Sushila Devi Bagla, Kolkata V. DCIT- Central Circle-VII, Kolkata, Kolkata

ITSSA 91/KOL/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3088 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 11-01-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 23-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NILIMA JOSHI FCA SHRI SALLON
• Assessee Lawyers: T VARKE JUDICIAL MEMBER
• Keywords: Corroborative evidences
• Section: 143(3); 153A; 234B; 133(6); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI ABY.T VARKE, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO.2389/KOL/2013 & IT(SS)A NO.91/KOL/2013 ASSESSMENT YEAR :2004-05 SUSHILA DEVI BAGLA PROPRIETRESS, M/S R.K. TIMBER & CO. 67/17, STRAND ROAD, KOLKATA-700 006 [ PAN NO.AEKPB 0793 D ] SUSHILA DEVI BAGLA CD-315, SECTOR-I, SALT LAKE CITY, KOLKATA-64 V/S . V/S . DCIT, CENTRAL CIRCLE-VII, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-107 DCIT, CENTRAL CIRCLE-VII, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-107 /APPELLANT .. / RESPONDENT /BY ASSESSEE SMT. NILIMA JOSHI, FCA /BY REVENUE SHRI SALLONG YODEN, ACIT-SR-DR /DATE OF HEARING 12-01-2017 ! /DATE OF PRONOUNCEMENT 08-02-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEAL FILED BY THE SAME ASSESSEE ARE DIRECTE D AGAINST DIFFERENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-I, K OLKATA DATED 22.07.2013 & 23.07.2013. DIFFERENT ASSESSMENTS WERE FRAMED BY DCIT, CENTRAL CIRCLE-VII ITA NO.2389 & IT(SS)A 91/KOL/2013 A.Y. 2004-0 5 SUSHILA DEVI BAGLA VS. DCIT, CC-VII, KOL. PAGE 2 KOLKATA U/S 143(3)/251/154/254/153A OF THE INCOME T AX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ERS DATED 13.12.2010 & 31.12.2010 FOR ASSESSMENT YEAR 2004-05. SMT. NILIMA JOSHI, LD. AUTHORIZED REPRESENTATIVE AP PEARED ON BEHALF OF ASSESSEE AND SHRI SALLONG YODEN, LD. SENIOR DEPARTM ENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE. FIRST WE TAKE UP ITA NO. 2389/KOL/2013 . 2. FACTS IN BRIEF ARE THAT ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND ENGAGED IN BUSINESS OF TIMBER UNDER ITS PROPRIETARY CONCERN M/S R.K. TIMBER & CO. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION FILED HER RETURN OF INCOME DATED 27.10.2004 SHOWING TOTAL INCOME OF 39,300/- AND SUBSEQUENTLY CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS C OMPLETED U/S 143(3) OF THE ACT AT A TOTAL OF 50,52,750/- VIDE ORDER DATED 29.12.2006 AFTER MAKIN G CERTAIN ADDITIONS / DISALLOWANCES TO THE TOTAL INCO ME OF ASSESSEE. 3. IT WAS OBSERVED AT THE TIME OF HEARING THAT GRO UND NO.1 TO 7 IS INTER- CONNECTED. THEREFORE, THEY ARE CLUBBED TOGETHER TO PASS A CONSOLIDATE ORDER FOR THE SAKE OF CONVENIENT. THE ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAI NING THE DISALLOWANCE OF 36,11,230/- U/S 41(1) OF THE ACT ON ACCOUNT OF SEI ZURE OF CURRENT LIABILITY. IN THE ORIGINAL ASSESSMENT, AO IN HIS ORDER VIDE DA TED 29.12.206 HELD THAT THE TRADING LIABILITY OF 45,66,426.21 HAS CEASED TO EXIST. THEREFORE, AO TRE ATED THE SAME AS INCOME OF ASSESSEE UNDER THE PROVISION OF SEC. 41(1) OF THE ACT. THE MATTER WAS CARRIED BEFORE LD. CIT(A) WHO CONFIR MED THE ORDER OF ASSESSING OFFICER AFTER GIVING RELIEF IN PART. 4. THEREAFTER THE APPEAL WAS FILED BY ASSESSEE BEFO RE TRIBUNAL WHERE THE MATTER WAS RESTORED BACK TO THE FILE OF AO FOR FRES H ADJUDICATION. IN THE SECOND PROCEEDINGS OF ASSESSMENT IN PURSUANCE OF TRIBUNAL S DIRECTION, ASSESSEE BEFORE AO SUBMITTED THE BREAKUP OF TRADING LIABILIT Y ALONG WITH YEAR OF PAYMENT AS DETAILED BELOW:- ITA NO.2389 & IT(SS)A 91/KOL/2013 A.Y. 2004-0 5 SUSHILA DEVI BAGLA VS. DCIT, CC-VII, KOL. PAGE 3 A) PAID IN AY 2004-05 RS.19,39,239.60 B) PAID IN AY 2005-06 RS.18,92,793.26 C) PAID IN AY 2006-07 RS. 7,34,393.43 RS.45,66,426.29 AS PER THE ASSESSEE, LIABILITY OF 45,66,425/- WAS REFLECTING AS ON 31.03.2003 IN THE BALANCE-SHEET. A PART OF SUCH LIABILITY WAS PAID IN THE YEAR UNDER CONSIDERATION FOR 19,39,239.60 AND THE BALANCE WAS REFLECTING IN THE BALANCE- SHEET AS ON 31.03.2004. DURING THE YEAR, THE LIABIL ITY OF 1,86,236/- WAS PAID THROUGH ACCOUNT PAYEE CHEQUE. THEREFORE, THE LIABIL ITY OF 17,53,003/- (1939239.60 1,86,236) AT THE MOST CAN ATTRACT THE PROVISIONS OF SEC. 41(1) OF THE ACT. THE BALANCE TRADING LIABILITY WAS CONTINUE D TO BE SHOWN FOR 26,27,186.69 (45,66,425- 19,39,239.60) IN THE BALAN CE-SHEET AS ON 31.03.2004. AS SUCH, THE LIABILITY FOR THE AMOUNT O F 26,27,186/- HAS NOT CEASED TO EXIST IN THE BOOKS OF ACCOUNT. THEREFORE, THE QUESTION FOR MAKING THE ADDITION U/S 41(1) OF THE ACT DOES NOT ARISE. 5. ASSESSEE FURTHER SUBMITTED THAT CHEQUES WERE ISS UED TO SPECIFIC PARTIES WHICH THEY GOT EN-CASHED FROM THE BANK BY PUTTING T HEIR STAMP AND SIGNATURES ON THE REVERSE SIDE OF THE SAID CHEQUE. THEREFORE, THE ALLEGATION OF AO THAT ASSESSEE HERSELF HAS DRAWN THE MONEY FROM THE BANK IN THE NAME OF SUCH CREDITORS ARE NOT TENABLE. THERE IS ALSO NO REPORT FROM THE BANK THE SUGGESTING THAT ASSESSEE HERSELF HAS WITHDRAWN THE MONEY FROM THE BANK. FURTHER, ASSESSEE SUBMITTED THAT OUT OF TOTAL TRADING LIABIL ITY OF 45,46,425/- AND PAYMENT OF 9,55,194.98 WAS ISSUED THROUGH ACCOUNT PAYEE CHEQUE ONLY. THEREFORE, THE DISALLOWANCE OF THE ENTIRE AMOUNT MA DE BY AO IS WITHOUT THE APPLICATION OF HIS MIND. HOWEVER, AO DISREGARDED TH E PLEA OF ASSESSEE BY OBSERVING AS UNDER:- I) THE CHEQUES WERE ISSUED TO THE PARTIES BASED IN NORTH-EASTERN REGION AND HOW CAN THEY EN-CASH THE CHEQUE IN KOLKATA IN O NE OR TWO DAYS FROM THE DATE OF ISSUING CHEQUE. II) THE PARTIES TO WHOM THE CHEQUE PAYMENT WAS MADE ARE NON-EXISTENT AT THE ADDRESS GIVEN BY ASSESSEE AND LETTER ISSUED TO THE PARTIES FOR CONFIRMATION WAS RETURNED UNSERVED. ITA NO.2389 & IT(SS)A 91/KOL/2013 A.Y. 2004-0 5 SUSHILA DEVI BAGLA VS. DCIT, CC-VII, KOL. PAGE 4 III) ASSESSEE HAS SHOWN THE PAYMENT THROUGH BEARER CHEQUE FAILED TO FURNISH THE EVIDENCE IN SUPPORT HER CLAIM THAT THE PAYMENT WAS MADE TO THOSE PARTIES. IV) IT IS NOT DISPUTED THAT THE AFORESAID AMOUNT RE PRESENTS THE TRADING LIABILITY AND REFLECTING IN BALANCE-SHEET SINCE AYS 1996-97. IN VIEW OF ABOVE, AO OPINED THAT ASSESSEE HERSELF H AS WITHDRAWN THE CASH FROM BANK AND LIABILITY HAS CEASED TO EXIST IN ASSE SSEES BOOK. ACCORDINGLY, AO INVOKED THE PROVISION OF SEC. 41(1) OF THE ACT A ND ADDED THE AMOUNT OF 45,66,425/- TO THE TOTAL INCOME OF ASSESSEE. 6. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHEREAS AS SUBMITTED THAT BANK OFFICERS IN THEIR REPLY HAS NOW HERE MENTION THAT THE BEARER CHEQUE ISSUED TO THE PARTIES WERE USED BY ASSESSEE HERSELF AS CASH WITHDRAWN FROM THE BANK. THE ASSESSEE ALSO SUBMITTE D THAT A SUM OF 9,55,195/- WAS PAID TO THE PARTIES THROUGH ACCOUNT PAYEE DRAFTS AND IN THIS REGARD NECESSARY DETAILS WERE FURNISHED BEFORE AO. THE ASSESSEE ALSO SUBMITTED THAT THE CREDITORS FOR 26,27,186/- WERE REFLECTING IN THE BALANCE- SHEET OF THE RELEVANT ASSESSMENT YEAR. THEREFORE, T HE SAME CANNOT BE HELD AS CEASED TO EXIST. THE PAYMENT TO THESE CREDITORS WAS PAID IN SUBSEQUENT YEARS ALSO. AFTER CONSIDERING THE SUBMISSION OF ASSESSEE, LD. CIT(A) GRANTED PARTLY RELIEF TO ASSESSEE BY OBSERVING AS UNDER:- 8. I HAVE PERUSED THE RELEVANT ORDERS AND THE MATE RIAL ON RECORD. I HAVE ALSO CONSIDERED THE RIVAL SUBMISSIONS. IT IS AN ADM ITTED FACT THAT SUNDRY CREDITORS OF RS.45.66,425/- ARE VERY OLD AND EVEN P ERTAIN TO THE PERIOD PRIOR TO THE YEAR 1996. THE AO HAS MENTIONED IN THE ASSESSMENT ORDER THAT THE CREDITORS WERE NOT FOUND AT THE GIVEN ADDR ESSES AS THE NOTICES U/S 133(6) COULD NOT BE SERVED ON THEM. IT WAS ARGU ED ON BEHALF OF THE APPELLANT THAT THE CREDITORS HAD POSSIBLY CLOSED TH EIR BUSINESS; AND CONSEQUENTLY, THE RETURNED UN-SERVED. BUT THEN, IT IS PERTINENT TO NOTE AT THIS STAGE THAT THE ASSESSEE FAILED TO PROVIDE THE CURRENT ADDRESSES OF THE CREDITORS TO THE AO. IT APPEARS THAT THE ASSESS EE 'WAS NOT EVEN AWARE OF THE CURRENT ADDRESSES. IT IS ALSO NOTED TH AT NO CONFIRMATION FROM THE CREDITORS WAS FILED BY THE ASSESSEE. WHEN THE ASSESSEE WAS CONFRONTED WITH THE FACT THAT THE NOTICES U/S 133(6 ) WERE NOT SERVED ON THE CREDITORS AT THE GIVEN ADDRESSES, THE ONUS WAS ON THE ASSESSEE TO BRING POSITIVE MATERIAL ON RECORD TO SHOW THAT THE CREDITORS WERE ACTUALLY IN EXISTENCE. THE ASSESSEE HAS ADMITTED THAT PAYMEN TS TO THE EXTENT OF ITA NO.2389 & IT(SS)A 91/KOL/2013 A.Y. 2004-0 5 SUSHILA DEVI BAGLA VS. DCIT, CC-VII, KOL. PAGE 5 RS.36,11,230/- WERE MADE BY BEARER CHEQUES. BUT, TH E ASSESSEE HAS FAILED TO EXPLAIN BEFORE THE AO OR EVEN BEFORE ME A S TO WHY THE PAYMENTS TO THE CREDITORS WERE MADE BY BEARER CHEQU ES (WHICH IS ALSO IN CONTRAVENTION OF THE PROVISIONS OF SECTION 40A(3 ) OF THE ACT). IT IS A MATTER OF FACT THAT THE BEARER CHEQUES WERE ENCASHE D ACROSS THE COUNTER AT KOLKATA. I FIND MERIT IN THE ARGUMENT OF THE AO THAT THE CREDITORS SITUATED AT REMOTE PLACES OF THE NORTH-EA STERN STATES COULD NOT ENCASH THE CHEQUES ON THE SAME DAY OR WITHIN 1 OR 2 DAYS FROM THE DATE OF THE ISSUE. THE ASSESSEE HAS ALSO FAILED TO PRODUCE SUPPORTING EVIDENCE TO PROVE THAT THE PAYMENTS MADE THROUGH T HE BEARER CHEQUES ACTUALLY REACHED THE CREDITORS. IN THIS FACTUAL BAC KGROUND, I FIND MERIT IN THE FINDING OF THE AO THAT THE ASSESSEE HAD FAILED TO ESTABLISH THAT THE CREDITORS WERE ACTUALLY IN EXISTENCE. THE AO WAS JU STIFIED IN CONCLUDING THAT THE LIABILITY TO THE EXTENT OF RS.36,11,230/- HAD CEASED TO EXIST; AND CONSEQUENTLY, THE PROVISIONS OF SECTION 41(1) WERE ATTRACTED. HOWEVER, I AM NOT IMPRESSED WITH THE ADDITION OF SUNDRY CREDIT ORS OF RS.9,55,195/- WHERE THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE DRAFTS. I FIND FROM THE ASSESSMENT ORDERS OF THE AO THAT THE ASSES SEE HAS CONSISTENTLY CLAIMED TO HAVE MADE PAYMENTS OF RS.9, 55,195/- BY ACCOUNT PAYEE DRAFTS. FOR, SHE HAD SUBMITTED IN COU RSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS THAT PAYMENT OF RS.41,415/- TO MAHAVEER TRADERS AND RS.1,44,821/- TO MAHAVEER TIMBERS DURIN G THE RELEVANT YEAR WAS MADE BY ACCOUNT PAYEE DRAFT; AND FURTHER, THAT PAYMENT OF RS.3,17,902/- TO M/S P BOCHA AND RS.4,51,056/- TO M /S RAIESH TIMBER WAS ALSO MADE IN THE SUBSEQUENT YEAR BY ACCOUNT PAY EE DRAFT (COPY OF THE DRAFTS WAS ENCLOSED). THESE FACTS HAVE BEEN ACK NOWLEDGED BY THE AO AT PAGE 7 OF HIS ORIGINAL ASSESSMENT ORDER. AGAI N, THE SUBMISSION WAS REITERATED IN COURSE OF THE SUBSEQUENT ASSESSME NT PROCEEDINGS AND ALL THE RELEVANT DETAILS WERE ALSO PRODUCED WHI CH HAS BEEN ACKNOWLEDGED BY THE AO AT PAGE 3 OF HIS RE- ASSESSM ENT ORDER. BUT, THE CONTENTION OF THE ASSESSEE HAS NEITHER BEEN DIS PUTED NOR DISPROVED BY THE AO. IN FACT, THE AO HAS SIMPLY IGNORED THE S UBMISSIONS OF THE ASSESSEE. IN COURSE OF THE APPELLATE PROCEEDINGS, T HE LD AR REITERATED THAT PAYMENTS TOTALLING TO RS.9,55,195/- WERE MADE TO THE CREDITORS BY ACCOUNT PAYEE DRAFTS. THE RELEVANT DETAIL OF DRAFTS WAS SUBMITTED AT PAGE 108; AND, THE COPY OF DRAFTS WAS PLACED AT PAGES 109 TO 114 OF THE PAPER- BOOK . IT WAS CONTENDED THAT THE RELEVANT MATERIAL PRODU CED BEFORE THE AO WAS NEITHER CONSIDERED NOR DISCUSSED BY HIM IN HIS ASSESSMENT ORDER. MY LEARNED PREDECESSOR VIDE HIS L ETTER DATED 18-01- 2012 SENT COPY OF THE PAPER- BOOK TO THE AO AND DIR ECTED HIM TO VERIFY THE CONTENTIONS OF THE ASSESSEE. AS NO REPORT WAS R ECEIVED FROM THE AO, A REMINDER WAS ISSUED ON 21-06-2013. THE AO HAS EVENTUALLY SUBMITTED HIS REMAND REPORT ON 12-07-2013 WHEREIN H E HAS SIMPLY STATED THAT THE ISSUE HAS BEEN DISCUSSED AT PAGES 3 . 4 AND 5 OF THE ASSESSMENT ORDER. I HAVE PERUSED THE ASSESSMENT ORD ER. I FIND THAT THE AO HAS NEITHER DISPUTED NOR DISPROVED THE CLAIM OF THE ASSESSEE THAT ITA NO.2389 & IT(SS)A 91/KOL/2013 A.Y. 2004-0 5 SUSHILA DEVI BAGLA VS. DCIT, CC-VII, KOL. PAGE 6 PAYMENTS TOTALING TO RS.9,55,195/- WERE MADE TO THE CREDITORS BY ACCOUNT PAYEE DRAFTS THOUGH RELEVANT DETAIL WAS AVA ILABLE BEFORE HIM. EVEN IN COURSE OF THE REMAND PROCEEDINGS, THE AO HA S FAILED TO BRING POSITIVE MATERIAL ON RECORD TO REBUT THE CLAIM OF T HE ASSESSEE. IN THIS FACTUAL BACKGROUND, I AM OF THE CONSIDERED VIEW THA T SECTION 41(L) CANNOT BE PRESSED INTO OPERATION IN SO FAR AS THE S UNDRY CREDITORS OF RS.9,55,195/- ARE CONCERNED. IN VIEW OF THE ABOVE, THE ADDITION U/S 41 (1) IS RESTRICTED TO RS.36,11,230/-. THE GROUNDS RA ISED IN THIS REGARD ARE PARTLY ALLOWED. GROUND NO 10 AND 11 RELATE TO CHAR GING OF INTEREST U/S 234B AND 220(2) WHICH ARE CONSEQUENTIAL IN NATURE. AGGRIEVED BY THIS, ASSESSEE HAS COME UP IN APPEAL B EFORE US ON THE FOLLOWING GROUNDS. 7. BEFORE US LD. AR FILED PAPER BOOK WHICH IS RUNNI NG PAGES 1 TO 164 AND REITERATED SUBMISSION AS MADE BEFORE LD. CIT(A). HE DREW OUR ATTENTION ON PAGE 123 OF THE PAPER BOOK AND DEMONSTRATED THAT TH E TRADING LIABILITY OF 26,27,186/- IS STILL REFLECTING IN THE BALANCE-SHEE T FOR THE YEAR UNDER CONSIDERATION. ON THE OTHER HAND, LD. DR SUBMITTED THAT NOTICE U/S 133(6) OF THE ACT WAS ISSUED RETURNED BACK FROM THE PARTIES AS UN-SERVED. HE FURTHER SUBMITTED THAT THE BEARER CHEQUES WERE ISSUED TO PARTIES WHICH ARE BASED IN NORTH-EASTERN REGION AND IT IS NOT POSSIBLE FOR ALL OF THEM TO EN -CASH THE SAME WITHIN ONE OR TWO DAYS FROM THE DATE OF ISSUANCE OF CHEQUE. LD. D R WAS OF THE VIEW THAT THE LIABILITY HAS CEASED TO EXIST AND THEREFORE LIABILI TY TO BE TAXED U/S. 41(1) OF THE ACT AND HE VEHEMENTLY RELIED ON THE ORDER OF AUTHOR ITIES BELOW. 8. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING D ISCUSSION, WE FIND THAT LIABILITY WAS REFLECTING IN THE BOOKS OF ACCOUNT OF ASSESSEE WHICH WERE NOT CONFIRMED BY THE AO U/S 133(6) OF THE ACT. THEREFOR E, AO OPINED THAT THE CURRENT LIABILITY HAS CEASED TO EXIST AND LIABLE FO R TAX U/S 41(1) OF THE ACT. THE VIEW TAKEN BY AO WAS SUBSEQUENTLY CONFIRMED BY LD. CIT(A) AFTER GIVING PARTLY RELIEF TO ASSESSEE. NOW THE ISSUE BEFORE US ARISES WHETHER THE LIABILITY OF ASSESSEE HAS CEASED TO EXIST IN THE BOOKS OF ACCOUN T IN THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THIS JUNCTURE, IT IS IMPORTANT TO PRODUCE THE PROVISION OF SEC. 41(1) OF THE ACT. ITA NO.2389 & IT(SS)A 91/KOL/2013 A.Y. 2004-0 5 SUSHILA DEVI BAGLA VS. DCIT, CC-VII, KOL. PAGE 7 (1) WHERE AN ALLOWANCE OR DEDUCTION HAS BEEN MADE I N THE ASSESSMENT FOR ANY YEAR IN RESPECT OF LOSS, EXPENDITURE OR TRA DING LIABILITY INCURRED BY THE ASSESSEE (HEREINAFTER REFERRED TO AS THE FIRST- MENTIONED PERSON) AND SUBSEQUENTLY DURING ANY PREVIOUS YEAR,- (A) THE FIRST-MENTIONED PERSON HAS OBTAINED WHETHER IN CASH OR IN ANY OTHER MANNER WHATSOEVER, ANY AMOUNT IN RESPECT OF S UCH LOSS OR EXPENDITURE OR SOME BENEFIT IN RESPECT OF SUCH TRAD ING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF, THE AMOUNT OBTAINED BY SUCH PERSON OR THE VALUE OF BENEFIT ACCRUING TO HIM SHALL BE DEEME D TO BE PROFITS AND GAINS OF BUSINESS OR PROFESSION AND ACCORDINGLY CHA RGEABLE TO INCOME- TAX AS THE INCOME OF THAT PREVIOUS YEAR, WHETHER TH E BUSINESS OR PROFESSION IN RESPECT OF WHICH THE ALLOWANCE OR DED UCTION HAS BEEN MADE IS IN EXISTENCE IN THAT YEAR OR NOT; FROM A PLAIN READING OF ABOVE PROVISION, WE FIND TH AT SEC. 41(1) OF THE ACT CAN BE INVOKED WHERE THE LIABILITY CEASE TO EXIST IN TH E BOOKS OF ACCOUNT. IN THE INSTANT CASE, ADMITTEDLY THE TRADING LIABILITY AS S HOWN BY ASSESSEE IS VERY OLD WHICH HAS BEEN DULY ACCEPTED BY REVENUE IN ALL THE EARLIER YEARS. IN THE CASE ON HAND, THE LIABILITY HAS BEEN SHOWN IN THE BALANC E-SHEET FOR 26,27,186/-. MERELY THE NOTICES ISSUED UNDER SECTION 133(6) OF T HE ACT TO THE PARTIES RETURNED AS UN-SERVED CANNOT BE GROUND FOR THE ADDI TION UNDER SECTION 41(1) OF THE ACT AS THE LIABILITY HAS NOT CEASED TO EXIST . THEREFORE, IT CANNOT BE CONCLUDED THAT THE LIABILITY HAS CEASED TO EXIST. I T HAS NOT ACTUALLY BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNT OF ASSESSEE AND THE LD. DR HAS NOT BROUGHT ANYTHING ON RECORD SUGGESTING THAT THE TRADING LIAB ILITY HAS ACTUALLY BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNT. IN THE INSTANT CASE, THE AUTHORITIES BELOW HAS PRESUMED THAT THE TRADING LIABILITY CEASED TO E XIST AS THE NOTICE U/S 133(6) OF THE ACT ISSUED WERE NOT SERVED. AS SUCH ON EXAMI NATION OF ORDERS OF AUTHORITIES BELOW, WE FIND THAT THE LIABILITY HAS N OT BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNT OF ASSESSEE. IN OUR CONSIDERED VIEW, LIA BILITY CANNOT CEASE TO EXIST UNTIL AND UNLESS IT IS WRITTEN OFF IN THE BOOKS OF ACCOUNT OF ASSESSEE. IN THIS VIEW OF THE MATTER, WE HOLD THAT THE LIABILITY WHIC H HAS ACTUALLY BEEN WRITTEN OFF CAN ONLY BE TREATED AS INCOME OF ASSESSEE U/S 41(1) OF THE ACT. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE PARTLY ALLOW ASSESSEES GROUND. AO IS DIRECTED ACCORDINGLY. ITA NO.2389 & IT(SS)A 91/KOL/2013 A.Y. 2004-0 5 SUSHILA DEVI BAGLA VS. DCIT, CC-VII, KOL. PAGE 8 9. NEXT ISSUE RAISED BY ASSESSEE IN GROUND NO. 8 & 9 IN THIS APPEAL IS THAT LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE SA ME WAS CONSEQUENTIAL IN NATURE. 10. AT THE OUTSET, WE FIND THAT THE LEVY OF INTERES T U/S 234B IS CONSEQUENTIAL. THEREFORE, GROUNDS NO. 8 & 9 ARE LIABLE TO BE DISMI SSED AND IS ACCORDINGLY DISMISSED. 11. IN THE RESULT, ASSESSEES APPEAL PARTLY ALLOWED . COMING TO IT(SS)A NO.91/KOL/2013 FOR A.Y 04-05 . 12. GROUND NO. 1 TO 4 HAVE CHALLENGED THE ASSESSMEN T PROCEEDINGS U/S 153A OF THE ACT. 13. AT THE OUTSET, IT WAS NOTICED THAT ASSESSING OF FICER HAS MADE THE ADDITION IN HIS ASSESSMENT ORDER U/S. 153A/143(3) O F THE ACT ON THE BASIS OF INFORMATION WHICH WAS AVAILABLE IN THE ORIGINAL ASS ESSMENT ORDER. IN FACT THE ISSUE RAISED IN THE ASSESSMENT FRAMED UNDER SECTION 153A IS THE SAME ISSUE AS ARISING IN THE ASSESSMENT FRAMED UNDER SECTION 1 43(3) OF THE ACT. THE ORIGINAL ASSESSMENT WAS COMPLETED DATED 13.12.2010 AND SEARCH WAS CONDUCTED AT THE PREMISES OF ASSESSEE ON 13.12.2009 . WE HAVE ALREADY ADJUDICATED THE ISSUE ARISING OUT OF THE ORIGINAL A SSESSMENT PROCEEDINGS IN TERMS OF PARAGRAPH NO. 8 OF THIS ORDER. IN OUR CONS IDERED VIEW THE ADDITION FOR THE SAME ISSUE CANNOT BE MADE TWO TIMES IN SECTION 153A AND 143(3) OF THE ACT. THEREFORE, THE ADDITION U/S 153A IS NOT SUSTAI NABLE FOR THE SAME ISSUE. HENCE THE APPEAL OF ASSESSEE IS ALLOWED IN TERMS OF THE PARAGRAPH NO. 8 OF THIS ORDER. 11. IN THE RESULT, BOTH APPEAL OF ASSESSEE STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 08/ 02/2017 SD/- SD/- (ABY. T. VARKE) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP '#$- 08 / 02 /201 7 ITA NO.2389 & IT(SS)A 91/KOL/2013 A.Y. 2004-0 5 SUSHILA DEVI BAGLA VS. DCIT, CC-VII, KOL. PAGE 9 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-SUSHILA DEVI BAGLA, PROPRIETRESS, M/S R.K .TIMBER & CO. 67/17, STRAND ROAD, KOLKATA-96/C D-315, SECTOR-I, SALT LAKE CITY, KOLKATA-64 2. /REVENUE-DCIT, CC-VII, AAYAKAR BHAWAN, POORVA, 110, SHANTI PALLY, KOL-107 3.#,#-. / / CONCERNED CIT KOLKATA 4. /- / CIT (A) KOLKATA 5.2 3455-., -.!, / DR, ITAT, KOLKATA 6.489:; / GUARD FILE. BY ORDER/ , /TRUE COPY/ /# -.!,