AMAR KANT AGARWAL ,KOLKATA vs. ITO, WARD - 43(1), KOLKATA , KOLKATA
Appeal is allowed
ITA 1887/KOL/2018[2013-14]Status: DisposedITAT Kolkata15 May 2019AY 2013-14
Bench: Shri S.S, Godaraassessment Year:2013-14 Amar Kant Agarwal Income Tax Officer, बनाम / Prop: Ruchira Chemical Ward-43(1), 3, Govt. V/S. Corportion, 9, Ram Sevak Place (West), Mullick Lane, Kolkata-001 Kolkata-700007 [Pan No.Acypa 7815 P] .. अपीलाथ" /Appellant ""यथ" /Respondent Shri Miraj D Shah, Advocate अपीलाथ" क" ओर से/By Appellant Shri C.J. Shah, Jcit-Sr-Dr ""यथ" क" ओर से/By Respondent 05-03-2019 सुनवाई क" तार"ख/Date Of Hearing 15-05-2019 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R This Assessee’S Appeal For Assessment Year 2013-14, Arises Against The Commissioner Of Income-Tax (Appeals)-13, Kolkata’S Order Dated 24.07.2017 Passed In Case No.312/Cit(A)-13/Kol/2014-15, Involving Proceedings U/S. 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. The Sole Substantive Dispute That Arose For My Apt Adjudication In The Instant Appeal Is Of Correctness Of Sec.41(1) Cessational Liability Addition Of ₹5 Lac In Respect Of Assessee’S Alleged Sundry Creditors M/S R.K. Trading Co. U/S 41(1) Of The Act. The Cit(A)’S Detailed Discussion Confirming The Impugned Addition Reads As Under:- “4. Decision:- I Have Gone Through The Contention Of The Assessee, The Order Passed By The Ao & The Submissions Made By The Appellant. The Decision Of This Appeal Is Given As Under:- Continued To Show The Amounts As Liability In His Balance Sheet. There Is No Cessation Of Liability. Hon. Madras High Court In Cit V. Tamilnadu Warehousing Corporation (2007) 292 Itr 310 Had Held - ‘The Assessee Had Continued To Show The Admitted Amount Of Rs.8/22/925J- As Liability In The Balance Sheet. The Undisputed Fact Was That It Was A Liability Reflected In The Balance Sheet. Once It Was Shown As Liability By The Assessee, The
Section 143(3)Section 41(1)
…al Vs. ITO Wd-43(1), Kol. Page 2 Commissioner was wrong in holding that it was assessable under section 41(1) of the Act. Unless and until there is cessation of liability section 41(1) is not applicable’ In the case of Pr. CIT v. Mahuraprasad C. Pandey (2015) 377 ITR 363, the AO made an addition of Rs.56,96,645/- invoking section 41(1) of the Act doubting sundry creditors appearing in the balance sheet of the assessee for the past several years. The addition was deleted by the Tribunal. On departmental appeal the Gujrat High Court held - 'that the sundry creditors mentioned in the balance sheet of the assessee we…
