN THE BOOKS OF THE ASSESSEE. THESE SUNDRY CREDITORS WERE BROUGHT FORWA RD FROM THE EARLIER YEARS WHICH IMPLY THAT THESE WERE ACCEPTED IN THE EARLIER YEARS . THUS NON-FURNISHING OF ADDRESS OF SUCH SUNDRY CREDITORS CANNOT BE THE REASON FOR INVO KING THE PROVISION OF SECTION 41(1) OF THE ACT. HENCE, THE GROUND OF APPEAL FILED BY THE R EVENUE IS DISMISSED. 8. NEXT ISSUE RAISED BY REVENUE IN GROUND NO. 2 AN D 3 IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR RS. 9,2 0,543/- ON ACCOUNT OF UNDISCLOSED INCOME. 9. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS SHOWN INTEREST INCOME OF RS. 13,54,489/- WHEREAS THE INTEREST INCOME AS DISCLOSE D IN FORM 26AS COMES TO RS. 22,75,032/- ONLY. THUS, A DIFFERENCE OF RS. 9,20,54 3/- WAS OBSERVED BY THE AO AND ACCORDINGLY AN EXPLANATION WAS SOUGHT FROM THE ASSE SSEE ON THE ISSUE. HOWEVER, THE ASSESSEE FAILED TO JUSTIFY THE DIFFERENCE IN THE AM OUNT OF INTEREST INCOME OFFERED IN THE INCOME TAX RETURN VIS--VIS THE INCOME SHOWN IN FOR M 26AS. ACCORDINGLY, THE AO TREATED THE AMOUNT OF RS. 9,20,543.89 AS UNDISCLOSE D INCOME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 10. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO THE LD. CIT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE AMOUNT OF INCOME FOR RS. 9,20,543/- WAS SHOWN IN THE SUBSEQUENT ASSESSMENT YEAR 2012-13. THE ASSESSE E ALSO FILED THE RECONCILIATION STATEMENT IN RESPECT OF THE DIFFERENCE OF INTEREST INCOME AS OBSERVED BY THE AO. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSE SSEE DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: 7.2. I HAVE CONSIDERED THE SUBMISSION OF THE APPEL LANTS AR AND PERUSED THE MATERIALS ON RECORD. THE FACTS AS NARRATED BY THE APPELLANT H AVE BEEN SUPPORTED BY DOCUMENTS AS FILED BEFORE ME. THE EXCESS OF THE INTEREST OF RS. 9,20,937/- AS REFLECTED IN 26AS HAS ALREADY BEEN OFFERED TO TAX IN THE SUBSEQUENT ASSES SMENT YEAR 2012-13 AND THEREFORE 8 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 8 THE AO IS DIRECTED TO DELETE THE ADDITION MADE. AS A RESULT, THIS GROUND OF APPEAL IS ALLOWED. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN SECOND APPEAL BEFORE US. 11. THE LD. DR BEFORE US SUBMITTED THAT THE ADDITIO NAL DOCUMENTS WERE FILED BEFORE THE LD. CIT(A) IN CONTRAVENTION TO THE PROVISION OF THE RULE 46A OF THE INCOME TAX RULES. THUS THE IMPUGNED ISSUE NEEDS TO BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. ON THE OTHER HAND, THE LD. AR SUBMITTED THAT THE RE CONCILIATION STATEMENT WAS FILED BEFORE THE LOWER AUTHORITIES WHICH ARE PLACED AT PA GE 14 OF THE PAPER BOOK. HOWEVER, THE LD. AR FAIRLY CONSIDERED THAT THE RECONCILIATIO N STATEMENT IN RESPECT OF EACH AND EVERY FIXED DEPOSIT WAS NOT FURNISHED BEFORE THE AO AND THE SAME WAS FILED BEFORE THE LD. CIT(A). HOWEVER, THE RECONCILIATION STATEMENT A S FILED BEFORE THE LD. CIT(A) DOES NOT AMOUNT TO ADDITIONAL DOCUMENT AND THEREFORE, TH E SAME IS NOT REQUIRED TO BE SENT BACK TO THE AO FOR FRESH ADJUDICATION. THE LD. AR I N SUPPORT HIS CLAIM AS RELIED ON THE ORDER OF HONBLE ITAT IN THE CASE OF DCIT VS. SWIFT FREIGHT INDIA LIMITED REPORTED IN 58 TAXMANN.COM 105 WHEREIN IT WAS HELD AS UNDER: AS IT IS CLEAR FROM THE RECORD WHICH WAS CONSIDERED BY THE COMMISSIONER (APPEALS) THAT THE SAME IS NOT AN ADDITIONAL EVIDENCE BUT THE BREAKUP OF GROSS RECEIPTS AND VARIOUS EXPENDITURE WERE FURNISHED AFTER TAKING THE SAME FROM THE RECORD ALREADY AVAILABLE BEFORE THE ASSESSING OFFICER. THEREFORE, THERE IS NO MERIT OR SUBSTANCE IN THE OBJECTION RAISED BY THE REVENUE, THAT COMMISSIONER (APPEALS) HAS VIOLATED THE PROVISIONS OF RULE 46A WHILE CONSIDERING THE BREAKU P OF RECEIPTS AND EXPENSES. IT IS PERTINENT TO NOTE THAT WHEN THE GROSS RECEIPTS OF T HE ASSESSEE IS MUCH MORE THAN THE RECEIPTS SHOWN AS PER TDS CERTIFICATE THEN THERE IS NO QUESTION OF SHOWING LESS RECEIPT BY THE ASSESSEE. ACCORDINGLY, IN THE FACTS AND CIRC UMSTANCES OF THE CASE THERE IS NO ERROR OR ILLEGALITY IN THE ORDER OF THE COMMISSIONE R (APPEALS) QUA THIS ISSUE. THE LD. AR RELIED ON THE ORDER OF LD. CIT(A). 12. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIALS ON RECORD; INCLUDING THE J UDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. IN THE INSTANT CASE, THE DIFF ERENCE WAS OBSERVED BY THE AO 9 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 9 BETWEEN THE INTEREST INCOME OFFERED TO TAX AND INCO ME REFLECTED IN FORM 26AS. THE UNDISPUTED FACTS ARE GIVEN HEREUNDER : 1. THE ASSESSEE HAS SHOWN LESS AMOUNT OF INTEREST I NCOME FOR RS. 9,20,443.89 ONLY IN ITS INCOME TAX RETURN. 2. THE AMOUNT OF INTEREST INCOME AS DISCUSSED ABOVE HAS BEEN DULY OFFERED TO TAX IN THE SUBSEQUENT ASSESSMENT YEAR I.E. 2011- 12. 12.1 WE ALSO NOTE THAT A DETAILED RECONCILIATION S TATEMENT WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) ON THE BASIS OF WHICH THE REL IEF WAS GIVEN. BUT THE SAME DOES NOT AMOUNT TO ADDITIONAL EVIDENCE IN VIEW OF THE ORDER OF MUMBAI TRIBUNAL IN THE CASE OF SWIFT FREIGHT INDIA LIMITED (SUPRA) . THUS WE HOLD THAT NO ADDITIONAL DOCUMENT WAS FILED BEFORE THE LD. CIT(A). THE LD. DR HAS NOT BRO UGHT ANYTHING ON RECORD CONTRARY TO THE FINDING OF THE LD. CIT(A). THUS, WE HOLD THAT N O ADDITIONAL DOCUMENT WAS ADMITTED BY THE LD. CIT(A) IN CONTRAVENTION TO THE PROVISION OF THE RULE 46A OF THE INCOME TAX RULES. HENCE, WE RESPECTFULLY FOLLOWING THE CONSIST ENT VIEW OF THE TRIBUNAL DECLINE TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) O N THIS ACCOUNT AND ACCORDINGLY THE GROUND TAKE BY REVENUE IS REGRETTED. 13. THE THIRD ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR RS. 3, 56,340/- ON ACCOUNT OF UNDISCLOSED RENTAL INCOME. 14. THE AO DURING THE ASSESSMENT PROCEEDINGS OBSERV ED THAT TWO PARTIES NAMELY NOKIA INDIA PVT. LTD. AND NOKIA SIEMENS NETWORK PVT . LTD. HAS DEDUCTED THE TAX IN THE NAME OF THE ASSESSEE U/S 194J OF THE ACT FOR RS. 25 ,000/- AND RS.11,634/- RESPECTIVELY. BUT THE CORRESPONDING INCOME OF RS. 2,50,000/- AND RS.1,16,340/- AS SHOWN IN FORM 26AS WAS NOT OFFERED TO TAX BY THE ASSESSEE IN ITS INCOME TAX RETURN. THEREFORE, THE AO TREATED THE SAME AS UNDISCLOSED INCOME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. 10 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 10 15. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE L D. CIT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT IT HAS NOT RECEIVED A NY INCOME AS DISCUSSED ABOVE FROM THE AFORESAID PARTIES DURING THE YEAR. ACCORDINGLY, NO CREDIT OF TDS AMOUNTING TO RS.33,634/- WAS TAKEN BY THE ASSESSEE WHILE FILING ITS INCOME TAX RETURN. THEREFORE, NO ADDITION FOR THE AFORESAID INCOME CAN BE ADDED IN T HE HANDS OF THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- 8.2. I HAVE CONSIDERED THE SUBMISSION OF THE APPEL LANTS AR AND PERUSED THE MATERIALS ON RECORD. THE AFFIDAVIT OF THE APPELLANT HAS BEEN PLACED ON RECORD AND CLEARLY THE APPELLANT DID NOT RECEIVE THE IMPUGNED AMOUNTS AS S TATED BY THE AO. THE AO HAS MADE THE ADDITIONS ON THE BASIS OF FORM 26AS WHEREIN SUC H AMOUNTS WERE REFLECTED AS INCOME ON WHICH TDS WAS DEDUCTED IN FAVOUR OF THE A PPELLANT. THE APPELLANT HAS ALL THROUGHOUT MAINTAINED THAT NO SUCH INCOME OF RS. 3, 36,340/- WAS EVER RECEIVED. THE APPELLANT HAS LET OUT ITS PROPERTIES AT MILLENNIUM I.T. PARK, SALT LAKE, KOLKATA TO A NUMBER OF TENANTS, TWO OF THEM BEING NOKIA INDIA PR IVATE LIMITED (TAN: DELN05529G) AND NOKIA SIEMENS NETWORK PRIVATE LIMIT ED (TAN: DELN08029A). THE AFOREMENTIONED TENANTS HAVE INADVERTENTLY CREDITED TDS AMOUNTING TO RS. 25,000/- AND RS.11,634/- UNDER THE PROVISIONS OF SECTION 194J OF THE ACT CORRESPONDING TO INCOME OF RS.2,50,000/- AND RS. 1,16,340/- RESPECTIVELY WHICH WAS SHOWN IN FORM 26AS FOR THE CAPTIONED ASSESSMENT YEAR. THE APPELLANT NEITHER HA S EVER RECEIVED. THE APPELLANT HAS LET OUT ITS PROPERTIES AT MILLENNIUM I.T. PARK, SAL T LAKE, KOLKATA TO A NUMBER OF TENANTS, TWO OF THEM BEING NOKIA INDIA PRIVATE LIMITED AND N OKIA SIEMENS NETWORK PRIVATE LIMITED. THE AFOREMENTIONED TENANTS HAVE INADVERTEN TLY CREDITED TDS AMOUNTING TO RS. 25,000/- AND RS. 11,634/- RESPECTIVELY WHICH WAS SH OWN IN FORM 26AS FOR THE CAPTIONED ASSESSMENT YEAR. THE APPELLANT NEITHER HA S TAKEN CREDIT OF THE INCOME NOR THE CREDIT OF THE TDS AND IT WAS ONLY A MISTAKE THAT TH E TENANTS HAD DEPOSITED TDS U/S 194J WHICH HAS BEEN CLARIFIED IN THE AFFIDAVIT. ON THE A BOVE FACTS THE AO IS DIRECTED TO DELETE THE ADDITION MADE OF RS. 3,36,340/-. AS A RESULT, T HIS GROUND OF APPEAL IS ALLOWED. THE REVENUE, BEING AGGRIEVED , IS IN APPEAL BEFORE US. 16. BEFORE US THE LD. DR SUBMITTED THAT THE RELIEF HAS BEEN GRANTED BY LD. CIT(A) ON THE BASIS OF AFFIDAVIT FURNISHED BEFORE HIM. HOWEVE R, THE SAID AFFIDAVIT WAS NEVER REFERRED TO THE AO FOR HIS COMMENT. THEREFORE, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION. THE LD. DR R ELIED ON THE ORDER OF THE AO. ON THE OTHER HAND THE LD. AR SUBMITTED THAT TDS ON THE AFORESAID AMOUNT WERE INADVERTENTLY DEDUCED AND DEPOSITED IN THE RESPONDE NTS ACCOUNT AS THE SAME WAS 11 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 11 APPEARING IN FORM NO. 26AS FOR THE RELEVANT YEAR. T HE RESPONDENT AS NEITHER ACTUALLY RECEIVED NOR EARNED ANY SUCH AMOUNT FROM THE TENANT S AS STATED ABOVE DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CON SIDERATION. IN THIS REGARD IT IS HUMBLY SUBMITTED THAT DURING THE RELEVANT YEAR THE RESPONDENT HAD NOT PROVIDED ANY PROFESSIONAL SERVICES TO THE AFORESAID TENANTS AS S UCH, THE QUESTION OF RECEIVING ANY PAYMENT IN LIEU OF PROFESSIONAL SERVICES DOES NOT A RISE. THE RESPONDENT HAD ALSO NOT TAKEN THE TDS CREDIT OF RS.33,634/- IN THE RETURN O F INCOME FOR THE RELEVANT YEAR WHICH WERE INADVERTENTLY CREDITED BY THE AFORESAID TENANT S, AS EVIDENT FROM FORM NO.26AS. HENCE, IT IS HUMBLY SUBMITTED THAT THE AMOUNT OF RS .3,36,340/- SHOULD NOT BE TREATED AS INCOME OF THE RESPONDENT FOR THE RELEVANT YEAR SINC E THE RESPONDENT HAD NOT EARNED THE SAID INCOME DURING THE INSTANT YEAR. IN THIS REGARD , IT IS FURTHER SUBMITTED THAT, THE RESPONDENT HAD FILED AN AFFIDAVIT ( COPY FILED IN PAPER BOOK AT 39 ) DULY NOTARIZED BEFORE THE LD. CIT(A) TO CONFIRM THAT THE AFORESAID AMOUNT WHICH WAS ALLEGED TO HAVE BEEN CONCEALED WAS NOT RECEIVED BY THE RESPONDENT AT ANY TIME DURING THE RELEVANT YEAR OR THEREAFTER. THE SAME CONCLUSIVELY ESTABLISHES THE F ACT THAT THE RESPONDENT HAD NOT RECEIVED THE SAID AMOUNT DURING THE RELEVANT YEAR. HENCE, THE QUESTION OF CONSIDERING THE SAME AS INCOME IS WHOLLY UNJUSTIFIED. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. AT THE OUTSET IT WAS OBSERVED THAT THE ASSESSEE HAS NOT ACCOUNTED FOR THE INCOME OF TDS DEDUCTED BY THE PARTIES AS DISCUSSED ABOVE. AS PER THE ASSESSEE SUCH INCOME WAS NEVER RECEIVED BY IT FROM THE AFORESAID PARTIES. THE LD. AR IN SUPPORT OF HIS CLAIM HAS FILED AFFIDAVIT WHICH IS PLACED AT PAGE 39 OF THE PAPER B OOK. 18. WE NOTE THAT THE ADDRESSES OF BOTH THE PARTIES NAMELY NOKIA INDIA PVT. LTD. AND NOKIA SIEMENS NETWORK PVT. LTD. WERE AVAILABLE BEFO RE THE AO AT THE TIME OF ASSESSMENT BUT THE AO HAS NOT EXERCISED POWER GIVEN U/S 133(6) AND 131 OF THE ACT TO VERIFY WHETHER ANY INCOME HAS ACCRUED TO THE ASSESS EE OR NOT. THE AFFIDAVIT FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A) DOES NOT AMOUNT TO ADDITIONAL EVIDENCE IN VIEW OF THE 12 ITA NO.330/KOL/2016 M/S SONODYNE TELEVISION CO. LTD. A.YR. 2011-12 12 ORDER OF MUMBAI TRIBUNAL IN THE CASE OF SWIFT FREIGHT INDIA LIMITED (SUPRA) . THUS, WE HOLD THAT NO ADDITIONAL DOCUMENT WAS FILED BEFORE T HE LD. CIT(A). THUS, IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFI RMITY IN THE ORDER OF LD. CIT(A). HENCE, THE GROUND OF APPEAL RAISED BY THE REVENUE I S DISMISSED. 19. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31.01.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [WASEEM AHMED ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 31.01.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. DCIT, CIRCLE-10(2), KOLKATA, P-7, CHOWRINGHEE SQ UARE, 3RD FLOOR, KOLKATA-700069. 2. M/S SONODYNE TELEVISION CO. LTD., 138, BLOCK-G, NEW ALIPORE, KOLKATA-700053. 3.C.I.T.- 4. C.I.T.- K OLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE /TRUE COPY/ BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S