Zila Sahkari Bank Ltd., Kanpur V. DCIT-1, Kanpur

ITA 386/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83308 (ITAT-LUCKNOW)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 25-07-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 28-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAKESH GARG SHRI ALOK MITRA D
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.386/LKW/2011 ASSESSMENT YEAR:2003 - 04 ZILA SAHKARI BANK LTD., 30 - D, O BLOCK, KIDWAI NAGAR, KANPUR. PAN:AAAAD2431M VS. DY.C.I.T. - 1, KANPUR. (APPELLANT) (RESPONDENT) ITA NO.410/LKW/2011 ASSESSMENT YEAR:2003 - 04 DY.C.I.T. - 1, KANPUR. VS. ZILA SAHKARI BANK LTD., 30 - D, O BLOCK, KIDWAI NAGAR, KANPUR. PAN:AAAAD2431M (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT(A) - I, KANPUR DATED 26/04/2011 FOR ASSESSMENT YEAR 2003 - 2004. ASSESSEE BY SHRI RAKESH GARG, ADVOCATE REVENUE BY SHRI ALOK MITRA, D.R. DATE OF HEARING 25/07/2014 DATE OF PRONOUNCEMENT 0 5 /09/2014 2 2. FIRST WE TAKE UP THE APPEAL OF THE ASSESSEE I.E. I.T.A. NO.386/LKW/2011 FOR ASSESSMENT YEAR 2003 - 2004. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE CIT(APPEALS) HAS ERRED ON FACTS, AND IN LAW IN CONFIRMING THE ADDITION OF RS.2,14,86,314/ - BEING THE PROVISIONS MADE U/S 36(1)(VIIA) OF THE ACT, WHICH ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS CONTRARY TO FACTS, BAD IN LAW AND BE DELETED. 1.1 BECAUSE THE CIT(APPEALS) HAS RELIED ON THE DECISION OF MANSAROVAR URBAN COOPERATIVE BANK LTD. VS. DCIT 120 TTJ 348(LUCKNOW) WHICH DECISION HAS BEEN DISTINGUISHED BY THE HON'BLE HIGH COURT, LUCKNOW BENCH. HENCE, THE RELIANCE PLACED BY THE CIT(APPEALS) IS MISPLACED. 2. BECAUSE THE CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN TREATING THE OUTSTANDING LIABILITIES AS GRANTS RECEIVED BY THE APPELLANT BANK, WHICH REMAINED TO BE DISTRIBUTED FOR YEARS AS TAXABLE INCOME OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION. 2.1 BECAUSE THE INTERPRETATION LAID DOWN BY THE CIT(APPEALS) REGARDING TAXABILITY OF GRANTS RECEIVED DURING SEVERAL YEARS BY THE APPELLANT BANK, WHICH REMAINED UNDISTRIBUTED, AS TAXABLE INCOME IS CONTRARY TO THE PROVISIONS OF LAW, MISCONCEIVED AND BE DELETED. 2.2 BECAUSE THERE BEING NO REASONING IN THE ORDER OF THE CIT(APPEALS), THE ORDER IS BAD IN LAW. 3. BECAUSE THE CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION OF RS.61,9 03/ - ON ACCOUNT OF ELECTRICITY AND INSURANCE EXPENSES STATING IT TO BE THE EXPENDITURE RELATING TO PRIOR YEARS. 3.1 BECAUSE THE CIT(APPEALS) HAS FAILED TO APPRECIATE THE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE AND 3 SINCE THE LIABILITY I.E. BILLS RELA TING TO THESE EXPENSES I.E. ELECTRICITY AND INSURANCE HAVE BEEN RECEIVED THIS YEAR/CRYSTALLIZED THIS YEAR, THE EXPENDITURE CLAIMED SHOULD OUGHT TO HAVE BEEN ALLOWED. 4. BECAUSE THE ENTIRE ASSESSMENT FRAMED BY THE ASSESSING OFFICER U/S 143(3) AND UPHOLDING BY THE CIT(APPEALS) IS CONTRARY TO THE PROVISIONS OF LAW AND BE QUASHED. 5. BECAUSE THE VERY REFERENCE MADE BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 142(2A) OF THE ACT, AND THE REPORT SUBMITTED BY THE AUDITORS IN PURSUANT TO THE SAID REFE RENCE, BEING WITHOUT JURISDICTION, THE SAME SHOULD OUGHT TO HAVE BEEN IGNORED. 6. BECAUSE THE AUDITOR'S REPORT HAS ITSELF NOT BEEN PREPARED WITHIN THE STIPULATED TIME AS DESIRED BY THE ASSESSING OFFICER, THE REPORT PREPARED U/S.142(2A) OF THE ACT DATED 01 .09.2006 BECOMES WITHOUT JURISDICTION AND AS SUCH, NO CREDENCE OR RELIANCE CAN BE PLACED ON THE SAME. 3. THE ASSESSEE HAS ALSO TWO ADDITIONAL GROUNDS, WHICH ARE AS UNDER: 1. BECAUSE WITHOUT BEING PREJUDICE TO THE GROUND REGARDING ALLOWABILITY OF THE AMOUNT OF RS.2,14,86,314/ - U/S.36(I)(VIIA), THE APPELLANT COOPERATIVE SOCIETY CARRYING ON BUSINESS OF BANKING, ITS INCOME OUGHT TO BE EXEMPT U/S.80P(2)(A)(I) OF THE ACT 1961. 2. BECAUSE THE CLAIM OF THE APPELLANT U/S.80P(2)(A)(I) OF THE ACT HAVING BEING ACCEPTED BY THE ITAT IN THE EARLIER ASSESSMENT YEAR 2002 - 03, THE FACTS BEING THE SAME, THE INCOME COMPUTED FOR THE YEAR UNDER CONSIDERATION BE ALSO EXEMPT FROM TAX. 4. LEARNED A.R. OF THE ASSESSEE BROUGHT OUR ATTENTION TO THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002 - 03 IN I.T.A. 4 NO.417/LKW/06 DATED 21/09/2007 AVAILABLE ON PAGE NO. 4 TO 6 OF THE PAPER BOOK. HE SUBMITTED THAT IN THIS ORDER, THE TRIBUNAL HAS HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P(2) OF THE ACT. HE A LSO SUBMITTED THAT IN THE ORDER , IT IS HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S 36(1)(VIIA) ALSO. AT THIS JUNCTURE , IT WAS POINTED OUT BY THE BENCH WHAT WHILE DECIDING THIS , THE TRIBUNAL HAS CONSIDERED THE PROVISIONS OF SECTION 22 OF THE BANKING REGULATION ACT, 1949 AND THE SAME WERE REPRODUCED ON PARA 6 OF THE ORDER. IT WAS ALSO POINTED OUT THAT THE TRIBUNAL HAS STATED IN THE SAME PARA THAT AS PER THE PROVISO TO SUB SECTION (2) OF SECTION 22 OF BANKING REGULATION ACT, MERELY BECAUSE LICENCE HAS NOT BEEN GRANTED UNDER SUB SECTION (1), IT COULD NOT BE DEEMED TO PROHIBIT THE COMPANY FROM CARRYING ON BANKING BUSINESS UNTIL IT IS GRANTED LIC ENCE. THE TRIBUNAL HAS ALSO NOTED THAT THE ASSESSEE HAS APPLIED FOR LICENCE IN 1966 WHICH IS PENDING. BENCH WANTED TO KNOW THAT SECTION 22(2) IS REGARDING THOSE COMPANIES WHICH ARE IN EXISTENCE ON THE COMMENCEMENT OF BANKING REGULATION ACT, 1949 THEN HOW THE SAME PROVISO IS APPLICABLE TO THE ASSESSEE COMPANY. IT WAS ALSO POINTED OUT THAT AS PER SUB SECTION (2) OF SECTION (22) OF BANKING REGULATION ACT, EVEN THOSE BANKING COMPANIES, WHICH WERE IN EXISTENCE ON THE COMMENCEMENT OF THE ACT, WERE REQUIRED TO APPLY FOR BANKING LICENCE BEFORE EXPIRY OF SIX MONTHS FROM THE DATE OF COMMENCEMENT OF BANKING REGULATION ACT . IT IS ADMITTED FACT THAT THE APPLICATION WAS MADE IN THE YEAR 1966 WHEREAS BANKING REGULATION ACT CAME IN 1949 THEN HOW THE PROVISO IS OF ANY H ELP TO THE ASSESSEE. THE BENCH ALSO POINTED OUT THAT IF THE PROVISION OF THE ACT IS NOT PROPERLY APPLIED BY THE TRIBUNAL THEN SUCH TRIBUNAL DECISION IS NOT A BINDING PRECEDENCE . IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT EVEN IF THE ASSESSEE I S GRANTED DEDUCTION U/S 80P, THE ASSESSEE WILL REMAIN SATISFIED. 5 5. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ALTHOUGH IT WAS HELD BY THE TRIBUNAL IN ITS ORDER DA TED 21/09/2007 FOR ASSESSMENT YEAR 2002 - 03 THAT THE ASSESSEE COMPANY IS ENTITLED FOR DEDUCTION U/S 36(1)(VIIA) OF THE ACT BUT WE FIND THAT WHILE DECIDING SO , THE TRIBUNAL HAS NOT PROPERLY APPLIED THE PROVISIONS OF BANK ING REGULATION ACT, 1949. IF A TRIBUN AL DECISION IS ON THE BASIS OF WRONG UNDERSTANDING OF THE STATUTE THEN SUCH TRIBUNAL DECISION CANNOT BE CONSIDERED AS A BINDING PRECEDENCE . WE FIND THAT AS PER THE PROVISION OF SECTION 22(2) OF THE ACT, A BANK ING COMPANY IN EXISTENCE ON THE COMMENCEMENT O F BANKING REGULATION ACT CAN APPLY WITHIN SIX MONTHS AND IF THE BANKING LICENCE IS NOT GRANTED BY RESERVE BANK OF INDIA, THEN TILL THE APPLICATION FOR BANKING LICENCE IS NOT REJECTED BY RBI, SUCH BANKING COMPANY CAN CONTINUE THE BANKING BUSINESS. IN THE P RESENT CASE, THE APPLICATION FOR BANKING LICENCE WAS MADE BY THE ASSESSEE IN THE YEAR 1966 WHEREAS THE BANKING REGULATION ACT CAME IN EXISTENCE IN THE YEAR 1949 AND, THEREFORE, THE ASSESSEE IS NOT FULFILLING THE REQUIREMENT OF BANKING REGULATION ACT, 1949 BEING MAKING APPLICATION WITHIN SIX MONTHS FROM THE COMMENCEMENT OF THE BANKING REGULATION ACT AND THEREFORE, SECTION 22(2) OF THE BANKING REGULATION ACT, 1949 IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE. THEREFORE, ON THIS ASPECT, WE DO NOT FIND ANY RE ASON TO INTERFERE IN THE ORDER OF CIT(A). 7. REGARDING ELIGIBILITY OF THE ASSESSEE FOR DEDUCTION U/S 80 P OF THE ACT, WE FIND THAT THE ASSESSING OFFICER HAS NOT EXAMINED THIS ASPECT IN THE PRESENT YEAR AND HAS HELD THAT SINCE IN THE PRECEDING YEAR I.E. AS SESSMENT YEAR 2002 - 03 , THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION WAS REJECTED 6 BY CIT(A), THE ASSESSEE IS NOT ELIGIBLE FOR SUCH DEDUCTION IN THE PRESENT YEAR AGAIN. WE FIND THAT IN ASSESSMENT YEAR 2002 - 03, THE TRIBUNAL HAS HELD THAT THE ASSESSEE IS ELI GIBLE FOR DEDUCTION U/S 80P OF THE ACT. HENCE, IN OUR CONSIDERED OPINION, THIS ISSUE SHOULD GO BACK TO THE ASSESSING OFFICER FOR FRESH DECISION IN THE LIGHT OF THE FACTS OF THE PRESENT YEAR AND THE TRIBUNAL DECISION FOR THE PRECEDING YEAR AS WELL AS OTHER AVAILABLE JUDGMENTS ON THIS ISSUE. HENCE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION REGARDING ALLOWABILITY OF DEDUCTION TO THE ASSESSEE U/S 80P . NEEDLESS TO SAY, THE ASSESSING OFFICER SHOULD AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 1 IS REJECTED WHEREAS OTHER ISSUES ARE ALLOWED IN PART FOR STATISTICAL PURPOSES IN RESPECT OF ALLOWABILITY OF DEDUCTION U/S 80P OF THE ACT. 8. REGARDING GROUND NO. 2, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THA T EVEN THE OUTSTANDING LIABILITY IS ALSO LIABILITY AND THEREFORE, THE ADDITION CONFIRMED BY CIT(A) IS NOT JUSTIFIED. 9. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AN ADDITION OF RS.26,76,644/ - WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT THE ASSESSEE HAS AVOIDED FURNISHING OF DETAILS, SUCH AS CORRESPONDENCES MADE IN REGARD TO UNCLAIMED DEPOSITS AND REASON F OR KEEPING IT PENDING FOR MORE THAN THREE YEARS. HE HAS ALSO NOTED THAT ON PERUSAL OF THE DETAILS SUBMITTED BY SPECIAL AUDITOR, IT IS NOTICED THAT SOME OF THESE DEPOSITS PERTAIN TO THE AMOUNT RECEIVED ON ACCOUNT OF VARIOUS GRANTS & SUBSIDIES, WHICH REMAIN ED UNDISTRIBUTED AND KEPT AS A DEPOSIT. THE CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF DEPOSITS 7 BUT HAS CONFIRMED THE ADDITION IN RESPECT OF GRANTS RECEIVED BY THE ASSESSEE WHICH REMAINED TO BE DISTRIBUTED FOR YEARS. SINC E THE GRANTS WERE RECEIVED BY THE ASSESSEE, WHICH WERE NOT DISTRIBUTED FOR YEARS, WE ARE OF THE CONSIDERED OPINION THAT NO INTERFERENCE IS CALLED IN THE ORDER OF CIT(A) IN CONFIRMING THE ADDITION TO THAT EXTENT. ACCORDINGLY, GROUND NO. 2 IS REJECTED. 11. REGARDING GROUND NO. 3, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THESE EXPENSES HAVE BEEN PAID IN ADDITION TO ROUTINE EXPENSES FOR WHICH THE DEMAND WAS RAISED. 12. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT A CLEAR FINDING IS GIVEN BY CIT(A) THAT THE ASSESSEE HAS FAILED TO LEAD ANY EVIDENCE TO DEMONSTRATE THAT THIS LIABILITY (EVEN THOUGH PERTAINING TO THE EARLIER YEARS) HAS CRYSTALLIZED DURING THE PRESENT YEAR. BEFORE US ALSO, NO EVIDENCE COULD BE BROUGHT ON RECORD BY THE ASSESSEE TO DEMONSTRATE THAT THESE LIABILITIES HAD CRYSTALLIZED DURING THE PRESENT YEAR. HENCE, W E DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. GROUND NO. 3 IS REJECTED. 14. REGARDING GROUND NO. 4 TO 6 OF THE APPEAL, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE TIME LIMIT OF ASSESSMENT EXPIRED ON 11/09/2006 BECAUSE TIME WAS EXTENDED UPTO 17/08/2006 FOR FURNISHING THE SPECIAL AUDIT REPORT AND THE DIRECTION WA S PASSED U/S 142(2A) ON 06/03/2006 TO WHICH DATE THERE WAS ONLY 25 DAYS LEFT FOR COMPLETION OF THE ASSESSMENT. HE SUBMITTED THAT UNDER THESE FACTS, THE ASSESSING OFFICER GETS 25 DAYS WHICH EXPIRES ON 11/09/2006 BUT THE ASSESSMENT WAS COMPLETED ON 29/09/20 06 AND THEREFORE, THE ASSESSMENT IS TIME BARRED. REGARDING THE PROVISO TO SECTION 153(4), IT WAS SUBMITTED THAT THIS PERIOD 8 OF 60 DAYS WILL BE AVAILABLE TO THE ASSESSING OFFICER ONLY IF THE ASSESSING OFFICER RECEIVED THE AUDIT REPORT FROM THE SPECIAL AUDI TOR BUT IN THE PRESENT CASE , THE TIME AVAILABLE WITH THE SPECIAL AUDITOR FOR SUBMISSION OF REPORT WAS UPTO 17/08/2006 AND THE AUDIT REPORT U/S 1 4 2(2A) WAS FURNISHED ON 08/09/2006 AND THEREFORE, THIS PERIOD OF 60 DAYS IS NOT AVAILABLE. 15. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER THE FIRST PROVISO TO SECTION 153(4), IF IT IS FOUND THAT AFTER EXCLUSION OF THE TIME AS PRESCRIBED IN VARIOUS SUB SECTIONS (1), (1A), (1B ), (2), (2A) AND (4) FOR MAKING AN ASSESSMENT , TIME LEFT IS LESS THAN 60 DAYS THEN SUCH REMAINING PERIOD SHALL BE EXTENDED TO 60 DAYS. WE ALSO FIND THAT AS PER SUB SECTION (4) OF SECTION 153, THE PERIOD IS COMMENCING FROM THE DATE THE ASSESSING OFFICER DI RECTS THE ASSESSEE TO GET ITS ACCOUNTS AUDITED UNDER SUB SECTION (2A) AND NOT ON THE LAST DATE ON WHICH THE ASSESSEE IS REQUIRED TO FURNISH THE REPORT UNDER THAT SUB SECTION IS TO BE EXCLUDED. THERE IS NO SUCH REQUIREMENT IN SUB SECTION (4) OF SECTION 153 THAT THIS EXCLUSION IS EFFECTIVE ONLY IF AUDIT REPORT IS SO OBTAINED. AS PER THE WORKING OF THE ASSESSEE, HE IS EXCLUDING THE TIME ALLOWED FOR OBTAINING AUDIT REPORT. HENCE, IN OUR CONSIDERED OPINION, THE FIRST PROVISO TO SECTION 153(4) IS APPLICABLE AN D THE ASSESSING OFFICER WILL GET 60 DAYS FROM THE LAST DATE ON WHICH THE ASSESSEE WAS REQUIRED TO FURNISH THE SPECIAL AUDIT REPORT. THIS DATE IS ADMITTEDLY 17/08/2006 AND 60 DAYS FROM THIS DATE EXPIRES IN OCTOBER, 2006 AND ASSESSMENT IS COMPLETED ON 29/09 /2006. UNDER THESE FACTS, IN OUR OPINION, THE ASSESSMENT IS NOT TIME BARRED. THESE GROUNDS ARE REJECTED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9 18. NOW WE TAKE UP THE REVENUES APPEAL I.E. I.T.A. NO .410/LKW/2011 FOR ASSESSMENT YEAR 2003 - 04. IN ITS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - I , KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.26,76,644/ - MADE BY THE A SSESSING OFFICER ON ACCOUNT OF UNCLAIMED DEPOSITS CREDIT BALANCES FOR MORE THAN THREE YEARS BY HOLDING THAT THESE ARE THE LIABILITIES OF THE ASSESSEE WITHOUT APPRECIATING THE FACT BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS . 2. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - I KANPUR DATED 26.04.2011 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 29.09.2006 BE RESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AND/OR TO ADD ANY FRESH GROUNDS AS AND WHEN IT IS REQUIRED TO DO SO. 19. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT RELIEF WAS ALLOWED BY CIT(A) IN RESPECT OF UNCLAIMED DEPOSITS WHICH WERE STILL SHOWN BY THE ASSESSEE AS ITS LIABILITY. THE CIT(A) HAS CONFIRMED THE ADDITION IN RESPECT OF GRANTS AND SUBSIDIES BUT HAS DELETED THE ADDITION IN RESPECT OF UNCLAIMED DEPOSITS. IN OUR CONSIDERED OPINION, AS PER THE PROVISIONS OF SECTION 41(1) ALONG WITH ITS EXPLANATION, IF SUCH LIABILITY IS WRITTEN BACK BY THE ASSESSEE BY WAY OF CREDIT TO THE PROFIT & LOSS ACCOUNT THEN THE SAME HAS TO BE TREATED AS INCOME ON THE BASIS THAT THE LIABILITY HAS CEASED TO EXIST. BUT IN THE PRESENT CASE, IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE LIABILITY CEASED FOR THE REASON THAT THE ASSESSEE HAS TRANSFERRED TO 10 PROFIT & LOSS ACCOUNT. UNDER THESE FACTS, W E DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. 21. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 22. IN THE COMBINED RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 5 /0 9 /2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR