ITO-21(2)(3), MUMBAI V. SHRI MOHAMED ANWAR M SHETHWALA, MUMBAI

ITA 4201/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3129 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 15-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CIRCUMSTANCES OF CASE
• Keywords: Bogus purchase
• Section: 142(1); 133(6); 143(1); 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 4201 /MUM/201 8 ( / ASSESSMENT YEAR: 20 1 2 - 13 ) ITO 21(2)(3) ROOM NO.105, 1 ST FLOOR PIRA MAL CHAMBERS, PAREL, MUMBAI - 4000 12. / VS. SHRI MOHAMED ANWAR M. SHETHWALA 75 - 77E SHIRIN MANSION COMPOUND, LJ MARG, NEAR PARADISE CINEMA, MAHIM, MUMBAI - 16. ./ ./ PAN/GIR NO. : AAGPS3262A ( / APPEL LANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 11 / 11 / 201 9 / DATE OF PRONOUNCEMENT : 27 /11 / 201 9 / O R D E R PER AMARJIT SINGH, J M: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 26 . 0 3 .201 8 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 32 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y . 20 1 2 - 1 3 . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - ' 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) IS JUSTIFIED IN CONFIRMING THE ADDITION OF 10% OF THE AMOUNT OF SUNDRY CREDITORS OF RS. 4,51,18,981 / - AS ON REVENUE BY : SHRI DROP SINGH MEENA (SR. AR) ASSESSEE BY: SHRI BHUPENDRA SHAH ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 2 31.3.2012 AND DELETING THE BALANCE 40% WITHOUT APPRECIATING THE ACTION OF THE ASSESSING OFFICER IN THIS REGARD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE INITIAL BURDEN L IES ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES AS HELD BY THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF INDIAN WOOLLEN CARPET FACTORY. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN NOT APPRECI ATING THE FACT THAT THE SUNDRY CREDITORS WHO COULD NOT BE VERIFIED BY THE ASSESSING OFFICER, EVEN AFTER THE ISSUE OF NOTICES U/S 133(6) OF THE ACT ( AS THESE NOTICES WERE EITHER UNSERVED OR NOT REPLIED TO OR WHERE THESE PARTIES WERE NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER) WERE CORRECTLY DISALLOWED BY THE ASSESSING OFFICER AND ADDED BACK AS ASSESSEE'S INCOME U/S 41(1) OF THE INCOME TAX ACT, 1961. 4. 'THE APPELLANT PRAYS THAT THE ORDER OF THE LD CIT(A) ON THE ABOVE GROUNDS BE SET A SIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED'. 5. 'THE APPELLANT CRAVES LEAVE TO AMEND OR TO ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY' 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 26 .09.20 12 DECLARING TOTAL INCO ME TO THE TUNE OF RS.5,57,920 / - FOR THE A.Y.2012 - 13 . THE RETURN WAS PROCESSED U/S 143(1) OF THE I. T. ACT, 1961. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF METAL AND FURNITURE FABRICATION AND CIVIL WORK CONTRACTS UNDER THE NAME AND STYLE OF PROPRIETARY CONCERN M/S. METALLAIRE. ON APPRAISAL OF THE DETAILS FILED, IT WAS OBSERVED THAT THE SUN DRY CREDITORS OUTSTANDING AS ON 31.03.2012 WAS OF RS. 4,48,65,975/ - . THE CORRESPONDING PERIOD, THE SUNDRY DEBTORS WAS RS.1,23,08,835/ - . THERE WAS WIDE GAP BETWEEN THE OUTSTANDING AMOUNT OF ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 3 SUNDRY DEBTORS AND CREDITORS IN THE ACCOUNT AS ON 31.03.2012. IN ORD ER TO VERIFY THE CLAIM, THE NOTICES WERE ISSUED TO THE SUNDRY CREDITORS U/S 133(6) OF THE ACT. THE NOTICES WERE ISSUED TO THE FOLLOWING PARTIES: - S. NO. NAME OF THE PARTY AMOUNT OF CREDIT AS PER BOOK (RS.) STATUS OF NOTICE U/S 133(6) DIFFERENCE IN ASSESSE ES BOOKS SHOWN AS EXCESS 1 AMBIKA ENTERPRISES 5,62,825 NOTICE RETURNED 5,62,825 2 AMI TRADERS 1,71,30,378 NOTICE RETURNED 1,71,30,378 3 ASMA ENGINEERING WORK 87,756 REPLY RECEIVED 6,380 4 AUGYESHA SALES 18,05,198 NOTICE RETURNED 18,05,198 5 CONCEPTS 24,59,777 NO REPLY RECEIVED 24,59,777 6 DONNIES TRADING PVT. LTD. 10,01,094 NOTICE RETURNED 10,01,094 7 INNOVATIVE ENGINEERS 4,69,687 REPLY RECEIVED 0, 8 JAI MALHAR ENTERPRISES 4,80,000 NOTICE RETURNED 4,80,000 9 KOTSONS IMPEX PVT. LTD. 84,18,916 NOTIC E RETURNED 84,18,916 10 MAHASATI MARBLES 1,53,000 NO REPLY RECEIVED 1,53,000 11 MAHAVIR SALES CORPORATION ,23,19,910 NO REPLY RECEIVED ,23,19,910 12 MANJU ENTERPRISES 10,65,654 NOTICE RETURNED 10,65,654 13 METRO ISPAT PVT. LTD. 2,72,887 PARTLY STATED T HAT NO TRANSACTION MADE WITH ASSESSEE 2,72,887 14 MIDAS METALS 1,06,913 REPLY RECEIVED 62,696 15 MOKSHA IMPEX 7,01,324 NOTICE RETURNED 7,01,324 16 NEW INDIA SECURITY SERVICES 2,67,000 REPLY RECEIVED 2,24,486 17 NOOR CREATION 6,15,172 NO REPLY 6,15,172 ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 4 RECEIVED 18 PARTH STEEL & ENGINEERING CO. 62,480 NOTICE RETURNED 62,480 19 PERFECT METAL FOUND 3,07,154 NO TRANSACTION MADE WITH ASSESSEE 3,07,154 20 PRAKASH METAL WORKS 2,98,361 PARTLY STATED THAT NO TRANSACTION MADE WITH ASSESSEE 2,98,361 21 REMI STE EL (INDIA) 1,36,082 NOTICE RETURNED 1,36,082 22 RISHAB SALES CORPORATION 2,67,298 NO REPLY RECEIVED 2,67,298 23 SHASHWAT METAL CRAFT 92,411 NOTICE RETURNED 92,411 24 S.M. INDUSTRIES 10,84,760 NOTICE RETURNED 10,84,760 25 TEAM TRADING EST. 81,478 NOTICE RETURNED 2,844 26 TISHA ENTERPRISES 47,50,926 NO REPLY RECEIVED 47,50926 27 WORLDWIDE ENTERPRISES 1,20,540 NO REPLY RECEIVED 1,20,540 TOTAL 4,51,18,981 4. THE NOTICES WERE NOT SERVED TO MOST OF THE PARTIES HOWEVER SOME OF THE PARTIES CHANGED THEIR ADDRESS. NOTICE SERVED TO PARTIES WHO CLAIM THAT THEY DID NOT DO BUSINESS WITH THE ASSESSEE. IN MAJORITY OF THE CASES NEGATIVE REPLY WAS RECEIVED . T HE ASSESSEE WAS ASKED TO PRODUCE THE PARTIES PERSONALLY WITH LEDGER ACCOUNT, BANK STATEMENTS , RESIDENCE ADDR ESS TO PROVE GENUINEN ESS OF THE CLAIM. THE ASSESSEE FAILED TO PRODUCE THE PARTIES. NO ONE RESPONSE TO THE NOTICE U/S 133(6) OF THE ACT. THEREAFTER, FURTHER NOTICE WAS GIVEN FOR THE REJECTION OF THE BOOKS OF ACCOUNT U/S 1 45(3) OF THE ACT. IN RESPONSE TO THE NOTICE, THE ASSESSEE PRODUCE THE COPY OF INVOICES ISSUED AGAINST THE PURCHASES OF RS.4,69,687/ - DURING FINANCIAL YEAR 20010 - 11 BY ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 5 ONE PARTY NAMELY M/S. INNOVATIVE ENGINEERS. ON VERIFICATION, IT WAS FOUND THAT THE SOME OF THE CREDITORS WERE OUTSTANDING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE SINCE F.Y. 2006 - 07 ONWARDS. IN CONNECTION WITH THE SUNDRY CREDITORS NAMELY M/S. AMBIKA ENTERPRISES, THE LIABILITY WAS EXISTING W.E.F. F.Y. 2007 - 08 OF RS.8,60,819/ - . DURING THE F.Y. 20 11 - 12 , THE LIABILITY WAS RS.5,62,82 5/ - . IN THE CASE OF MANJU ENTERPRISES, THE CREDIT LIABILITY WAS EXISTING SINCE F.Y. 2006 - 07 OF RS.17,51,705/ - . THE EXISTING LIABILITY FOR THE A.Y. 2011 - 12 WAS RS.10,65,654/ - . THERE ARE SEVERAL OTHER CREDITORS STILL EXISTS IN THE BOOKS OF THE ASSESSEE. OUT OF THE TOTAL CREDITORS OF RS.4,51,18,981/ - FOR THE A.Y.2011 - 12 CONFIRMATION FROM THE CREDITORS HA S BEEN RECEIVED TO THE EXTENT OF RS.5,16,785/ - OUT OF THE CREDITORS FOR THE F.Y.2010 - 11 OF RS.2,77,51,872/ - CONFIRMATION HAS BEEN RECEIVED TO THE EXTENT OF RS. 5,73,573/ - . IN THE REMAINING CASES, THE PARTY DENIED OR REPLY WAS NOT FILED WHICH HAS BEEN SHOWN IN THE CHART: - NAME OF THE PARTY AMOUNT OF CREDIT AS PER BOOK (RS.) STATUS OF NOTICE U/S 133(6) F.Y 10 - 11 F.Y.09 - 10 F.Y.08 - 09 F.Y.07 - 08 F.Y 06 - 07 DIFFERENC E I N ASSESSEE S BOOKS SHOWN AS EXCESS AMBIKA ENTERPRISE S 5,62,825 NOTICE RETURNED 562825 56282 5 73432 5 86081 9 NILL 5,62,825 AMI TRADERS 1,71,30,3 78 NOTICE RETURNED 1,71,30,3 78 ASMA ENGINEERI NG WORK 87,756 REPLY RECEIVED 6,380 AUGYESHA SALES 18,0 5,198 NOTICE RETURNED 180519 8 18,05,198 CONCEPTS 24,59,777 NO REPLY 245977 19229 24,59,777 ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 6 RECEIVED 7 13 DONNIES TRADING PVT. LTD. 10,01,094 NOTICE RETURNED 10,01,094 INNOVATIV E ENGINEERS 4,69,687 REPLY RECEIVED 0, JAI MALHAR ENTERPRISE S 4,80,000 NOTICE RETURNED 4,80,000 KOTSONS IMPEX PVT. LTD. 84,18,916 NOTICE RETURNED 84,18,916 MAHASATI MARBLES 1,53,000 NO REPLY RECEIVED 1,53,000 MAHAVIR SALES CORPORATI ON ,23,19,91 0 NO REPLY RECEIVED ,23,19,91 0 MANJU ENTERPRISE S 10,65,654 NOTICE RETURNED 106565 4 10656 54 11426 54 11433 83 17517 05 10,65,654 METRO ISPAT PVT. LTD. 2,72,887 PARTLY STATED THAT NO TRANSACTI ON MADE WITH ASSESSEE 