KITPLY INDUSTRIES LTD,KOLKATA vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-TINSUKIA, TINSUKIA

The assessee’s sole substantive grievance canvassed in the instant appeal seeks to reverse both the lower authorities’ adding of sundry creditors amount of ₹20,32,83,000/- in the course of assessment as upheld in the lower appellate proceedings. The CIT(A)’s detailed discussion to this effect reads as under:- Kitply Industries Ltd. Vs. DCIT, Cir-Tinsukia Page 2 “4.2 In the written submission dated 21.10.2016, it was stated assessee furnished details like names, addresses, alongwith confirmations in respect of sundry creditors. On perusal of copy of submission made before the AO, it is seen that in most of the cases, addresses and PAN of purported creditors were not furnished. In the written submission dated 15.03.2018 filed before me, it was stated that provision of section 41(1) could not be applied in case of assessee. Confirmations were filed in very few numbers of cases. It was mentioned that balance of sundry creditors as on 01.04.2011 was Rs.28,75,49,621/- and that as on 31.03.2012 was Rs.33,82,59,294/-. The rest of debts were expenses payable like statutory dues, miscellaneous liabilities, bank overdrafts, advances against sales etc. It was argued that since liabilities were not written back by assessee, the same cannot be added to income of u/s.41(1) of the Act.

3 I have carefully considered the mater. If assessee claims that certain sums of money were payable to creditors, it is its duty to provide details of such creditors. First, assessee has to provide the names, PAN and addresses of such creditors. The years and circumstances as to how the creditors arose are to be furnished to the AO. Details of transactions with the parties should also be given. In case of present assessee, only the names of purported creditor were given PAN and addressee were not available in most of the cases. Confirmations could be filed only in very few cases. Assessee had not given details of the years and transactions that had given rise to claims of liabilities. When the accountant of assessee was asked regarding the above-mentioned details, vide order sheet noting dated 13.03.2018, it was admitted that full details were no longer available as assessee company had been sick for last several years. He stated that if addition is confirmed, the resultant income may be set off against brought forward loss of earlier years. From the admission of assessee, it is certain that full details of creditors / liabilities payable are not available with assessee. As stated earlier, this appeal was filed on 223.04.2015. Even after elapse of over three years, assessee, who is in appeal, has failed to file facts and arguments justifying the grounds taken in its appeal. Considering the facts, there is no option but to dismiss appeal of assessee. In respect of assessee’s plea that brought forward loss should be adjusted with income assessed, the AO is directed to verify the factual position and allow whatever assessed income can be set off against brought forward loss/depreciation per law. Appeal is dismissed.”

Mr. Modi vehemently contends during the course of hearing that both the lower authorities have erred in law and on facts in making the impugned addition regarding the assessee sundry creditors sum in issue of ₹20.32 crores involving almost 200 parties. His further case is that the learned authorities have accepted the corresponding sales. They have neither disallowed purchases nor they have rejected the corresponding books of account. Learned counsel also quotes various judicial precedents in support of all these pleas. The Revenue has chosen to draw strong support from the CIT(A)’s foregoing detailed discussion.

After giving our thoughtful consideration to the foregoing rival detailed arguments, we are of the view that the sole issue raised herein deserves to be restored back to the Assessing Officer for the reason as that neither during the course of assessment nor in lower appellate proceedings, any of the said parties 200 parties had been called or produced on for factual verification. We therefore restore assessee’s grievance back to the file of Assessing Officer for afresh adjudication as per law within three effective opportunities of hearing. The assessee is directed to appear before the Assessing Officer on or before 30.04.2020 along with copy of this remand order. We make it clear that the assessee shall be entitled to raise all factual and legal arguments in consequential proceedings.

This assessee’s appeal is allowed for statistical purposes in above terms. Order pronounced in the open court 13/12/2019 (A.L.Saini) (S.S.Godara) (Accountant Member) Judicial Member) Kolkata, *Dkp "दनांकः- 13/12/2019 कोलकाता/। आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-Kitply Industries Ltd., White House, 4th Floor, A-Block, 119, Park Street, Kolkata-16

""यथ" /Respondent-DCIT, Cir-Tinsukia-786125 3. संबं*धत आयकर आयु-त / Concerned CIT Guahati 4. आयकर आयु-त- अपील / CIT (A) Guahati 5. 0वभागीय "3त3न*ध, आयकर अपील"य अ*धकरण, / DR, ITAT, Guahati 6. गाड7 फाइल / Guard file. By order/आदेश से, // Sr. Private Secretary, Head of Office/DDO आयकर अपील"य अ*धकरण, गूवाहाठ" ।