ITO,Ward-11(3), Kolkata, Kolkata V. Maple Promoters & Builders(P)Ltd, Kolkata

ITA 542/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7934 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2012
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2012
• Court: TRIBUNAL
• Department Lawyers: K K DAS
• Assessee Lawyers: N O N E
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND ! ! ! ! , '# ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SANJAY ARORA, AM] $ $ $ $ / I.T.A NO. 542/KOL/2012 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2007-08 INCOME-TAX OFFICER, WD-11(3), KOLKATA. VS. M/S. M APLE PROMOTERS & BUILDERS PVT. LTD. (PAN: AABCM7293F) (*+ /APPELLANT ) (,-*+/ RESPONDENT ) FOR THE APPELLANT: SHRI K. K. DAS FOR THE RESPONDENT: N O N E DATE OF HEARING: 07.08.2012 DATE OF PRONOUNCEMENT: 07.08.2012 '. / ORDER IMMEDIATELY UPON CONCLUSION OF HEARING OF THIS APPE AL ON 7 TH AUGUST, 2012, THE BENCH PASSED THE FOLLOWING ORDER: 7 TH AUGUST, 2012 APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT. DETAILED ORDER WILL FOLLOW. PER BENCH: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XII, KOLKATA IN APPEAL NO. 658/CIT(A)-XII/WD-11(3)/09-10 BOTH DATED 06.01.2012 . ASSESSMENT WAS FRAMED BY ITO, WARD-11(3), KOLKATA U/S. 143(3) OF THE INCOME TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DA TED 30.11.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION OF SUNDRY CREDITORS NOT WRITTEN BACK. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAD ERRED IN COMING TO A CONCLUSION THAT PROVISION OF SECTION 41(1) WAS NOT APPLICABLE TO THE SUNDRY CREDITORS THAT WERE WRITTEN OFF. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS REQUIRED THE ASSESSEE TO EXPLAIN THE 2 ITA 542/K/2012 M/S. MAPLE PROMOTERS & BUILDERS PVT . LTD. A.Y. 07-08 OUTSTANDING SUNDRY CREDITORS AMOUNTING TO RS.35,88, 687/-. AS THE ASSESSEE COULD NOT FILE THE CONFIRMATIONS OR DETAILS, AS REQUIRED BY AO, HE TRE ATED THESE SUNDRY CREDITORS AS NOT EXISTING LIABILITY AND MADE ADDITION TO THE RETURNED INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE ADD ITION AFTER CONSIDERING THE WRITTEN SUBMISSIONS OF THE ASSESSEE THAT THE ASSESSEE HAS N OT OBTAINED ANY BENEFIT FROM ABOVE TRADING LIABILITY AND THESE ARE NOT ACTUALLY WRITTEN OFF IN THE BOOKS OF ACCOUNT OF ASSESSEE. ACCORDING TO CIT(A), THESE ARE OUTSTSANDING LIABILITIES AS ON TH E DATE. HENCE, HE DELETED THE ADDITION. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 4. WE FIND THAT THE STATUTORY AUDITORS IN HIS NOTES ON ACCOUNT MENTIONED THAT BALANCE OF SUNDRY CREDITORS ARE SUBJECT TO CONFIRMATIONS. IT IS ALSO A FACT THAT THE ASSESSEE IN ITS BALANCE SHEET HAS DISCLOSED ON LIABILITY SIDE THE LIABILITY OF SUNDRY CREDITORS, WHICH ARE OLD BUT IT HAS NEVER CEASED TO EXIST. WE ARE OF THE VIEW THAT THE CONTENTION OF THE AO THAT SUNDRY CREDITORS BEING OLD SHOULD BE TREATED AS CEASED LIABILITY IS NOT CORRECT. THE ASSESSEE HAS NOT WRITTEN OFF SUCH LIABILITY IN ITS ACCOUNTS AS IT IS NOT SURE TH AT THE SUNDRY CREDITORS HAVE GIVEN UP THEIR DUES. AS PER SECTION 41, IT IS PREROGATIVE OF THE ASSESSE E TO WRITE OFF THE LIABILITY IN ITS ACCOUNTS AND ONCE WRITE OFF IS MADE THE ASSESSEE IS SUBJECT TO A DDITION. BUT IN THE PRESENT CASE, THE ASSESSEE HAS NOT TREATED THE SUNDRY CREDITORS AS CEASED LIAB ILITY AND THE LIABILITY WAS NOT WRITTEN OFF IN ITS ACCOUNTS RATHER IT WAS OUTSTANDING. IN SUCH CIRCUM STANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY HELD THAT THE ASSESSEE HAS NOT OBTAINED ANY BENEFIT FROM THE ABOVE TRDING LIABILITY IN THE YEAR UNDER CONSIDERATION AND EVEN IN THE BALANC E SHEET ASSESSEE ADMITTED ITS LIABILITY TO PAY TO THE ABOVE CREDITORS. THE CIT(A) HAS RIGHTLY DEL ETED THE ADDITION AND WE CONFIRM THE SAME. APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 6. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- ! ! ! ! , '# , (SANJAY ARORA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( /# /# /# /#) )) ) DATED: 7TH AUGUST, 2012 01 %2 3 JD.(SR.P.S.) 3 ITA 542/K/2012 M/S. MAPLE PROMOTERS & BUILDERS PVT . LTD. A.Y. 07-08 '. 4 ,5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT ITO,WD-11(3), KOLKATA. 2 ,-*+ / RESPONDENT M/S. MAPLE PROMOTERS & BUILDERS PVT. LTD., 2, ST. GEORGE GATE ROAD, HASTINGS, KOLKATA-22. 3 . .% ( )/ THE CIT(A), KOLKATA 4. .% / CIT, KOLKATA. 5 . >? ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, '.%@/ BY ORDER, /ASSTT. REGISTRAR .