ITO, New Delhi V. M/s. Anka India Ltd., New Delhi

ITA 682/DEL/2015

• Counselvise Citation: 68220114 RSA 2015
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 14-08-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 03-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS RAKHI VIMAL
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2, NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 682/DEL/2015 AY: 2011-12 INCOME TAX OFFICER, WARD 2(4) VS. M/S A NKA INDIA LIMITED, NEW DELHI 4A/35, OLD RAJINDER NAGAR, NEW DELHI 110 060 PAN: AAACA2017J) (APPELLANT) (RESPONDENT) APPELLANT BY : MRS. RAKHI VIMAL, JCIT RESPONDENT BY : NONE ORDER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER DT. 28.11.2014 OF LD.CIT(A)-I, NEW DELHI FOR ASSESSMENT YEAR 2011 -12. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, DESPITE ISSUE OF NOTICE. HOWEVER AN APPLICATION WAS MADE FOR ADJOURNMENT WHI CH WAS REJECTED AND THE CASE WAS HEARD EXPARTE QUA THE ASSESSEE ON MERITS. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN:- 1. DELETING THE ADDITION OF RS. 14,20,722/- MADE BY TH E AO ON ACCOUNT OF BOGUS OUTSTANDING LIABILITY WHEN THE SAME IS NOT CONFIRMED BY THE CREDITOR, RATHER IN THE BOOKS OF CREDITOR NIL BALA NCE IS APPEARING IN THE NAME OF THE ASSESSEE. ITA 682/DEL/2015 A.Y. 2011-12 2 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 4. AFTER HEARING THE LD. DR, MRS. RAKHI VIMAL, I FI ND THAT THE ORDER OF THE LD. CIT(A) CALLS FOR NO INTERFERENCE. LD. CIT(A) VIDE PARA NO. 5.3 IN HIS IMPUGNED ORDER HAS HELD AS FOLLOWS:- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE ID. AR AND PERUSED THE ORDER PASSED BY THE AO. THE AO MADE ADDITION OF RS.14,20,722/- WHICH WAS A CREDIT BALANCE IN THE NAME OF M/S DOW C HEMICAL INTI. P. LTD. ON THE GROUND THAT IN THE REPLY RECEIVED FROM DOW CHEMICAL INTI LTD, THE OPENING BALANCE HAS BEEN SHOWN AT NIL AND CLOSI NG BALANCE AT RS.3,46,530/-- AS CREDIT, WHICH MEANS THAT PAYMENT OF RS.3,46,530/-- IS DUE TO BE PAID BY THE SAID PARTY TO THE ASSESSEE. T HE AO ISSUED SHOW CAUSE TO THE ASSESSEE. THE ASSESSEE REPLIED THAT TH EY HAVE MADE PAYMENT TO DOW CHEMICAL INTI. P. LTD. AS ADVANCED. THE AO T HEREFORE, TREATED THE SAID LIABILITY OF RS.14,20,722/- AS BOGUS AND ADDED TO THE INCOME OF THE APPELLANT. THE APPELLANT SUBMITTED THAT THEY OWED R S.92,40,783/- TO DOW CHEMICAL INTI. P LTD. HOWEVER, THE APPELLANT COMPAN Y WENT BEFORE BIFR AS IT HAD BECOME SICK COMPANY. IT WAS SUBMITTED THA T THE BIFR HAD DIRECTED THE APPELLANT TO PAY 15% OF PRINCIPAL OUTS TANDING WHICH AMOUNTS TO RS.14,20,722/- AND BALANCE 85% AMOUNT WA S WAIVED. IT WAS SUBMITTED THAT THE BIFR HAS PASSED THE ORDER ON 15. 1.2009 ISSUED ON 20.5.2009 TO THIS EFFECT. FOR SAKE OF CONVENIENCE, THE RELEVANT PART OF PARA 10.1 OF THE BIFR ORDER, WHICH PERTAINS TO STAT EMENT OF SACRIFICES IS REPRODUCED AS UNDER: 'AS ON 31.3.2008, THE COMPANY HAD 93 SUNDRY CREDITO RS WITH OUTSTANDING DUES OF RS.394.51 LAKHS (PLEASE REFER T O ANNEXURE). ITA 682/DEL/2015 A.Y. 2011-12 3 OUT OF THE ABOVE, 25 SUNDRY CREDITORS AMOUNTING TO RS.322.05 LAKH ARE CONSIDERED OLD, NOT SEEKING CLAIMS / PAYMENT A ND HENCE, THE COMPANY PROPOSES TO SETTLE THEM AT 15% OF THEIR PRI NCIPAL) SUM FROM THE FINANCIAL YEAR 2009-10. THE ENTIRE PAYMENT WILL BE COMPLETED DURING THE F. Y. 2011- 12. IN RESPECT OF 68 SUNDRY CREDITORS WITH AN OUTST ANDING OF RS. 72.46LAKHS, NO RELIEFS AND CONCESSIONS ARE ENVISAGE D AS THEY ARE TREATED RUNNING CREDITORS WHOSE SERVICES WILL CONTI NUE TO BE UTILIZED BY THE COMPANY DURING THE REHABILITATION P ERIOD.' ON PERUSAL OF THE ANNEXURE ATTACHED WITH ORDER, I F IND THAT THE NAME OF THE DOW CHEMICAL INT. P. LTD. APPEARS AT SE RIAL NO. 6 AND 7 UNDER THE CATEGORY OLD CREDITORS AND TOTAL AMOUNT IS RS.9240783.68 AT SERIAL NO. 6 AND RS.230689.57 AT S ERIAL NO. 7. THUS, THE FACT THAT THE APPELLANT WAS LIABLE TO PAY THE AMOUNT OF RS.14,20,7;22/- TO DOW CHEMICAL INTI. P. LTD. CANNO T BE DENIED. THE FACT THAT THE APPELLANT HAS MADE THE SAID PAYME NT TO DOW CHEMICAL INTI. P. LTD. IS ALSO NOT UNDER DISPUTE. F URTHER THE PAYMENT MADE BY THE APPELLANT TO THE PARTY CANNOT B E ADDED AS INCOME IN THE HAND OF THE APPELLANT UNDER ANY PROVI SIONS OF THE ACT. MOREOVER, THIS CREDIT OF DOW CHEMICAL INTI. P. LTD. IS NOT A LIABILITY CREATED DURING THE YEAR AND THEREFORE, TH ERE IS NO BASIS FOR ADDITION OF THE AMOUNT DURING THE YEAR. THE OBSERVA TION OF THE AO THAT DOW CHEMICAL INTI. P. LTD. HAS SHOWN NIL OPENI NG BALANCE OF THE APPELLANT CAN BE FOR THE REASON THAT DOW CHEMIC AL INTI. P. LTD. HAD WRITTEN OFF THE AMOUNT RECEIVABLE IN ITS BOOKS OF ACCOUNTS. DOW CHEMICAL INTI. P. LTD. HAS NOT DISPUTED THE RECEIPT OF AFORESAID AMOUNT FROM THE APPELLANT. UNDER THESE CIRCUMSTANCE S, THE ADDITION MADE IN THE HAND OF THE APPELLANT IS NOT S USTAINABLE AND HENCE, THE SAME IS DIRECTED TO BE DELETED. THE AO IS HOWEVER ITA 682/DEL/2015 A.Y. 2011-12 4 DIRECTED TO INFORM TO THE ASSESSING OFFICER OF DOW CHEMICAL INTI. P. LTD. TO ASCERTAIN WHETHER THE RECEIPTS FROM THE APP ELLANT HAS BEEN SHOWN AS THEIR INCOME OR NOT. THE GROUNDS OF APPEAL ARE ALLOWED. 5. LD. DR COULD NOT CONTROVERT THIS FACTUAL FINDING S OF THE LD. CIT(A). 6. IN VIEW OF ABOVE, WE UPHOLD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER,2015. SD/- (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 19 TH OCTOBER, 2015 *SR BHATNAGAR* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2. RESPONDENT; 3. CIT; 4. CIT(A); 5. DR; 6. GUARD FILE BY ORDER ASSTT. REGISTRAR