A.K. Automatic, V. ACIT Rohtak Circle,

ITA 685/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 5583 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 21-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JASWINDER SINGH
• Keywords: Period of limitation; Time period of passing order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA : VICE PRESIDENT AN D SHRI D.R. SINGH: JUDICIAL MEMBER ITA NO. 685/DEL/08 A.Y. 2004-05 M/S A.K. AUTOMATIC VS. ACIT ROHTAK CIRCLE, HISSAR ROAD, ROHTAK. ROHTAK. PAN/ GIR NO. AABFA 4065A (APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI GAUTAM JAIN CA RESPONDENT BY : SHRI JASWINDER SINGH SR. DR O R D E R PER G.E. VEERABHADRAPPA, V.P : THIS APPEAL, BY THE ASSESSEE, ARISES OUT OF THE ORD ER DATED 31-3-2008 OF THE CIT(A) RELATING TO A.Y. 2004-05. 2. THE ONLY DISPUTE IN THIS APPEAL RELATES TO SUSTE NANCE OF ADDITION OF RS. 1,59,330/- BY INVOKING THE PROVISIONS OF SEC. 41(1) OF THE INC OME-TAX ACT, 1961, IN RESPECT OF SUNDRY CREDIT BALANCES THAT WERE OUTSTANDING FOR MO RE THAN THREE YEARS AT THE CLOSE OF THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDE R CONSIDERATION. 3. LEARNED COUNSEL FOR THE ASSESSEE OPPOSED THE ACT ION OF THE REVENUE AUTHORITIES IN THE LIGHT OF THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. 236 ITR 518 AND ALSO THE FOLLOWING A UTHORITIES: SHRI VARDHMAN OVERSEAS LTD. VS. ACIT 24 SOT 393 (DE L.); INDERSONS LEATHERS (P) LTD. VS. ADDL. CIT 114 ITD 2 42 (ASR.); VICTOR CYCLE (P) LTD. VS. ACIT 90 TTJ 776 (CHD.); UTTAM AIR PRODUCTS (P) LTD. VS. DCIT 99 TTJ 718 (DE L.); ACIT VS. POPULAR VEHICLES & SERVICES LTD. 5 SOT 739 (COCHIN); CIT VS. SOUTHERN ROADWAYS LTD. 202 CTR 279 (MAD.). 2 4. THE LEARNED COUNSEL POINTED OUT THAT ASSESSEE HA S NEITHER TRANSFERRED THE SUMS TO THE P&L A/C NOR THERE IS ANY EVIDENCE TO SUGGEST TH E LIABILITIES, WHICH ARE SHOWN AS OUTSTANDING IN THE BOOKS OF ACCOUNT, CEASED TO EX IST AT THE END OF THE ACCOUNTING YEAR. 5. THE LEARNED DR ON THE OTHER HAND JUSTIFIED THE O RDER OF THE CIT(A) ON THE REASONING THAT THE CREDITORS HAVE LOST THE RIGHT T O CLAIM UPON THE EXPIRY OF LIMITATION PERIOD AND THE ASSESSEE IS NOT OBLIGED TO PAY THE S UMS IN QUESTION. 6. WE HAVE CAREFULLY GONE THROUGH THE RECORDS AND A RE UNABLE TO SUSTAIN THE REVENUES CONTENTIONS. THE AMOUNTS IN QUESTION ARE THE OUTSTANDING BALANCE IN THE BOOKS AS A RESULT OF TRADE TRANSACTIONS. IT CANNOT BE SAI D THAT THERE IS CESSATION OF ANY LIABILITY WHEN THE ASSESSEE CONTINUES TO ACKNOWLEDGE THEM A S OUTSTANDING IN THE BALANCE-SHEET FROM TIME TO TIME. THE ADDITION IS CLEARLY UNWARRAN TED IN THE LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SUGAULI SUGAR WORKS (P) LTD. (SUPRA) AND THE SAME IS DELETED. THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 28-1-2009. ( D.R. SINGH ) ( G.E. VEERABHADRAPPA ) JUDICIAL MEMBER VICE PRESIDENT DATED: _____________ FEB. 2009. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR