UB AIR P.LTD, MUMBAI V. DCIT 5(3), MUMBAI

ITA 7506/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1953 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 31-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 16-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Keywords: Deemed to accrue or arise in india
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 7506/MUM/2014 (ASSESSMENT YEAR: 2010-11) M/S. UB AIR PVT. LTD. VS. D C I T 5(3) EWART HOUSE, 1 ST FLOOR MODI STREET MUMBAI 400001 AAYAKAR BHAVAN M.K. ROAD MUMBAI 400020 PAN AAACU1399K APPELLANT RESPONDENT APPELLANT BY: SHRI K. GOPAL RESPONDENT BY: MS. POOJA SWAROOP DATE OF HEARING: 21.11.2016 DATE OF PRONOUNCEMENT: 25.11.2016 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 9, MUMBAI DATED 16.10.2014 FOR A.Y. 2010-11; UPHOLD ING THE ORDER OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOM E TAX ACT, 1961 (IN SHORT 'THE ACT') VIDE ORDER DATED 19.03.2013. 2.1 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: - 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS.99 LACS WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE APPELLANT CRAVES LEAVE TO DO ADD, AMEND, ALT ER, DELETE OR RESCIND ANY OF THE ABOVE GROUNDS OF APPEAL. THE ONLY ISSUE FOR CONSIDERATION IN THIS APPEAL IS THE ADDITION OF ` 99 LAKHS. 2.2.1 THE LEARNED A.R. OF THE ASSESSEE FOR THE ASSE SSEE WAS HEARD IN SUPPORT OF THE GROUNDS RAISED AND REITERATED THE SU BMISSIONS PUT FORTH BEFORE THE LEARNED CIT(A) WHICH ARE EXTRACTED HEREU NDER: - 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD. A.O. HAS ASKED THE APPELLANT TO PROVE THE GENUINENESS OF THE OUTSTANDING ITA NO. 7506/MUM/2014 M/S. UB AIR PVT. LTD. 2 LIABILITIES AMOUNTING TO RS.99,00,000/-. ACCORDING TO THE LD. A.O, THESE LIABILITIES ARE OUTSTANDING FROM THE A.Y. 200 2-03 AND THE SAME ARE BEING CARRIED ON AS OUTSTANDING LIABILITIE S FROM YEAR TO YEAR. THE LD. A.O. HAS ALSO ASKED THE APPELLANT VID E LETTER DATED 20.12.2012 TO SHOW CAUSE AS TO WHY THE OUTSTANDING LIABILITY AMOUNTING TO RS.99,00,000/- SHOULD NOT BE DISALLOWE D UNDER SECTION 41(1) OF THE ACT. 4. THE APPELLANT IN REPLY TO THE ABOVE SHOW CAUSE N OTICE FILED A LETTER DATED 05.03.2013 AND EXPLAINED THAT OUT OF TOTAL OU TSTANDING LIABILITY OF RS.99,00,000/-, AN AMOUNT OF RS.91,000 001/- PERTAINS TO FUEL BILLS. HOWEVER, DUE TO SUDDEN DEPARTURE OF THE ACCOUNTS PERSONNEL WITHOUT PROPER INTIMATION AND HANDING OVE R OF WORK THE SAME WAS REMAINED TO BE RECONCILED FROM THE YEAR 20 03. IN THE ACCOUNTING YEAR 2011-12, THE SAME WAS VERIFIED AND PROPER ENTRIES HAS BEEN PASSED IN THE BOOKS OF THE APPELLA NT IN THE YEAR 2011-12. HOWEVER, WITH RESPECT TO THE REMAINING OUT STANDING LIABILITY OF RS.8,00,000/- THE APPELLANT WAS NOT AB LE TO RECONCILE. THE RELEVANT EXTRACT OF THE APPELLANT'S LETTER IS R EPRODUCED BY THE LD. A.O. IN PARAGRAPH 5.2 AT PAGE 3 OF THE ASSESSME NT ORDER. 5. THE LD. A.O. HOWEVER, WITHOUT APPRECIATING THE F ACTS AND CIRCUMSTANCES OF THE CASE PASSED THE IMPUGNED ASSES SMENT ORDER DATED 19.03.2013 UNDER SECTION 143(3) OF THE ACT DE TERMINING TOTAL INCOME OF THE APPELLANT AT RS. 1,73,63,470/- BY DISALLOWING THE OUTSTANDING LIABILITY OF RS.99,00,000/- INVOKIN G THE PROVISIONS OF SECTION 41(1) OF THE ACT. THE APPELLANT BEING AG GRIEVED BY THE ABOVE PREFERRED THE PRESENT APPEAL BEFORE YOUR HONO URS. THE APPELLANT CRAVES LEAVE OF YOUR HONOURS TO DEAL WITH THIS ISSUE PARAGRAPH WISE AS UNDER: 6. DISALLOWANCE MADE UNDER SECTION 41(1) OF THE ACT IS UNJUSTIFIED RS99,OO,000/- I. THE LD. A.O. HAS DISCUSSED THIS ISSUE IN PARAGRA PH 5 - 5.5 AT PAGES 2 - 5 OF THE ASSESSMENT ORDER. IN THE PARAGRA PH 5.1 OF THE ASSESSMENT ORDER THE LD. A.O. HAS OBSERVATION WITH RESPECT TO THE OUTSTANDING LIABILITY AMOUNTING TO RS. 99,00,000/- FROM THE ASSESSMENT YEAR 2002-03 AND THE SAME ARE BEING CARR IED ON AS OUTSTANDING LIABILITIES FROM YEAR TO YEAR. THE LD. A.O. HAS FURTHER MENTIONED ABOUT THE QUERY RAISED TO THE APPELLANT T O FURNISH THE RELEVANT DETAILS. THE APPELLANT SUBMITS THAT THE ST ATEMENT MADE BY THE LD. A.O. IN THIS PARAGRAPH IS FACTUALLY CORR ECT. HENCE, THE APPELLANT DOES NOT WANT TO MAKE COMMENT ON THE SAME AS OF NOW. HOWEVER, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE APPELLANT, RELYING ON THE CONTENTS OF THIS PARAGRAP H OF THE ASSESSMENT ORDER. II. IN PARAGRAPH 5.2 OF THE ASSESSMENT ORDER, THE L D. A.O. HAS REPRODUCED THE SUBMISSIONS MADE BY THE APPELLANT VI DE ITS LETTER DATED 05.03.2013. THE APPELLANT HEAVILY RELIES ON T HE SAME. THE APPELLANT FURTHER SUBMITS THAT THE PROVISION OF SEC TION 41(1) OF THE ITA NO. 7506/MUM/2014 M/S. UB AIR PVT. LTD. 3 ACT IS NOT AT ALL APPLICABLE TO THE FACTS OF ITS CA SE. HENCE, THE DISALLOWANCE MADE BY INVOKING THE PROVISIONS OF SEC TION 41(1) OF THE ACT IS NOT AT ALL JUSTIFIED AND THE SAME MAY BE DELETED. III. IN PARAGRAPH 5.3 AT PAGE 3 OF THE ASSESSMENT O RDER, THE LD. A.O. HAS PROCEEDED TO MAKE THE DISALLOWANCE UNDER SECTIO N 41(1) OF THE ACT. THE APPELLANT CRAVES LEAVE OF YOUR HONOURS TO DEAL WITH THE SAME AS UNDER. A. WITH RESPECT TO THE CONTENTS OF SUB-PARAGRAPH (I ) OF THE ASSESSMENT ORDER, THE APPELLANT SUBMITS THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT HAS EXPLAINED TO THE LD. A.O. THAT DUE TO SUDDEN DEPARTURE OF THE ACCOUNTS PERSONNEL, WITHOUT PROPER HANDING OVER, IT HAS NOT BEEN ABLE TO IDENTI FY THE OUTSTANDING LIABILITY AMOUNTING TO RS. 99,00,000/-. HOWEVER, SUBSEQUENTLY THE APPELLANT WAS ABLE TO IDENTIFY THA T OUT OF THE TOTAL OUTSTANDING LIABILITY OF RS.99,00,000/-, AN A MOUNT OF RS.91,00,000/- PERTAINS TO THE FUEL CHARGES. AS THE APPELLANT HAS ONLY BEEN ABLE TO IDENTIFY THE SAME DURING THE ACCO UNTING YEAR ENDING ON 31.03.2012, IT HAS PASSED THE NECESSARY E NTRY IN THE F.Y. 2011-12 PERTAINING TO A.Y. 2012-13. THE APPELL ANT HAS ALSO OFFERED THE AMOUNT OF THE AMOUNT OF RS.99,00,000/- FOR TAXATION IN THE A. Y. 2012-13. THE LEDGER ACCOUNT OF AVIATION F UEL CHARGES IS ENCLOSED AT PAGES 3-5 OF THE PAPER BOOK AS WELL AS THE RETURN OF INCOME FOR A.Y. 2012-13 SHOWING THE SAME INCOME HAV E OFFERED FOR TAX IS ENCLOSED AT PAGE 49 OF THE PAPER BOOK. T HUS, TREATING AN AMOUNT OF RS.99,00,000/- AS CEASED LIABILITY UNDER SECTION 41(1) OF THE ACT IS NOT AT ALL JUSTIFIED AND THE SAME MAY BE DELETED. B. IN SUB-PARAGRAPH (II) OF THE ASSESSMENT ORDER, T HE LD. A.O., HAS MENTIONED THAT THERE HAS BEEN NO TRANSACTION IN THE SE ACCOUNTS FOR THE LAST SIX YEARS AND MORE. THE APPELLANT SUBM ITS THAT THE STATEMENT MADE BY THE LD. A.O. IN THIS SUB-PARAGRAP H (II) IS FACTUALLY CORRECT. HOWEVER, YOUR HONOURS WILL APPRE CIATE THAT THE APPELLANT IS GOING THROUGH VERY BAD PHASE. THE PERS ONS WHO ARE HANDING THE ACCOUNTS OF THE APPELLANT HAVE LEFT THE SERVICES WITHOUT GIVING ANY NOTICE AND WITHOUT PROPER HANDIN G OVER OF WORK. IT WAS ONLY DURING THE F.Y. 2011-12 THE APPEL LANT CAME TO KNOW THAT OUT OF OUTSTANDING LIABILITY OF RS. 99,00 ,000/-, AN AMOUNT OF RS. 91,00,000/- PERTAINS TO AVIATION FUEL CHARGES. THE APPELLANT, THEREFORE, IN THE F.Y. 2011-12 PERTAININ G TO A. Y. 2012- 13 PASSED THE NECESSARY ENTRIES AND ALSO OFFERED TH E SAME TO TAX. HENCE, TREATING THE ENTIRE AMOUNT OF RS. 99,00,000/ - AS CEASED LIABILITY UNDER SECTION 41(1) OF THE ACT IS UNJUSTI FIED AND THE SAME MAY BE DELETED. C. WITH RESPECT TO THE CONTENTS OF SUB-PARAGRAPH (I II) OF PARAGRAPH 5.3 OF THE ASSESSMENT ORDER, THE APPELLANT SUBMITS THAT SUBSEQUENT TO THE PASSING OF THE ASSESSMENT ORDER, THE APPELLANT HAS FILED ITS RETURN OF INCOME FOR A.Y. 2012-13 AND OFFERED THE E NTIRE AMOUNT OF RS.99,00,000/- TO TAX PLEASE SEE PAGE NO. 49 OF THE PAPER BOOK. ITA NO. 7506/MUM/2014 M/S. UB AIR PVT. LTD. 4 HENCE, TREATING THE AMOUNT OF RS.99,00,000/- AS CEA SED LIABILITY OF THE IMPUGNED ASSESSMENT YEAR UNDER SECTION 41(1) OF THE ACT IS WITHOUT ANY BASIS AND THE SAME MAY BE DELETED. D. WITH RESPECT TO THE CONTENTS OF SUB-PARAGRAPH (I V) OF PARAGRAPH 5.3 OF THE ASSESSMENT ORDER, THE APPELLANT SUBMITS THAT IT HAS ALREADY OFFERED THE AMOUNT OF RS.9900,000/- AS INCOME IN TH E A.Y. 2012- 13. HENCE, NO ADVERSE INFERENCE CAN BE DRAWN AGAINS T THE APPELLANT, RELYING ON THE CONTENTS OF THIS PARAGRAP H OF THE ASSESSMENT ORDER. IV. IN PARAGRAPH 5.4 OF THE ASSESSMENT ORDER THE LD . A.O. HAS RELIED ON THE DECISION OF HON`BLE SUPREME COURT IN THE CAS E OF CIT VS. KARAMCHAND THAPPER & ORS [1996] 222 ITR 112 (SC) TO DRAW AN ADVERSE INFERENCE AGAINST THE APPELLANT. THE APPELL ANT SUBMITS THAT THE DECISION RELIED UPON BY THE LD. A.O. IS DI STINGUISHABLE FROM THE FACTS OF THE APPELLANT'S CASE. HENCE, THE SAME CANNOT BE RELIED UPON. THE APPELLANT, THEREFORE, SUBMITS THAT NO ADVERSE INFERENCE CAN BE DRAWN AGAINST HIM, RELYING ON THE CONTENTS OF THIS PARAGRAPH OF THE ASSESSMENT ORDER. V. WITH RESPECT TO THE CONTENTS OF PARAGRAPH 5.5 OF THE ASSESSMENT ORDER THE APPELLANT SUBMITS THAT THE LD. A.O. IS NO T AT ALL JUSTIFIED IN TREATING THE OUTSTANDING LIABILITY AMOUNTING TO RS.99,00,000/- AS CEASED LIABILITY OF THE APPELLANT AND THEREBY MA DE THE ADDITION IN THE IMPUGNED ASSESSMENT YEAR INVOKING THE PROVIS IONS OF SECTION 41(1) OF THE ACT. THE APPELLANT SUBMITS THA T THE ENTIRE AMOUNT OF RS.99,00,000/- HAS BEEN OFFERED FOR TAX I N THE ASSESSMENT YEAR 2012-13. HENCE, TREATING THE SAME CEASED LIABILITY OF THE IMPUGNED ASSESSMENT YEAR IS WITHOU T ANY BASIS. THE APPELLANT, THEREFORE, PRAYS THAT THE DISALLOWAN CE MADE BY LD. A.O. UNDER SECTION 41(1) OF THE ACT IS UNJUSTIFIED AND YOUR HONOURS MAY BE PLEASED TO DELETE THE SAME. 7. THE APPELLANT, FURTHER, SUBMITS THAT MERELY BEC AUSE THE AMOUNT IS OUTSTANDING FOR MORE THAN THREE YEARS, THE SAME CAN NOT BE A BASIS FOR MAKING ADDITION UNDER SECTION 41(1) OF TH E ACT. THE APPELLANT TO SUPPORT THE ABOVE CONTENTION RELY ON T HE RECENT DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PURIDEVI MAHENDRAKUMAR CHAUDHARY [2014] 221 TAXMAN 375 (GUJARAT) WHEREIN THE COURT HAS HELD THAT WHERE ASS ESSEE HAD OUTSTANDING CREDITORS FOR GOODS AND ASSESSING OFFIC ER MADE ADDITION IN INCOME OF ASSESSEE UNDER SECTION 41(1) ON BASIS THAT WITH RESPECT TO 14 CREDITORS LIABILITY WAS OUTSTAND ING FOR MORE THAN THREE YEARS, ASSESSING OFFICER WAS NOT JUSTIFI ED IN HIS VIEW. 8. THE APPELLANT FURTHER RELY ON THE DECISION OF HO N'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BHOGILAL RAMIBHAI ATAR A [2004] 222 TAXMAN 313 (GUJARAT) WHEREIN THE HON'BLE HIGH COURT HAS DELETED THE ADDITION MADE BY INVOKING THE PROVISIONS OF SEC TION 41(1) OF THE ACT BY OBSERVING THAT WHERE ASSESSEE IN RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 HAD SHOWN CERTAIN AMOUNT BY WAY OF ITA NO. 7506/MUM/2014 M/S. UB AIR PVT. LTD. 5 HIS DEBTS AND ASSESSING OFFICER APPLYING PROVISIONS OF SECTION 41(1) ADDED BACK SAID AMOUNT IN INCOME OF ASSESSEE AS DEEMED INCOME, SINCE THERE WAS NOTHING ON RECORD TO SUGGES T THAT THERE WAS REMISSION OR CESSATION OF LIABILITY THAT TOO DU RING ASSESSMENT YEAR 2007-08, ABOVE AMOUNT COULD NOT BE ADDED BACK IN INCOME OF ASSESSEE. 2.2.2 BEFORE US, THE LEARNED A.R. OF THE ASSESSEE, WHEN QUERIED, ADMITTED THAT THE ASSESSEES SUBMISSION BEFORE THE AUTHORITI ES BELOW THAT THESE OUTSTANDING CREDITORS BALANCES OF ` 99 LAKHS WERE WRITTEN BACK AND OFFERED FOR TAX IN ITS RETURN OF INCOME FOR A.Y. 2012-13 (S UPRA) WAS NOT CORRECT. IT WAS ALSO CONTENDED THAT THE CREDITORS WERE PURSUING THEIR OUTSTANDING AMOUNTS BUT, ON BEING QUERIED, ADMITTED THAT NO LEG AL PROCEEDINGS WERE INITIATED BY CREDITORS FOR RECOVERY, NOR WAS ANY CO RRESPONDENCE IN THIS REGARD FILED. THE LEARNED A.R., HOWEVER, CONTENDS T HAT SINCE THE SAID FIGURE OF OUTSTANDING LIABILITIES FOR AVIATION FUEL IS STI LL ACKNOWLEDGED AS AN OUTSTANDING DEBT/LIABILITY IN ASSESSEES BOOKS OF A CCOUNT FOR THIS YEAR, THERE IS NO REMISSION OR CESSATION OF LIABILITY AND THEREFORE THE PROVISIONS OF SECTION 41(1) OF THE ACT COULD NOT BE INVOKED IN THE CASE ON HAND IN THE YEAR UNDER CONSIDERATION. IN SUPPORT OF THIS PROPOS ITION, THE LEARNED A.R. OF THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SHRI VARDHAMAN OVERSEAS LTD. ( 2002) 343 ITR 408 (DELHI). IT WAS PRAYED THAT THE ASSESSEES APPEAL B E ALLOWED. 2.3 PER CONTRA, THE LEARNED D.R. STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ACCORDING TO THE LEARNED D.R., T HE ASSESSEE ITSELF HAS ADMITTED THAT TO THE EXTENT OF ` 8 LAKHS THE OUTSTANDING LIABILITIES WERE NOT RECONCILABLE. IN RESPECT OF THE BALANCE ` 91 LAKHS, NO CONFIRMATIONS FROM PARTIES/CREDITORS OR DETAILS WERE FURNISHED TO PROV E/ESTABLISH THE IDENTITY OF THE PARTIES. IT WAS ALSO SUBMITTED THAT THE STAT EMENT OF THE ASSESSEE THAT IT HAS WRITTEN BACK AND OFFERED TO TAX THE OUT STANDING LIABILITIES OF ` 91 LAKHS IN THE RETURN OF INCOME FOR A.Y. 2012-13, WAS FOUND TO BE FALSE ON VERIFICATION BY THE AO. IT WAS SUBMITTED THAT EVEN IF THE PROVISIONS OF SECTION 41(1) OF THE ACT ARE FOUND NOT APPLICABLE T O THE SAID OUTSTANDING LIABILITIES, THEY ARE STILL TO BE DISALLOWED AS UNP ROVED CREDITS AS EXISTENCE OF THE SAME ARE NOT PROVED WITH ANY MATERIAL EVIDENCE; LIKE FUEL BILLS, NAMES ITA NO. 7506/MUM/2014 M/S. UB AIR PVT. LTD. 6 OF PARTIES FROM WHOM PURCHASED, CONFIRMATION FROM T HOSE PARTIES OF OUTSTANDING AMOUNTS AND THEREFORE IT CAN BE FAIRLY CONCLUDED THAT THERE WAS NO GENUINE OUTSTANDING LIABILITIES OF ` 99 LAKHS WHICH THE ASSESSEE WILL NEVER BE CALLED UPON TO PAY. 2.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD INCLUDING THE JUD ICIAL PRONOUNCEMENTS CITED. AS PER THE FACTS ON RECORD; IT IS SEEN THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER (AO) REQUIRED THE ASSESSEE TO PROVE THE GENUINENESS OF LIABILITIES AMOUNTING TO ` 99 LAKHS WHICH WERE BEING SHOWN AS OUTSTANDING, FAILING WHICH THE SAME WOULD BE BRO UGHT TO TAX UNDER SECTION 41(1) OF THE ACT. IN RESPONSE THERETO, THE ASSESSEE SUBMITTED THAT AN AMOUNT OF ` 91 LAKHS PERTAINED TO FUEL BILLS, BUT ADMITTED THAT IT COULD NOT RECONCILE THE BALANCE ` 8 LAKHS AND THAT THE SAME AMOUNT OF ` 99 LAKHS WAS OFFERED TO TAX IN A.Y. 2012-13. THE EXPLANATION S PUT FORTH DID NOT FIND FAVOUR WITH THE AO. OBSERVING, INTER ALIA, THAT THE ASSESSEES RETURN OF INCOME FOR A.Y. 2012-13 THOUGH DUE, WAS NOT FILED, THE AO ALSO NOTED THAT EVEN THOUGH AMPLE OPPORTUNITIES WERE OFFERED TO THE ASSESSEE, NO DETAILS OF WHO CONSTITUTED THE PARTIES PERTAINING TO THE OUTST ANDING LIABILITIES, THEIR DETAILS AND THEIR CONFIRMATION OF THESE TRANSACTION S, CREDIT WORTHINESS, ETC. WAS PRODUCED BY THE ASSESSEE AND EVEN THE LEDGER AC COUNTS WERE INCOMPLETE, AND PROCEEDED TO HOLD THAT AS THE ASSES SEE ACTUALLY DID NOT ESTABLISH THAT IT OWED ANY MONEY TO ANYBODY ON THIS ACCOUNT, BROUGHT THE SAME TO TAX IN THE ASSESSEES HANDS UNDER SECTION 4 1(1) OF THE ACT. 2.4.2 ON APPEAL, THE ASSESSEE WHILE SUBMITTING THAT THE OUTSTANDING LIABILITIES OF ` 91 LAKHS WERE ON ACCOUNT OF AVIATION FUEL, STATED T HAT IT WAS NOT ABLE TO RECONCILE THE BALANCE OF ` 8 LAKHS. ACCORDING TO THE ASSESSEE, THESE OUTSTANDING LIABILITIES PERTAINED TO EARLIER YEARS AND THE ENTIRE AMOUNT OF ` 99 LAKHS WERE WRITTEN BACK AND OFFERED TO TAX IN A. Y. 2012-13 AND THEREFORE SINCE THE AOS INVOKING OF SECTION 41 (1) IN THIS YEAR IS NOT JUSTIFIED, THE ADDITION MADE THEREUNDER IS TO BE DE LETED. THE LEARNED CIT(A), AFTER CONSIDERING THE ASSESSEES SUBMISSION S REJECTED THE ASSESSEES CONTENTIONS HOLDING AS UNDER: - ITA NO. 7506/MUM/2014 M/S. UB AIR PVT. LTD. 7 5. I HAVE CAREFULLY AND DISPASSIONATELY CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, STATEMENT OF FACTS, RELE VANT ASSESSMENT ORDER, WRITTEN SUBMISSIONS, RELIED UPON CASE LAWS A ND THE ARGUMENTS MADE BY THE LEARNED A.R. OF THE ASSESSEE BEFORE THE UNDERSIGNED. IT IS NOTED THAT NEITHER AT THE TIME OF ASSESSMENT STAGE NOR DURING THE APPEAL PROCEEDINGS, INSPITE THE SPECIFIC QUERY IN T HIS REGARD, THE APPELLANT HAS BEEN ABLE TO PROVIDE EVEN THE BASIC D ETAILS SUCH AS THE FUEL BILLS ETC., PAYMENT OF WHICH WAS SHOWN STILL O UTSTANDING BY THE APPELLANT. UNDER THESE CIRCUMSTANCES, IT CAN E FAIR LY CONCLUDED THAT THERE WAS NO GENUINE OUTSTANDING AND THERE IS NO PO SSIBILITY OF ANY PAYMENT FROM THE APPELLANT TO THESE VERY OLD OUTSTA NDING CREDITS. UNDER THESE CIRCUMSTANCES, THE ACTION OF THE AO IN TREATING THE VERY OLD CREDITS AS CEASED LIABILITY APPEARS TO BE JUSTIFIED , HENCE THE SAME IS CONFIRMED. IT IS FURTHER NOTED THAT BY SURRENDERING THE AFORESAID SUM IN SUBSEQUENT YEAR THE APPELLANT HAS ALSO ADMITTED THA T THE LIABILITY IN QUESTION IS NOT GENUINE ONE, HOWEVER SUCH SURRENDER IN SUBSEQUENT YEAR JUST APPEARS AN AFTERTHOUGHT WHICH IS MUCH AFT ER THE DETECTION OF THIS BOGUS LIABILITY BY THE A.O., HENCE ON THIS GRO UND NO RELIEF CAN BE PROVIDED TO THE APPELLANT. ACCORDINGLY THE ADDITION MADE BY THE A.O. IS CONFIRMED. 2.4.3 ON A CAREFUL APPRECIATION OF THE FACTS AND CI RCUMSTANCES OF THE CASE, SUBMISSION PUT FORTH AND THE JUDICIAL PRONOUNCEMENT S CITED, AS DISCUSSED ABOVE, WE CONCUR WITH THE OBSERVATIONS OF THE LEARN ED CIT(A) THAT BEFORE THE AUTHORITIES BELOW, INSPITE OF BEING SPECIFICALL Y REQUIRED TO, THE ASSESSEE HAS NOT BEEN ABLE TO FURNISH ANY BASIC MATERIAL EVI DENCE TO ESTABLISH THAT THE ALLEGED FUEL PURCHASES WERE EVER MADE BY IT IN THE PAST. THE ASSESSEE ITSELF ACCEPTED THAT ` 8 LAKHS THEREOF COULD NOT BE RECONCILED BY IT. EVEN BILLS FOR PURCHASE THEREOF, CONFIRMATIONS FROM SO C ALLED CREDITORS IN RESPECT OF OUTSTANDING BALANCES WERE NEVER FURNISHED. THAT THE SAID AMOUNTS WERE OUTSTANDING LIABILITIES OF THE EARLIER YEARS IS ALS O NOT ESTABLISHED BY THE ASSESSEE. WE ALSO NOTE THAT THE AVERMENTS BY THE AS SESSEE THAT IT HAD WRITTEN BACK AND OFFERED THESE AMOUNTS OF ` 99 LAKHS FOR TAXATION IN THE A.Y. 2012-13, WAS FOUND TO BE FACTUALLY INCORRECT B Y THE AO AND THIS FACT WAS ADMITTED TO BE SO BY THE LEARNED A.R. IN PROCEE DINGS BEFORE US, I.E. THAT THESE AMOUNTS WERE NOT WRITTEN BACK/OFFERED TO TAX IN THE ASSESSEES RETURN OF INCOME FOR A.Y. 2012-13. IN THIS FACTUAL MATRIX OF THE CASE, WE AGREE WITH THE LEARNED CIT(A) THAT IT CAN BE CONCLU DED THAT THERE IS NO GENUINE OUTSTANDING LIABILITY ON ACCOUNT OF AVIATIO N FUEL AND THEREFORE NO LIKELIHOOD OF ANY AMOUNT BEING PAID ON THIS ACCOUNT IN THE FUTURE AND ITA NO. 7506/MUM/2014 M/S. UB AIR PVT. LTD. 8 FURTHER THAT THIS AMOUNT OF ` 99 LAKHS CLAIMED BY THE ASSESSEE IS A BOGUS LIABILITY. THE FACT THAT THE ASSESSEE HAS IN ITS SU BMISSIONS BEFORE THE LEARNED CIT(A) (SUPRA) STATED THAT IT HAS WRITTEN B ACK AND OFFERED TO TAX THE SO CALLED OUTSTANDING LIABILITIES OF ` 99 LAKHS IN A.Y. 2012-13, EVIDENCES THAT THE ASSESSEE ITSELF ADMITS THAT THE LIABILITY IN QUESTION IS NOT GENUINE AND WAS PUT FORTH ONLY AFTER THE DETECTION OF THESE BOGUS OUTSTANDING LIABILITIES OF ` 99 LAKHS BY THE AO. IN THESE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE EXISTENCE OF TH E STATED OUTSTANDING LIABILITY ON ACCOUNT OF AVIATION FUEL IS FOUND TO B E BOGUS, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION IS TO BE UPHELD O N ACCOUNT OF THE SAID BOGUS LIABILITY OF ` 99 LAKHS REMAINING UNPROVED. WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, THE GROUNDS RAISED BY TH E ASSESSEE ARE DISMISSED. 3. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2010- 11 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH NOVEMBER, 2016. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 25 TH NOVEMBER, 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -9, MUMBAI 4. THE CIT - 5, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.