WILLIAM JACKS & COMPANY (I) LTD, MUMBAI V. ITO WD 2(3)(4), MUMBAI

ITA 3985/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92514 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 23-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 07-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 3985/M/2012 ASSESSMENT YEAR: 2007 - 08 M/S. WILLIAM JACKS & COMPANY (I) LTD., GROUND FLOOR, PREM SA GAR BUILDING, 7 - 7 - B, NESBIT ROAD, MAZGAON, MUMBAI 400 010 PAN: AAACW0049G VS. INCOME TAX OFFICER, ITO WARD 2(3)(4) , MUMBAI 20 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : S HRI K. GOPA L , A.R. REVENUE BY : SHRI VIJAY KUMAR BORA , D.R. DATE OF HEARING : 30 .04. 201 5 DATE OF PRONOUNCEMENT : 08.05.2015 O R D E R PER VIJAY PAL RAO , JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16 .0 3 .201 2 OF CIT( A) FOR THE ASSESSMENT YEAR 2007 - 08 . THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS APPEAL, HOWEVER, THE ONLY ISSUE ARISES FOR OUR RECONSIDERATION AND ADJUDICATION IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN UP HOLD ING THE ADDITION TO THE EXTENT OF RS.8, 0 9 , 676/ - OUT OF THE TOTAL ADDITION OF RS.11,23,166/ - MADE BY THE ASSESSING OFFICER UNDER SECTION 41(1) OF THE INCOME TAX ACT. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE HAS SHOWN A SUM OF RS.26,74,839 / - UNDER THE HEAD SUNDRY CREDITORS. ITA NO.3985/M/2012 M/S. WILLIAM JACKS & COMPANY (I) LTD. 2 THE AO ASKED THE ASSESSEE TO FURNISH THE PARTY - W ISE DETAILS OF THIS AMOUNT AND CONFIRMATION THERETO. AFTER CONSIDERING THE REPLY OF THE ASSESSEE THE AO NOTED THAT A SUM OF RS.16,47,872/ - CONTINU OUS TO REMAIN PAYABLE AS ON THE DATE AND OUT OF THIS AMOUNT EXCLUDING A SUM OF RS. 5,24,706/ - THE BALANCE AMOUNT OF RS.11,23,166/ - IS NOT PAYABLE. ACCORDINGLY, THE AO MADE AN ADDITION OF RS.11,23,166/ - UNDER SECTION 41(1). 3. ON APPEAL, THE ASSESSEE HAS CONTENDED THAT WHEN THE ASSESSEE HAS NOT WRITTEN BACK THESE AMOUNTS AND SHOWN AS PAYABLE LIABILITIES THEN THE SAME IS NOT TAXABLE UNDER SECTION 41(1). THE ASSESSEE ALSO EXPLAINED THAT OUT OF THIS AMOUNT OF RS.11,23,166/ - SOME OF THE AMOUNT IS REGARDING C APITAL EXPENDITURE WHICH CANNOT BE TAXED UNDER SECTION 41(1) . THE LD. CIT(A) HAS GIVEN THE PART RELIEF TO THE ASSESSEE BY DELETING THE ADDITION OF RS.1,13,790/ - AND THEREBY CONFIRMED THE ADDITION OF BALANCE AMOUNT OF RS.8 ,0 9,676/ - . 4. B EFORE US, THE LD . A.R. OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS FILED THE DETAILS BEFORE THE AO AS WELL AS THE LD. CIT(A) AND EXPLAINED THAT ALL THESE AMOUNTS WERE PAYABLE LIABILITY OF THE ASSESSEE. HE HAS FURTHER CONTENDED THAT SOME OF THE AMOUNT HAS ALREADY BEEN REPAID BY THE ASSESSEE IN THE SUBSEQUENT YEAR, THEREFORE NO ADDITION CAN BE MADE UNDER SECTION 41(1) UNTIL AND UNLESS THE ASSESSEE ITSELF TAKES A DECISION THAT THE AMOUNTS ARE NO LONGER A PAYABLE LIABILITY . ON THE OTHER HAND, THE LD. D.R. HAS RELI ED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, WE FIND THAT THE AO AS WELL AS THE LD. CIT(A) HAS DECIDED THIS ISSUE OF ADDITION UNDER SECTION 41(1) WITHOUT DISCUSSING THE F ACTS, THEREFORE THE FACTS ITA NO.3985/M/2012 M/S. WILLIAM JACKS & COMPANY (I) LTD. 3 EXPLAINED BY THE ASSESSEE ARE NOT PROPERLY VERIFIED BY THE AUTHORITIES BELOW. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE AO TO VERIFY THE A CTUAL PAYMENT MADE BY THE ASSESSEE IN THE SUBSEQUENT YEARS AND THEN DECIDE THE ISSUE AFRESH AS PER LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08. 05 . 201 5 . SD/ - SD/ - ( R.C. SHARMA ) ( VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 08. 05 .2015 . * KISHORE , SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.