CIT vs. HIVE COMMUNICATION PVT LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . 28.04.2011 . Present: Ms. Sanjee Sabharwal, Advocate for the appellant. Mr. Satyen Sethi with Mr. A.T. Panda, Advocates for the respondent. . + ITA No. 678/2011 . The Assessing Officer, while carrying out the assessment observed that certain creditors were shown in the books of accounts which were static creditors for more than three years. He, accordingly, asked the assessee to furnish documentary evidence to prove that the amount shown in those accounts was still payable by the assessee. In his opinion, the assessee could not furnish satisfactory evidence and, therefore, he made addition in the sum of `26,93,599/- representing some of these creditors. The CIT(A) confirmed this order. The ITAT has, however, deleted the additions after arriving at the finding of fact that all these accounts were running accounts and even payments have been made in some of these accounts in frequent years. Each account is discussed from paras 2.5 to 2.9. However, learned counsel for the appellant has referred to the following observations made by the Tribunal, same are as follows:- . ?2.10 On considering these facts, it is felt that the inquiry should have been made in the case of Music Broadcast Pvt. Ltd. and 134 U Multimedia International Ltd. to ascertain whether the amounts credited were in respect of any services actually received. That has not been done. It is not the case made out by any of the lower authorities that the expenditure claimed in this year was not actually incurred. Further, it is seen that no amount has been written off to the credit of Profit and Loss Account in this year. ?? . On this basis, it is contended that once the ITAT itself observed that the Assessing Officer had not undertaken the exercise to find out that the service of the aforesaid creditors were actually rendered or not, the ITAT should have remitted the case back to the Assessing Officer in respect of those creditors for undertaking proper inquiry which has not been done. Issue notice limited to the aforesaid issue. Mr. Satyen Sethi, Advocate enters in appearance and accepts notice on behalf of the respondent. A copy of paper book has been supplied to learned counsel for the respondent today in the Court. Having regard to the fact that the issue is in narrow compass and would not take much time, we are fixing the matter for disposal on 16th May, 2011. . A.K. SIKRI, J. . . . M.L. MEHTA, J. APRIL 28, 2011 AK . . . 8 #