106565 4 2,72,887 MIDAS METALS 1,06,913 REPLY RECEIVED 49127 62,696 MOKSHA IMPEX 7,01, 324 NOTICE RETURNED 701324 7,01,324 NEW INDIA SECURITY SERVICES 2,67,000 REPLY RECEIVED 53000 2,24,486 NOOR 6,15,172 NO REPLY 615172 61517 84717 84717 84717 6,15,172 ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 7 CREATION RECEIVED 2 2 2 2 PARTH STEEL & ENGINEERI NG CO. 62,480 NOTICE RETURNED 62,480 PERFECT METAL FOUND 3,07,154 NO TRANSACTI ON MADE WITH ASSESSEE 307154 3,07,154 PRAKASH METAL WORKS 2,98,361 PARTLY STATED THAT NO TRANSACTI ON MADE WITH ASSESSEE 297923 29668 9 2,98,361 REMI STEEL (INDIA) 1,36,082 NOTICE RETURNED 1,36, 082 RISHAB SALES CORPORATI ON 2,67,298 NO REPLY RECEIVED 267298 26729 8 2,67,298 SHASHWAT METAL CRAFT 92,411 NOTICE RETURNED 92411 92,411 S.M. INDUSTRIES 10,84,760 NOTICE RETURNED 108476 0 10,84,760 TEAM TRADING EST. 81,478 NOTICE RETURNED 1759 1685 1685 2,844 TISHA ENTERPRISE S 47,50,926 NO REPLY RECEIVED 475092 6 47,50926 WORLDWID E ENTERPRISE S 1,20,540 NO REPLY RECEIVED 1,20,540 TOTAL 4,51,18,9 81 285446 39 ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 8 REPLY RECEIVED 516785 573573 1685 1685 0 0 NET 44602196 279710 66 47305 51 30546 21 28513 74 17575 67 44399709 5. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE MADE THE PURCHASE OF RS.2,74,31,852/ - AND OPENING STOCK WAS OF RS.2,27,02,139/ - . THE NOTICE U/S 133(6) OF THE ACT WAS ISSUED TO THE PURCHASERS TO VERIFY THE TRA NSACTIONS. ONE OF THE SELLER M/S. AMBIKA ENTERPRISES DENIED THE TRANSACTIONS. NOTICE U/S 133(6) OF THE ACT WAS ALSO IS SUED TO M/S. UJJWAL SALES CORPN, SAI ENTERPRISES, COMET CORPORATION, ZENIT ENTERPRISES, AMI TRADERS AND KAISON SOLUTION WHICH WERE RETURNE D BACK WITH THE ADDRESS LEFT AN D OR NOT KNOWN , THEREFORE, THE PURCHASE COULD NOT BE VERIFIED . THEREFORE, IN THE SAID CIRCUMSTANCES, 50% OF THE SUNDRY CREDITORS TO THE TUNE OF RS. 2,25,59,490/ - WERE TREATED AS BOGUS PURCHASE . THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSE D TO THE TUNE OF RS.2,31,17,410 / - . F EELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE, THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO S . 1 TO 3 6 . ALL THE ISSUES ARE I NTER - CONNECTED, THEREFORE, ARE BEING TAKEN UP TOGETHER FOR ADJUDICATION. IN FACT IN ALL THE ISSUES , THE REVENUE HAS CHALLENGED THE ALLOWANCE OF DISALLOWANCE OF 40% OF THE SUNDRY CREDITORS IN SUM OF RS.4,51,18,981/ - . THE LD. REPRESENTATIVE OF THE REVENUE HA S ARGUED THAT THE CIT(A) HAS WRONGLY ALLOWED THE CLAIM OF THE ASSESSEE SPECIFICALLY IN THE CIRCUMSTANCES, WHEN THE ASSESSEE HAS FAILED TO PROVE THE CLAIM OF THE SUNDRY CREDITORS IN THE RELEVANT FINANCIAL YEAR. HOWEVER, ON THE OTHER HAND, ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 9 THE LD. REPRESENTA TIVE OF THE ASSESSEE HAS STRONGLY RELIED UPON THE ORDER PASSED BY THE CIT(A) IN QUESTION. BEFORE GOING FURTHER, WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD: - 5. I HAVE GIVEN MY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 5.1 GROUND NO. 1 - ADDITION OF RS.2,25,59,490/ - BEING 50% OF THE SUNDRY CREDITORS. IN THIS GROUND, THE APPELLANT HAS CHALLENGED THE ADDITION MADE BY THE AO OF RS 2,25.59,490/ - , BEING 50% OF THE SUNDRY CREDITORS AS ON 31/03/2012. TREATING THE SAME AS BOGUS PURCHASE. AT THIS STAGE. IT IS IMPORTANT TO EXAMINE THE PROVISIONS OF SECTION 41(1) OF THE ACT. A PLAIN READING OF THE AFORESAID PROVISIONS W OULD MAKE IT CLEAR THAT BEFORE COMING TO THE CONCLUSION THAT A LIABILITY HAS CEASED TO EXIST OR THERE IS REMISSION/CESSATION OF A PARTICULAR LIABILITY, THE FOLLOWING THREE CONDITIONS ARE TO BE FULFILLED: A. IT MUST BE A TRADING LIABILITY: B. THE PERSON SHO WING SUCH LIABILITY MUST HAVE OBTAINED SOME BENEFIT EITHER IN CASH OR IN ANY OTHER MANNER IN RESPECT OF SUCH LIABILITY AND C. SUCH BENEFIT BY WAY OF CESSATION HAS ACCRUED TO THE APPELLANT IN THE RELEVANT FINANCIAL YEAR. FURTHER, THE BURDEN IS ON THE AO TO PROVE THAT CONDITIONS OF SECTION 41(1) OF THE ACT HAVE BEEN SATISFIED TO TREAT A LIABILITY AS AN INCOME ON ACCOUNT OF REMISSION OR CESSATION OF LIABILITY IN A PARTICULAR ASSESSMENT YEAR. IN THE PRESENT CASE, THE LIABILITY SHOWN BY THE APPELLANT IS NO DOUB T A TRADING LIABILITY. THERE IS ALSO NOTHING TO SHOW THAT THE CREDITORS HAVE WRITTEN - OFF THE LIABILITIES IN THEIR BOOKS. THEREFORE, IT CANNOT BE SAID THAT ANY BENEFIT ON ACCOUNT OF THE LIABILITY HAS ACCRUED TO THE APPELLANT. THE THIRD AND THE MOST CRUCIAL CONDITION IS WHETHER THE LIABILITY HAS CEASED TO EXIST IN THE IMPUGNED ASSESSMENT YEAR. AS PER AO'S OWN OBSERVATION, THE SUNDRY CREDITORS HAVE REMAINED OUTSTANDING FOR MORE THAN THREE YEARS. IN FACT, IN THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF, THE APPE LLANT HAS FURNISHED EVIDENCE BEFORE THE AO TO DEMONSTRATE THAT PAYMENTS HAVE ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 10 BEEN MADE TO CREDITORS SUBSEQUENT TO THE RELEVANT FINANCIAL YEAR THROUGH LEGITIMATE BANKING CHANNELS. ALSO, THE AO HAS ACCEPTED THE SALES OF THE APPELLANT WHILE TREATING THE PURCH ASES AS BOGUS. THE AO STATED THAT HE HAS ISSUED NOTICES U/S 133(6) IN RESPECT OF THE PURCHASES MADE DURING THE YEAR AND AT THE END, HE CHOSE TO DISALLOW 50% OF THE SUNDRY CREDITORS AS ON 31.03.2012. HE WAS THEREFORE NOT CLEAR WHETHER THIS AMOUNT OF RS. 4,5 1,18,981/ - SUNDRY CREDITORS INCLUDED THE BROUGHT FORWARD AMOUNTS/CREDITORS AT THE BEGINNING OF THE FINANCIAL YEAR. ON THE CONTRARY, THE LD AR HAS CONTENDED THAT THE CLOSING SUNDRY CREDITOR BALANCE INCLUDED THE EARLIER AMOUNTS AND THE GIST OF THE SUBMISSION S IS AS UNDER: CLOSING BALANCES OF SUNDRY CREDITORS AS ON 31.03.2011 - RS. 3,57,64,404/ - PURCHASES MADE DURING THE FINANCIAL YEAR 2011 - 12 - RS. 2,74,31,852/ - PAYMENTS/DEBITS DURING THE YEAR 2011 - 12 RS. 1,84,10,281/ - AT THE END OF THE YEAR 2011 - 12 RS.4,47,85,975/ - FROM THE ABOVE, IT COULD BE INFERRED THAT THE CLOSING BALANCE OF SUNDRY CREDITORS AS AT END OF THE YEAR INCLUDED SOME PAN OF EARLIER BALANCES ALSO. HENCE IT IS CONSIDERED THAT THE BASIS OF THE ADDITION MADE HAS NO STRONG FOOTING. THERE IS FORCE IN THE ARGUMENTS PUT FORWARD BY THE LD AO IN THIS REGARD. IN VIEW OF THE ABOVE STATED FACTS AND THE DECISIONS RELIED UPON BY THE APPELLANT, I AM OF THE CONSIDERED VIEW, THAT THE ALLEGATION MADE BY THE AO ARE NOT FULLY JUSTIFIED AND HENCE. I CONFIRM THE ADDITION OF 10 PERCENT AND NOT 50 PERCENT LEVIED BY THE AO AND ALLOW THE BALANCE 40 PERCENT. THUS, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 7 . ON APPRAI SAL OF THE ABOVE MENTIONED FINDING , WE FIND THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY IN VIEW OF THE PROVISIONS U/S 41(1) OF THE ACT. IT IS NOT IN DISPUTE THAT THE LIABILITY EXISTS AT THE RELEVANT TIME . THE ASSESSEE NOWHERE GOT ANY BENEFIT NOR LIABILITY DISCHARGED . THERE IS NO CESSATION OF LIABIL ITY BECAUSE LIABILITY EXISTS IN THE BOOKS OF ACCOUNT. THE LIABILITY NOWHERE CEASED TO EXISTS SP PECIFICALLY, IN THE CIRCUMSTANCES WHEN THE ASSESSEE HAS SHOWN THE LIABILITY IN HIS BOOKS OF ACCOUNT. NO PARAMETER HAS BEEN GIVEN ON ACCOUNT OF DISALLOWANCE OF 50 % OF THE SUNDRY CREDITORS. THE LIABILITY WAS OF THE EARLIER YEARS EVEN IF W.E.F 2006 - 07 ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 11 ONWARDS. NO DOUBT, THERE MAY BE SOME HARDSHIP TO PROVE THE CLAIM OF THE ASSESSEE ON ACCOUNT LAPSE OF TIME. SINCE THE ASSESSEE NOWHERE GET ANY BENEFIT ON ACCOUNT OF CESS ATION LIABILITY IF ANY, THEREFORE, THE CREDIT AMOUNT CAN BE SAID TO BE RELATED TO HIM AND IS NOT LIABLE TO BE ADDED TO THE INCOME OF THE ASSESSEE. ANYHOW, TO JUSTIFY THE CLAIM IF ANY , THE CIT(A) HAS RESTRICTED THE ADDITION TO THE EXTENT OF 10% OF THE TOTAL LIABILITY WHICH HAS NOT BEEN DISPUTED BY ASSESSEE. TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APP ELLATE STAGE. ACCORDINGLY, THESE ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 8 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HEREBY ORDERED TO BE D ISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 27 /11 /2019 . SD/ - SD/ - ( RAJESH KUMAR ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 27 /11 /2019 V IJAY /SR. PS ITA NO. 4201 /M/201 8 A.Y.20 12 - 13 12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI