OXIDES AND SPECIALITIES LIMITED,NAVI MUMBAI vs. CIT (A)-24, MUMBAI

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ITA 2856/MUM/2016Status: DisposedITAT Mumbai19 September 2018AY 2009-103 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The tribunal dismissed the appeal as withdrawn based on the assessee's request. The assessee intended to claim deductibility of the liabilities in the year they were paid off.

What were the facts?

The assessee, a sick industrial company registered with BIFR, had sundry credits treated as cessation of liability by the AO under Section 41(1). The assessee wished to claim deductibility in the year of payment.

What were the issues?

Whether sundry credits treated as cessation of liability under Section 41(1) should be taxed in the current year, or if deductibility can be claimed upon actual payment.

Which sections of the Income-tax Act were involved?

Section 41(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI

Before: SHRI G.S. PANNU & SHRI PAWAN SINGH

For Appellant: Shri Vipul Joshi, Ms. Dinkle Hariya
For Respondent: Shri Love Kumar
Hearing: 19/09/2018Pronounced: 19/09/2018

The captioned appeal filed by the assessee pertaining to Assessment Year 2009-10 is directed against an order passed by CIT(A)-24, Mumbai dated 21.01.2016, which in turn arises out of an order passed by the Assessing Officer under Section 143(3)(ii) of the Income Tax Act, 1961 (in short ‘the Act’) dated 19.12.2011.

2.

At the time of hearing, the learned representative for the assessee submitted that the only issue in dispute was an addition of Rs.3,05,64,703/- made by the Assessing Officer by invoking Sec. 41(1) of the Act. The learned representative pointed out that assessee was a ‘sick industrial company’ within the meaning of Sec. 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 and is registered with the Board for Industrial and Financial Reconstruction (BIFR). The learned representative pointed out that the addition represented various sundry credits which had remained outstanding for payment; and, the same has been treated by the Assessing Officer as cessation of liability in terms of Sec. 41(1) of the Act. The learned representative stated that assessee had substantive losses even after considering the aforesaid addition and such losses have also not been set-off in any subsequent years.

3.

It was asserted by the learned representative that assessee seeks to pursue deductibility of the aforesaid sum in the year when the said liabilities are paid off by it as per law and, in that light, it does not wish to pursue the present appeal. The learned representative submitted that the appellant be allowed to withdraw the present appeal.

4.

The ld. DR had no objection to the prayer of the assessee to withdraw the present appeal.

5.

Considering the prayer of the assessee, the captioned appeal of the assessee is dismissed as withdrawn.

The above decision was pronounced in the open court in the presence of both the parties at the conclusion of the hearing on 19th September, 2018.

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