ITO 25(3)(2), MUMBAI V. VINODKUMAR BHANWARILAL DHAKAD, MUMBAI

ITA 5030/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59776 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 12-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: G L RANKA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F,MUMBAI BEFORE SHRI D. MANMOHAN (VICE PRESIDENT) & SHRI T.R. SOOD (AM) I.T.A. NO.5030/MUM/2010 (A.Y. 2007-08)) INCOME-TAX OFFICER-25(3)(2), C-11, R.NO.306, PRATYAKSHA KAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI-400 051. VS. SHRI VINODKUMAR BHANWARILAL DHAKAD, CHANDRA DARSHAN APARTMENT, AKURLI CROSS RD. NO. 2, KANDIVLI (E), MUMBAI-400 101. PAN: ADVPD4260F APPELLANT RESPONDENT APPELLANT BY SHRI P.C. MAURYA. RESPONDENT BY SHRI G.L. RANKA. DATE OF HEARING 12-01-2012. DATE OF PRONOUNCEMENT 20-01-2012 O R D E R PER T.R. SOOD, AM : IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWI NG GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S. 41(1) OF T HE I.T. ACT, 1961 WITHOUT APPRECIATING THE FACT THAT IN THE ASSESSMEN T PROCEEDINGS, THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVING TH E NATURE OF LIABILITIES, IDENTITY OF THE CREDITORS AND CONFIRMATION FROM THE CREDITORS AND IN TURN FAILED TO PROVE THE EXISTENCE OF LIABILITIES SHOWN AS SUNDRY CREDITORS. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT DUR ING ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAD CERTAIN OUTSTANDING C REDITORS AMOUNTING TO RS.45,21,981/-. ITA NO.5030/M/2010 VINODKUMAR B. DHAKAD 2 HOWEVER, DESPITE VARIOUS OPPORTUNITIES, THE ASSESSE E DID NOT FILE CONFIRMATIONS AGAINST THE SAME. THE AO LISTED OUT THE CREDITORS AS UNDER : SR.NO. NAME OF THE CREDITOR AS ON 31.03.2007 (RS.) PURCHASES IN FY 2006-07 OF RS.20,000 AND ABOVE (RS.) OLD CREDITORS (RS.) 1 ALPS TIMBERS 13522 2 DHARMESH TIMBER 300000 1206271 3 HEM KUND TIMBER 258636 258636 4 JAGANNATH TIMBER 436825 511825 5 JAI BHARAT SAW MILL 867676 326253 6 KAMAL TIMBER 170754 5 41423 7 KEWATE & SONS 246506 246506 8 K.R. JOSHI & SONS 196645 196645 9 MANAGLAM TIMBERS 214875 918145 10 MONICA INDUSTRIES 348999 348999 11 POPULAR TIMBERS 124796 124796 12 PRAKASH & CO. 507525 507525 13 PRATIK TRADERS 300000 517498 14 SINGH BROTHERS 579945 579945 15 ATLAS WOOD PRODUCT (22486) TOTAL 4571218 4234017 2050444 IN RESPECT OF OLD CREDITORS, IN VIEW OF THE FAILURE OF THE ASSESSEE TO PROVE THE SAME, THESE OLD CREDITS WERE ADDED TO THE PROFIT OF THE ASSESSEE U /S.41(1). 3. ON APPEAL, THE LD. CIT(A) ALLOWED THE RELIEF ON THE BASIS OF DECISION OF TRIBUNAL IN THE CASE OF DCIT VS. ALLIED LEATHER FINISHERS PVT. LTD. (32 SOT 549) WHEREIN IT WAS HELD THAT IF LIABILITY WAS CARRIED FORWARD, THEN THE SAME CANNOT BE TREATE D AS CEASED. ITA NO.5030/M/2010 VINODKUMAR B. DHAKAD 3 4. BEFORE US, THE LD. DR SUBMITTED THAT THE ASSESSE E HAS NOT FILED CONFIRMATIONS AGAINST THE OLD SUNDRY CREDITORS AND, THEREFORE, IT CANNOT BE S AID THAT LIABILITY HAS NOT CEASED. 5. ON THE OTHER HAND, THE LD. AR, WHILE STRONGLY SU PPORTING THE ORDER OF CIT(A), SUBMITTED THAT IF LIABILITY WAS BEING CARRIED FORWARD, THEN S UCH LIABILITY CANNOT BE TREATED AS CEASED. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT DESPITE OPPORTUNITIES, CONFIRMATIONS FOR OUTSTANDING CREDITORS IN RESPECT OF OLD CREDITO RS HAVE NOT BEEN FILED. THE INITIAL BURDEN IS ON THE ASSESSEE TO SHOW THAT THE CREDITORS ARE EXISTIN G. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF AO WITH A DIRECTION THAT IF SUCH CREDITORS ARE PROVED OR HAVE ALREADY BEEN PAID , THEN NO ADDITION IS REQUIRED TO BE MADE. OTHERWISE, THE ISSUE MAY BE DECIDED IN ACCORDANCE W ITH LAW. 7. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 20TH DAY OF JANUARY , 2012. SD/- SD/- (D. MANMOHAN) (T.R. SOOD) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI: 20TH JANUARY , 2012. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-35,MUMBAI. 4 CIT-25,MUMBAI. 5.DR,F BENCH, MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, I TAT, MUMBAI. ITA NO.5030/M/2010 VINODKUMAR B. DHAKAD 4 DETAILS DATE INITIALS DESIGNATI ON 1. DRAFT DICTATED ON 16-01-2012 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 17-01-2012 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 . DATE O N WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER