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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Shri P.M. Jagtap
This appeal is preferred by the assessee against the order of ld. Commissioner of Income Tax (Appeals)-XIV, Kolkata dated 28.02.2014 for the assessment year 2008-09 and in the solitary ground raised therein, the assessee has challenged the addition of Rs.5,21,950/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) under section 41(1) on account of cessation of liability.
The assessee in the present case is a partnership firm, which is engaged in the business of trading of hardware goods. The return of income for the year under consideration was filed by it on 29.09.2008 declaring total income of Rs.80,205/-. During the course of assessment ./2014 Assessment year: 2008-2009 Page 2 of 3 proceedings, it was noticed by the Assessing Officer that a sum of Rs.5,21,950/- payable to M/s. Yogi Sea Ways (P.) Limited was shown under the head ‘sundry creditors’ by the assessee as on 31.03.2008. Since the said liability was found to be non-existent during the course of assessment proceedings under section 143(3) for assessment year 2006- 07, the assessee was called upon by the Assessing Officer to offer its explanation in the matter. In reply, it was explained by the assessee that a sum of Rs.5,21,950/- on account of cessation of this liability has already been added to its total income in the assessment completed under section 143(3) for A.Y. 2006-07. This explanation of the assessee was not found acceptable by the Assessing Officer and he made the addition of Rs.5,21,950/- again to the total income of the assessee for the year under consideration. On appeal, the ld. CIT(Appeals) confirmed the said addition made by the Assessing Officer. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.
I have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the ld. Counsel for the assessee, the addition of Rs.5,21,950/- on account of the same liability payable by the assessee to M/s. Yogi Sea Ways (P.) Limited was made by the Assessing Officer in the assessment completed under section 143(3) for A.Y. 2006-07 after having found that the said liability had ceased to exist. As pointed out by the ld. Counsel for the assesese from the copy of order for A.Y. 2006-07 placed on record, the said order was passed on 19.12.2008 and, therefore, the concerned liability was still shown in the balance-sheet as on 31.03.2008 and was returned back only thereafter. Keeping in view this submission made by the ld. Counsel for the assessee as well as the relevant material placed on record including the copy of assessment order for A.Y. 2006-07, I find that the addition of Rs.5,21,950/- on account of cessation of liability payable by the assessee to M/s. Yogi Sea Ways (P.) Limited was already made to the total income of the assessee in A.Y. 2006-07 and the action of the Assessing Officer in bringing to tax the same amount again in the year under consideration ./2014 Assessment year: 2008-2009 Page 3 of 3 clearly amounted to double addition, which is not sustainable. I accordingly delete the said addition and allow this appeal of the assessee.
In the result, the appeal of the assessee is allowed.