M/s.S.N. Spices, Cherthala V. The ITO, Alappuzha

ITA 364/COCH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81429 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 04-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 21-07-2014
• Court: TRIBUNAL
• Department Lawyers: K K JOHN
• Keywords: Unexplained cash credit; Period of limitation; Revised return
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND CHANDRA POOJ ARI, AM I.T.A. NO.364 /COCH/2014 ASSESSMENT YEAR : 2008-09 M/S. S.N. SPICES, S.L. PURAM, CHERTHALA, ALAPPUZHA-688 001. [PAN: ABBFS 3133N] VS. THE INCOME TAX OFFICER, WARD-4, ALLEPPEY. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI R.SREENIVASAN, CA REVENUE BY SHRI K.K. JOHN, SR. DR DATE OF HEARING 04/12/2014 DATE OF PRONOUNCEMENT 12/12/2014 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 20-02-2014 PASSED BY THE CIT(A)-IV, KOCHI, FO R THE ASSESSMENT YEAR 2008-09. 2. THE FIRST ISSUE RAISED IN THIS APPEAL IS WITH RE GARD TO ADDITION ON ACCOUNT OF CASH CREDIT OF RS.1,20,000/- WHICH IS A CASH LOAN. 3. THE BRIEF FACTS OF THE ISSUE ARE THAT IN THE ORI GINAL RETURN OUTSTANDING LIABILITY OF OUTSIDE LOAN INCLUDED IN S UNDRY CREDITORS WAS I.T.A. NO.364/COCH/2014 2 RS.5,52,231/- AND THE ASSESSEE HAS FILED LEDGER AC COUNT COPY OF OUTSIDE LOAN FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS AVAILED LOAN ON VARIOUS DATES AND REPAID DURING THE SUCCEEDING Y EAR IN CASH ON VARIOUS DATES. AS PER THE CONFIRMATION LETTER FURN ISHED BY THE ASSESSEE, THE LOAN WAS RECEIVED FROM SHRI RAJU JOSEPH, BROTHE R OF SHRI BIJU JOSEPH, NRI. THE EXPLANATION GIVEN BY THE ASSESSEE WAS THAT CASH HAS BEEN WITHDRAWN BY SHRI RAJU JOSEPH FROM THE ACCOUNT OF SHRI BIJU JOSEPH AND GIVEN TO SHRI VIJAYAKUMAR, NOW PARTNER O F THE FIRM. THE LOAN HAS BEEN CREDITED IN THE CASH BOOK IN THE RESP ECTIVE DAYS. THE CANARA BANK NRI ACCOUNT COPY OF SHRI BIJU JOSEPH FO R THE PERIOD 01/04/2006 TO 17/11/2009 WAS FILED ALONGWITH THE CO NFIRMATION LETTER. THERE WERE WITHDRAWALS ON THE FOLLOWING DATES. DATE IN BANK A/C DESCRIPTION CHEQUE NO. AMOUNT 22/12/2007 SELF 940425UPLO 2,00,000/- 08/01/2008 BIJU JOSEPH 940427UPLO 7,50,000 29/01/2008 BIJU JOSEPH 940428UPLO 3,75,00/- 13,25,000/- THE AMOUNTS HAS BEEN CREDITED IN CASH IN THE ASSESS EES ACCOUNT IN THE HEAD OUTSIDE LOAN FROM BIJU JOSEPH. THE ASSESSEE HAS RE CEIVED RS.1,20,000/- AS OUTSIDE LOAN IN CASH ON 15/12/2007 BUT THIS AMOUNT WAS NOT SEEN WITHDRAWN FROM THE BANK ACCOUNT AND THE ASSESSEE HAS NOT PROD UCED ANY EVIDENCE OR I.T.A. NO.364/COCH/2014 3 EXPLANATION FOR THIS AMOUNT. THEREFORE RS.1,20,000 /- WAS TREATED AS UNEXPLAINED CASH CREDIT AND ADDITION WAS MADE U/S. 69 OF THE I.T. ACT. 4. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT R S.1,20,000/- HAS BEEN ADDED BACK AS UNEXPLAINED CASH CREDITS STATED TO HA VE BEEN RECEIVED FROM SHRI BIJU JOSEPH, A NRI. THE DATE OF WITHDRAWAL OF THE CASH AND THE DATE OF CREDIT ARE DIFFERENT. AT THE SAME TIME, THE ASSESSEE EXPL AINED THAT THE ASSESSEE HAS ALSO OBTAINED LOAN FROM ONE OF THE PARTNERS WIFE, SUDHA, WHICH HAS NOT BEEN TAKEN INTO CONSIDERATION. 5. HOWEVER, THE CIT(A) OBSERVED THAT THE ASSESSEE H AS NOT SUBMITTED ANY EVIDENCE FOR SUBSTANTIATING ITS CLAIM , AND THE ENTIRE EXPLANATION WAS IN THE FORM OF ARGUMENT. ACCORDING TO THE CIT(A), EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASS ESSEE HAD NOT SUBMITTED ANY STATEMENT OR DOCUMENT AND HAS RELIED UPON THE STATEMENT OF FACTS AND THE GROUNDS OF APPEAL. IN V IEW OF THIS, THE CIT(A) FOUND THAT THE ASSESSEE HAS NOTHING TO COUNT ERACT AGAINST THE DETAILED FINDINGS OF THE ASSESSING OFFICER. ACCORD INGLY, THE CIT(A) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER A ND HE DISMISSED THIS GROUND OF APPEAL. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. I.T.A. NO.364/COCH/2014 4 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. IN THIS CASE, AN AMOUNT OF RS.1,20,000/- WAS RECEIVED FROM SHRI BIJU JOSEPH AND THE ASSESSEE FILED A COPY OF BANK ACCOUNT SHRI BIJU JOSEPH ALONGWITH THE CONFIRMATION LETTER. THE ASSESSING OFFICER DOU BTED THIS LOAN AS THIS AMOUNT WAS RECEIVED IN CASH ON 15-12-2007. ACCORDI NG TO THE ASSESSING OFFICER, THIS AMOUNT WAS NOT REFLECTED IN THE BANK ACCOUNT OF SHRI BIJU JOSEPH. IN OUR OPINION, AS EVIDENCED FRO M THE BANK ACCOUNT OF SHRI BIJU JOSEPH, HE IS HAVING ENOUGH BALANCES IN HIS ACCOUNT AND HE IS HAVING MEANS TO ADVANCE A SUM OF RS.1,20,000/- TO THE ASSESSEE. TH E ASSESSEE HAS PROVED THE IDENTITY OF THE PARTIES AND THE CREDITWO RTHINESS OF SHRI BIJU JOSEPH TO LEND RS.1,20,000/- TO THE ASSESSEE. BEIN G SO, IN OUR OPINION, IT IS NOT PROPER TO MAKE ADDITION U/S. 68 OF THE AC T ON THIS COUNT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DEL ETE THE ADDITION MADE U/S. 68 OF THE I.T. ACT. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS ALLOWED. 7. THE NEXT ISSUE IS WITH REGARD TO ADDITION OF RS. 22,10,051/- WHICH IS CREDITED TO THE CAPITAL ACCOUNT. I.T.A. NO.364/COCH/2014 5 8. THE BRIEF FACTS OF THE CASE ARE THAT A SUM OF RS .50,68,767/- AS ON 31/03/2008 WAS OWED BY THE FIRM TO THE VARIOUS CRED ITORS. HOWEVER A PART OF THIS SUNDRY CREDITORS HAVE BEEN TRANSFERRED TO THE CAPITAL ACCOUNT OF THE PARTNERS TO BOOST THEIR CAPITAL FIGURE. THE OUTSTANDING SUNDRY CREDITORS AS PER THE ORIGINAL RETURN WAS RS.50,68,7 67/- WHICH HAS BEEN SHOWN AT RS.14,20,781/- IN THE REVISED RETURN. THE ASSESSING OFFICER OBSERVED THAT ONCE CERTAIN AMOUNT HAS BEEN CLASSIFI ED AS LIABILITY UNDER THE HEAD SUNDRY CREDITORS, THE SAME IS AN OUTSTAN DING LIABILITY WHICH IS SUPPOSED TO BE PAID TO THE TRADE CREDITORS. HOWEVE R, IT WAS NOTICED BY THE ASSESSING OFFICER THAT BY REVISING THE RETURN, THE ASSESSEE HAS SWAPPED THE SUNDRY CREDITORS WITH THE CREDIT TO THE PARTNERS CAPITAL AS WELL AS TO THE CURRENT ACCOUNT. IT HAS BEEN OBSERV ED BY THE ASSESSING OFFICER THAT IN THE REVISED RETURN OF INCOME, THE A SSESSEE HAS BROUGHT IN ADDITION TO CAPITAL OF RS.12,00,000/- AND ADDITION TO CURRENT ACCOUNT OF PARTNERS, RS.19,41,379/-. THE OUTSTANDING AMOUNTS IN THE SUNDRY CREDITORS AS ON 31-03-2008 WAS RS.50,68,767/- NOT C LAIMED IN THE SUNDRY CREDITORS AND ADVANCE AND DEPOSITS FROM PART NERS AND RELATIVES IN THE REVISED RETURN WAS (5,52,231 + 379096) = RS. 9,31,327/-). THE SOURCE FOR THE CREDIT IN THE CAPITAL WAS EXPLAINED BY THE ASSESSEE AS THE TRANSFER OF OUTSTANDING CREDIT TO PARTNERS CAPITAL ACCOUNT. CREDIT FOR RS.9,31,327/- IS GIVEN TO THE ASSESSEE ON THIS GROU ND. THE BALANCE FIGURE (RS.12,00,000 +RS.19,41,379RS.9,31,327) RS. 22,10,052/- WAS I.T.A. NO.364/COCH/2014 6 TREATED AS UNEXPLAINED CREDIT TO THE CAPITAL ACCOUN T. THEREFORE, RS.22,10,052/- WAS TREATED AS UNEXPLAINED CASH CRED IT AND ADDITION WAS WAS MADE U/S. 68 OF THE I.T. ACT. 9. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE ASS ESSEE ORIGINALLY FILED THE RETURN OF INCOME UNDER ELECTRONIC MODE, S HOWING A BUSINESS LOSS OF RS.14,09,447/- WHICH WAS REVISED SUBSEQUENT LY AND INCOME AND INCOME RETURNED AT RS.73,957/- AFTER CLAIMING THE I NTEREST ON CAPITAL AND REMUNERATION TO PARTNERS. THE BALANCE OF THE ORIGI NAL RETURN SHOWED THE TOTAL AMOUNT OF SUNDRY CREDITORS AT RS.50,68,76 7/- AND IN THE REVISED RETURN, A MAJOR PORTION OF THIS SUNDRY CREDITORS BA LANCE WAS EITHER TRANSFERRED TO THE PARTNERS CAPITAL ACCOUNT OR CUR RENT ACCOUNT AND THUS, THE FIGURE REMAIN REDUCED TO RS.14,20,789/-, I.E., TO SAY AN AMOUNT OF R.36,47,986/- WAS TRANSFERRED TO EITHER CAPITAL ACC OUNT OR CURRENT ACCOUNT IN A ROUND SUM. IT WAS SUBMITTED THAT DURI NG THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER ASKED THE ASSESSE E TO PROVE THE GENUINENESS OF THE SUNDRY CREDITORS AND ACCORDINGLY , THE ENTIRE SUNDRY CREDITORS OF RS.50,68,767/- WAS PROVED EITHER BY WA Y OF FILING OF CONFIRMATION OR BY WAY OF PROVING THE SUBSEQUENT PA YMENT DETAILS IN STATEMENT OF THE ACCOUNT. I.T.A. NO.364/COCH/2014 7 10. HOWEVER, THE CIT(A) FOUND THAT THE ASSESSEE HAS SUBMITTED THE ENTIRE SUNDRY CREDITORS OF RS.50,68,767/- WAS PROVE D BY WAY OF FILING OF CONFIRMATIONS OR BY WAY OF PROVING THE SUBSEQUENT P AYMENT DETAILS IN THE STATEMENT OF ACCOUNT. HOWEVER, THE CIT(A) OBSE RVED THAT THE ASSESSING OFFICER HAS NOT NOTED ANY SUCH CONFIRMATI ONS FILED BY THE ASSESSEE IN THE ASSESSMENT ORDER. ACCORDING TO THE CIT(A), THE ASSESSEE HAS ALSO FAILED TO BRING ANY EVIDENCE OR D OCUMENTS SUPPORTING THEIR CLAIMS DURING THE COURSE OF APPEAL PROCEEDING S. THE ONUS TO EXPLAIN THE NATURE AND SOURCE OF SUCH SUM FOUND CRE DITED TO THE SATISFACTION OF THE ASSESSING OFFICER LIES WITH THE ASSESSEE AND THE ONUS INCLUDES FILING OF CONFIRMATIONS TO ESTABLISH THE I DENTITY OF THE CREDITORS IN RESPECT OF EACH OF SUCH TRANSACTIONS. THE CIT(A) W AS OF THE OPINION THAT IF THE ASSESSING OFFICER RECORDS THAT THE SUND RY CREDITS WERE NOT EXPLAINED, AND CONFIRMATIONS IN RESPECT OF SUCH CRE DITS NOT PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WOU LD BE INFERRED THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS FOR E STABLISHING THE GENUINENESS OF THE CREDITS. MOREOVER, ACCORDING TO THE CIT(A), THE ASSESSEE HAS FAILED TO FILE SUCH CONFIRMATION OR EV IDENCES SUPPORTING THEIR CLAIMS EVEN DURING THE COURSE OF APPEAL. THE CIT(A) OBSERVED THAT NO CONTRARY VIEW CAN BE TAKEN TO THAT OF THE ASSESS ING OFFICES AS THERE ARE NO NEW FACTS TO FORM A DIFFERENT OPINION AND ME RE LOGIC AND ARGUMENT COULD NOT SUFFICE TO SATISFY THE ANSWER TO THE QUESTION OF FACT. I.T.A. NO.364/COCH/2014 8 IN VIEW OF THIS, THE CIT(A) HELD THAT THE ASSESSING OFFICER HAS RIGHTLY CONSIDERED THE AMOUNT OF RS.22,10,052/- AS UNEXPLAI NED CASH CREDITS, AND ADDED TO THE TOTAL INCOME U/S. 68 OF THE I.T. A CT. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 11. THE LD. AR REITERATED THE SUBMISSIONS MADE BEFO RE THE CIT(A). ACCORDING TO THE LD. AR, THE SUNDRY CREDITORS HAVE TRANSFERRED THE CAPITAL TO THE PARTNERS ACCOUNT ONLY TO BOOST UP TH E CAPITAL AND THE LENDERS HAVE NOT WAIVED THE LIABILITY AND THIS IS O NLY UNILATERAL TRANSACTION WHICH DOES NOT WARRANT ANY ADDITION. M OREOVER, THE SECTION 68 CANNOT BE APPLIED TO THE SUNDRY CREDITS WHICH DO ES NOT COME INTO EXISTENCE IN THE ASSESSMENT YEAR UNDER CONSIDERATIO N AND IT IS ONLY CARRY FORWARD BALANCES. 12. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF THE LOWER AUTHORITIES. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. ADMITTEDLY, THE THESE CREDITS CONTINUE TO BE CARRIE D FORWARD YEAR AFTER YEAR AND THE ASSESSEE TRANSFERRED THESE CREDITS TO THE CAPITAL AND CURRENT ACCOUNT IN THE ASSESSMENT YEAR UNDER CONSID ERATION. ON ACCOUNT OF THIS, THERE WAS A DOUBT IN THE MIND OF T HE ASSESSING OFFICER I.T.A. NO.364/COCH/2014 9 REGARDING THESE CREDITS. IN THE NORMAL COURSE, NOB ODY WOULD ORDINARILY NOT CLAIM HIS DUES AND USUALLY THEY TAKE STEPS TO R ECOVER THE DUES IF IT IS A GENUINE LIABILITY. IN THIS CASE, THE LIABILITY R EMAINS TO BE RECOVERED AFTER THE ASSESSEE TRANSFERRED THESE AMOUNTS TO THE CAPITAL AND CURRENT ACCOUNT. FOR INVOKING THE PROVISIONS OF SEC. 68 OF THE I.T. ACT, IF ANY SUM IS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF TH E ASSESSEE MAINTAINED IN THE PREVIOUS YEAR, THEN ONLY IT COULD BE POSSIBLE TO MAKE ADDITION U/S. 68 OF THE I.T. ACT. IN THE CASE OF C ARRY FORWARD CREDIT WHICH IS FROM EARLIER YEAR, PROVISIONS OF SEC. 68 C ANNOT BE APPLIED. HOWEVER, IN THE CASE OF THE ASSESSEE, THE LIABILITY IS OUTSTANDING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. AS PER THE RECENT JUDGMENT OF THE DE LHI HIGH COURT IN THE CASE OF CIT VS. CHIPSOFT TECHNOLOGY (P.) LTD. [2012] 210 TAXMAN 173 (DEL),, THE PROVISIONS OF SEC. 41(1) COULD BE APPLI ED IN THIS TYPE OF CREDTS. 14. THE HONBLE DELHI HIGH COURT AS PER ITS RECENT DECISION IN THE CASE OF CIT VS. CHIPSOFT TECHNOLOGY (P.) LTD. [2012] 210 TAXMAN 173 (DEL), EXAMINING THE LEGAL ASPECT OF THE MATTER, HAS CLARI FIED THAT THE VIEW THAT MERELY BECAUSE A LIABILITY OUTSTANDS IN BOOKS, AND THAT LAPSE OF TIME BARS THE REMEDY BUT DOES NOT EFFACE THE LIABILITY, IS AN ABSTRACT AND THEORETICAL ONE WHICH DOES NOT GROUND ITSELF IN REA LITY. THE INTERPRETATION I.T.A. NO.364/COCH/2014 10 OF LAW, PARTICULARLY FISCAL AND COMMERCIAL LEGISLAT ION, IS TO BE BASED ON PRAGMATIC REALITIES. IT WOULD BE INDEED PARADOXICAL , IF NOT ILLOGICAL, TO ALLOW THE ASSESSEE-DEBTOR TO, WHILE AVOIDING A LIAB ILITY ON THE BASIS THAT IT IS NO LONGER ENFORCEABLE IN LAW, YET CLAIM HIS S TATUS AS A DEBTOR, SO THAT HE WAS INDEED LIABLE FOR THE AMOUNT REFLECTED AS A LIABILITY IN ACCOUNTS. 15. FURTHER, EXPLANATION 1 TO THE PROVISION TO SEC. 41(1) INSERTED BY FINANCE (NO.2) ACT, 1996 W.E.F. 01.04.1997 PROSCRIB ES AN ASSESSEE TO CLAIM AN INDEBTED STATUS WHILE WRITING BACK THE AMO UNT IN BOOKS, EVEN IF UNILATERALLY, IN ITS RESPECT. THE WORD EMPLOYED IN THE SAID EXPLANATION IS INCLUDE AND NOT MEANS, SO THAT IT IS NOT TO BE READ IN A RESTRICTIVE MANNER. THE TRIBUNAL EXPLAINED THE SCOPE OF THE SAI D EXPLANATION IN THE CASE OF KALYANI MAAN SINGH VS. ITO (IN ITA NO. 6500/MUM(A)/2011 DATED 14.11.2013) TO MEAN THAT THE ASSESSEE, EVEN A S ACCOUNTS ARE NOT SACROSANCT, CANNOT ASSUME A STAND CONTRARY TO HIS O WN ACCOUNTS. EXPLANATION 1, ACCORDINGLY, COULD NOT BE INTERPRETED TO CONCLUD E THAT THERE IS OR COULD BE NO REMISSION OR CESSATION OF L IABILITY UNLESS THE SAME IS WRITTEN OFF IN ACCOUNTS. THE ARGUMENT THAT THERE WAS NO PERIOD OF LIMITATION IN RESPECT OF A LIABILITY BEING DISPUTED UNDER THE INDUSTRIAL DISPUTES ACT WAS ALSO REPELLED BY THE HONBLE COURT IN CHIPSOFT TECHNOLOGY (P.) LTD. (SUPRA) ON THE BASIS OF THE DECISION BY THE APEX I.T.A. NO.364/COCH/2014 11 COURT IN THE NEDUNGADI BANK LTD. VS. K. P. MADHAVANKUTTY AIR 2000 SC 839, HOLDING THAT A STALE DISPUTE OUSTS ITSELF FROM BEING ENTERTAINED AND ADJUDICATED. AS WOULD BE SEEN, THE HONBLE COURT HA S SOUGHT TO READ THE PROVISION CONSISTENT WITH THE FACTS OF THE CASE, AN D NOT ON THE BASIS OF A THEORETICAL CONSTRUCT ALONE, DIVORCED FROM THE FACT S OF THE CASE. REFERENCE WAS MADE BOTH BY THE HONBLE COURT AS WEL L AS THE TRIBUNAL IN THE AFORE-REFERRED DECISIONS TO THE DECISION IN THE CASE OF KESORAM INDUSTRIES & COTTON MILLS LTD. VS. CIT [1992] 196 ITR 845 (CAL.) TO THE EFFECT THAT THE NON-DISCHARGE OF A LIABILITY OVER A LONG PERIOD OF TIME, COUPLED WITH ABSENCE OF ANY DISPUTE AND/OR OF LEGAL RECOURSE, WOULD LEAD TO A FIRM BASIS TO INFER REMISSION OR CESSATIO N OF LIABILITY. THE SAID DECISION BY THE HONBLE COURT STANDS FOLLOWED AND A DOPTED BY THE TRIBUNAL, AS IN ITO VS. SHAILESH D. SHAH (IN AND YUSUF R. TANWAR VS. ITO (IN I.T. ACT NO.8408/MUM/2010 DATED 28.02.2013). AC CORDINGLY, AN OMISSION TO PAY COULD GIVE RISE TO THE LEGAL INFERE NCE OF CESSATION OF LIABILITY. TRUE, AN AMOUNT MAY CONTINUE TO OUTSTAND IN ACCOUNTS, SO THAT THE ASSESSEE IS PRIMA FACIE LIABLE IN ITS RESPECT. HOWEVER, IT IS THE VERACITY OR THE TRUTH OF THOSE VERY ACCOUNTS, CONST ITUTING THE ASSESSEES EVIDENCE, THAT THE ASSESSEE IS REQUIRED TO ESTABLIS H. THE MATTER WOULD, THEREFORE, HAVE TO BE DECIDED IN LIGHT OF THE CONSP ECTUS OF THE FACTS OF EACH CASE . I.T.A. NO.364/COCH/2014 12 AS PER THE RECENT JUDGMENT OF THE DELHI HIGH COURT , CITED SUPRA, THE PROVISIONS OF SEC. 41(1) COULD BE APPLIED RATHE R THAN SEC. 68 OF THE I.T. ACT. SECTION 68 OF THE ACT IS NOT APPLICABLE TO THE CASH CREDITS RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IN THE EARLIER PREVIOUS YEAR NOT RELEVANT TO THE ASSESSMENT YEAR UNDER CONS IDERATION. WHEN THE CASH CREDITS PERTAIN TO THE EARLIER PREVIOUS YEAR, NO ADDITION CAN BE MADE U/S. 68 OF THE I.T. ACT IN THIS ASSESSMENT YEA R. IN THIS BACKGROUND, THE APPLICABILITY OF SEC. 41(1) IS TO B E CONSIDERED. THE TRIBUNAL, BEING FINAL FACT FINDING AUTHORITY, AND A LL THE NECESSARY MATERIAL WAS NOT BROUGHT ON RECORD BY EITHER PARTY, IN OUR O PINION, IT IS APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO FIND OUT WHETHER THE LIABILITY ACTUALLY CEASED TO E XIST AND IF THERE IS NO POSSIBILITY OF REVIVAL OF THE LIABILITY, THEN ONLY THE ASSESSING OFFICER HAS TO APPLY THE PROVISIONS OF SEC. 41(1) OF THE I.T. ACT. WITH THIS OBSERVATION, WE ARE INCLINED TO REMIT THIS ISSUE BACK TO THE FIL E OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. I.T.A. NO.364/COCH/2014 13 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12-12-2014 SD/- SD/- (N.R.S.GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 12TH DECEMBER, 2014 GJ COPY TO: 1. M/S. S.N. SPICES, S.L. PURAM, CHERTHALA, ALAPPUZ HA-688 001. 2. THE INCOME TAX OFFICER, WARD-4, ALLEPPEY. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN