SARJAN SYNTHETICS P LTD.,SURAT V. DY. COMMISSIONER OF INCOME TAX, CIRCLE 2 (1)(1), SURAT

ITA 599/SRT/2024

AI Insights

The case involves Sarjan Synthetics P. Ltd., the appellant, contesting an order from the Commissioner of Income Tax (Appeals) which confirmed an addition of Rs.15,71,698 under section 41(1) of the Income Tax Act. This addition was initially made by the Assessing Officer, who considered the liabilities as ceased since no evidence of payment or TDS deduction was provided. The Tribunal found that the matter required further verification of the discharge of these liabilities in subsequent assessment years and thus remanded the case back to the Assessing Officer.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470573 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 17-10-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 21-05-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: SURESH K. KABRA
• Keywords: TDS

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT (SMC) BENCH BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 599/SRT/2024 for AY: 2015-16 (Physical hearing) Sarjan Synthetics P. Ltd., S501, Trade Centre, Ring Road, Behind Ashoka Tower, Surat - 395002 PAN : AARCS2392F Vs The DCIT, Ward – 2(1)(1), Surat APPELLANT RESPONDEDNT Appellant by Shri Suresh K. Kabra, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Institution 21/05/2024 Date of hearing 17/10/2024 Date of pronouncement 17/10/2024 Order under Section 254(1) of Income tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi dated 29.03.2024 for Assessment Year (AY) 2015-16. The assessee has raised following grounds of appeal: “1. The Ld. CIT(A) has erred and was not just and proper on the facts of the case and in confirming the addition of Rs.15,71,698/- u/s 41(1) by passing a ex parte order. 2. PRAYER 2.1 The addition may kindly be deleted. 2.2 Personal hearing may be granted. 2.3 Any other relief that your honours may deem fit may be granted. 3. The assessee craves leave to add, amend, modify alter or delete any of the grounds at the time of hearing.” 2. Rival submissions of both the parties and perused the record. The learned Authorized Representative (ld. AR) of the assessee submits that ld. CIT(A) has passed the ex parte order in confirming the addition made by Assessing Officer under section 41(1) of Income Tax Act (Act). The ld. AR of the ITA No.599/SRT/2024/AY.2015-16 Sarjan Synthetics P. Ltd. 2 assessee further submits that Assessing Officer also made addition by disregarding the submission made by assessee. The assessee before Assessing Officer explained about the outstanding liability which represents the salary of director, commission and payment on account of service contract. The assessee submitted that such liability was discharged in subsequent assessment year. The ld. AR submits that he has filed the ledger account to substantiate the fact that such liability was discharged and matter may be restored back to the file of Assessing Officer for verification of fact. The assessee undertakes to be produced all such evidence before Assessing Officer. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of lower authorities. The ld. Sr. DR submits that assessee failed to produce any evidence against such discharge of liability, no TDS was deducted and no evidence about payment in subsequent year was produced. Out of which substantial part relates to salary of ex-director. Thus, there was no longer liability as such liability has ceased to exist, the Assessing Officer was justified in making such addition. 4. In short rejoinder, the ld. AR of the assessee submits that Assessing Officer may be directed to verify the discharge of such liability and to allow relief to the assessee. 5. I have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. I find that Assessing Officer made disallowance of outstanding liability on account of salary of ex- director of Rs.11,48,452/- and payment against Kamlesh Kanani and Moti ITA No.599/SRT/2024/AY.2015-16 Sarjan Synthetics P. Ltd. 3 Consultant, all aggregating to Rs.15,71,698/-. The Assessing Officer held that assessee failed to produce that outstanding amount was due. The Assessing Officer also made addition on alternative basis on account of non- deduction of TDS. The ld. CIT(A) also upheld the addition for the want of submission. Before me, the assessee reiterated the similar submission that assessee has discharged liability and furnished ledger account as on 31.03.2018, showing certain payment against such discharge of liability. Considering the fact that such fact required verification, therefore, the matter is remanded to the file of Assessing Officer for verification of fact if the assessee has discharged its liability in subsequent assessment years, if such discharge, the assessee may be allowed relief to that extent. For statistical purposes, the appeal of the assessee is allowed. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 17/10/2024 in the open court. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 17/10/2024 SAMANTA Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR 6. Guard File By order // TRUE COPY // Assistant Registrar/Sr.PS/PS, ITAT, Surat "