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Income Tax Appellate Tribunal, DELHI BENCH “SMC-1”, NEW DELHI
Before: SHRI S.V. MEHROTRA
This is an appeal filed by the assessee against the order dated 14.05.2015 passed by the Commissioner of Income Tax (Appeals), Ghaziabad, u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”) relating to A.Y. 2010-11.
Brief facts of the case are that the assessee had filed return of income declaring NIL income. The Assessing Officer noticed that the current liabilities of Rs.28,34,657/- included the liabilities from the following three parties :-
M/s Alpha Hi Tech Gases Pvt. Ltd. - Rs.10,00,000 2. M/s Ujala Gases and Chemicals Pvt. Ltd. - Rs. 5,00,000
M/s Attlantic Commercial Pvt. Ltd. - Rs. 40,000 Rs.15,40,000/-
3. He further noted that the assessee furnished the confirmations from these parties, their PAN and ward/circle where they are assessed to tax as the liabilities were very old coming forward from the year 1992 to 1998. As the assessee failed to furnish the confirmation and no evidence was furnished indicating that it was not a trading liability, he required the assessee to show cause as to why the same may not be taxed u/s 41(1) of the Act. He made an addition of Rs.15,40,000/- treating the same as unclaimed liabilities on the ground of cessation of these liabilities.
Ld. CIT(A) deleted the addition to the extent of Rs.1,44,000/- and confirmed the balance of Rs.13,96,000/-.
Being aggrieved by the order of Ld. CIT(A), the assessee is in appeal before the Tribunal and has taken following grounds :-
“The under mentioned Grounds of Appeal are without prejudice to one another:
1. (a) That on the facts and circumstances of the case and in law, the Ld Commissioner of Income Tax (Appeals), Ghaziabad [hereinafter referred to as CIT(A)] grossly erred in upholding the order of the Ld Assessing Officer [hereinafter referred to as Ld AO] confirming the addition of current liabilities other than trading liability amounting to Rs. 15,40,000/0 u/s 41 (1) of the Act without any material and basis, which is bad in law and not called for. (b) That on the facts and circumstances of the case and in law, the order passed by the Ld AO is bad in law and the liability determined under section 143(3) of the Act is liable to be deleted. The order passed by the Ld. AO is perverse, without application of mind and without jurisdiction.
2. That on the facts and circumstances of the case and in law, the Ld. AO and CIT(A) both has grossly erred in law and on the facts of the case to hold that the current liabilities to pay a sum of Rs. 15,40,000/- has ceased to exist and CIT(A) was further erred to confirm the said addition by applying the provisions of section 41(1) of the Act., which is arbitrary, untenable and bad in law and not called for.”
6. Ld. counsel referred to the submissions made before Ld. CIT(A) contained in the Paper Book at pages 1 to 9 and pointed out that though the confirmations could not be filed before the Assessing Officer but all details including PAN and ward/circle under which the parties were assessed were furnished before the Ld. CIT(A), which are as under :-
S. Name & Address PAN Assessing Amount Outstanding No. Officer since 1. M/s Alpha Hi-Tech Gases AAACA9967B Ward-2(2), 10,00,000/- 1997-98 (P) Ltd. C.R. Building, Reg. Add: A-263, IInd Delhi Floor, Defense Colony, New Delhi – 110024 alphagases@yahoo.com 2. M/s Ujala Gas and AAACU1521B Ward- 5,00,000/- 1997-98 Chemicals (P) Ltd. 27(2), C.R. Building Reg. Add: A-263, IInd Delhi Floor, Defense Colony, New Delhi – 110024 ujalagases@yahoo.co.in 3. M/s Atlantic Commercial AAACA5877C Ward-3(4), 40,000/- 1992-93 Company Ltd., C.R. Building, Reg. Office: 606, 6th Floor, Delhi Vikrant Tower, 4, Rajendra Place, New Delhi – 110008 limitedatlantic@gmail.com Total 15,40,000/-
He, therefore, submitted that the matter may be restored back to the file of the Assessing Officer for verification of the details.
The Ld. DR submitted that no proof has been furnished by assessee as to how these were short term loans and not claimed as deduction in earlier years. He, further, pointed out that part relief has been allowed by Ld. CIT(A).
I have considered the submissions of both the parties and perused the record of the case. The main reason for addition was that assessee failed to furnish the confirmation from the parties and also PAN as well as ward/circle of these companies. The assessee’s contention is that it had not claimed any allowance or deduction in the form of loss or expenditure in the previous year 1997-98, the year in which the assessee had received the payment of Rs.10,00,000/- from M/s Alpha Hi-Tech Gases (P) Ltd. and Rs.5,00,000/- from M/s Ujala Gas and Chemicals (P) Ltd. and had also not claimed any loss or expenditure during any subsequent previous year. The assessee had shown these liabilities under the head current liabilities but since details were not furnished, the Assessing Officer did not treat them as trading liabilities. Under such circumstances, for proper appreciation of facts, it is necessary that proper enquiries be carried out on the basis of details furnished by assessee before Ld. CIT(A). I, therefore, restore this matter back to the file of the Assessing Officer to verify the details as furnished before the Ld. CIT(A), reproduced earlier.
In the result, the assessee’s appeal is allowed for statistical purposes.
Order pronounced in the open court on this 01st day of December, 2016.