SWAPN KUMAR SARKAR PROP. M/S TARUN TOOLS,,JAMSHEDPUR vs. ACIT CIR-3, JAMSHEDPUR

आदेश /O R D E R PER BENCH:- This assessee’s appeal for assessment year 2013-14 arises against the Commissioner of Income Tax (Appeals)-Jamshedpur’s order dated 18.10.2016 passed in case No.136/JSR/2015-16,involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused

ITA No.05/Ran/2017 A.Y. 2013-14 Sh Swapan Kr. Sarkar Vs. ACIT Cir-3,JSR Page 2 invoked cessation of liability addition u/s 41(1) of the Act regarding the sum of Rs.65.50 lac claimed as sundry creditors liability in books of account since 2009-10. Then is no dispute between the parties the very amount stood allowed as a liability in the past very many assessment years involving both summary as well as regular assessments. The assessee’s books have also not indicated the impugned sum as a case of cessation of liability. We notice in this backdrop of facts that tribunal’s co-ordinate bench decision in ACIT vs. M/s Soorajmull Nagarmull in ITA No.1907/Kol/2016 decided on 20.07.2018 holds as under:- “3. We have heard both the parties reiterating their respective stands against and in support of impugned section 41(1) remission / cessation of liability involving the amount of Rs.12,97,47,322/-. The instant proceedings appear to be second round of litigation between the parties qua the very issue before this tribunal. Earlier co- ordinate bench had remitted the instant issue back to the assessing authorities for afresh adjudication (supra). 4. The Assessing Officer took up consequential proceedings. There is no dispute about the assessee to have been carrying forward the impugned liability in its books for a time span of almost three decades. It is an admitted fact that the department did not raise any issue in all intervening assessment years in question. It emerges that Assessing Officer had issued summons to six directors of the concerned entities on test check basis in the instant second round. Four of the said six entities’ directors put in appearance. They expressed their ignorance about any such trading transactions with the assessee in their respective statements. This made the Assessing Officer to issue a show-cause dated 12.03.2015 proposing to treat the above sum as a mere book entry as ceased u/s 41(1) of the Act. The assessee stated reiterated the fact of having claimed the impugned liability in its books almost three decades earlier for the first time followed by similar treatment in the intervening assessment years without any change relevant in facts. Its case was that none of its creditors had ever remitted their respective sums so as to attract section 41(1) of the Act. It highlighted the fact that above random creditors had supported its case as per their written replies in response to the respective summons. All this failed to convince the Assessing Officer. He noticed that one of the said written replies did not contain even concerned party’s signatures. He thereafter narrated the entire backdrop and quoted four of the tested check parties statements to conclude that the impugned liability was not genuine one so as to be taken as subsisting upto impugned assessment year. He took cognizance of the fact the that said four directors had expressed their complete ignorance about any corresponding transactions to have taken place in the past. Relevant intervening period had also not seen any payment from the taxpayer’s side for a very long period of time as per the Assessing Officer. He was therefore of the view that neither the creditors in question had taken any steps to recover their respective dues nor the instant taxpayer had discharged even a single penny of the impugned liability. All this formed sufficient reason for him to opine that the assessee had no intention to pay that money in question. He alleged creditors non confirmation as well as lack of their identity in his assessment order based on an assumption that they had either vanished or there was no effort at their