9911796707
TMI Blog2012 (7) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.36,58,362/- to Profit and loss account and hence sec. 41(1) is not applicable to the peculiar facts and circumstances of the case of the appellant and therefore, additions of Rs.20,94,308/- confirmed by Ld. CIT(A) be deleted. 4. That the Ld. A.O. as well as Ld. CIT(A) has not established that there is a remission or cessation of liabilities as contemplated u/s. 41(1) and hence addition of Rs.20,94,308/- retained by Ld. CIT(A) be deleted. 5. That the liabilities of all the parties mentioned in Assessment order is appearing in Balance sheet and on inference, the Ld. CIT(A) has confirmed an additions of Rs.20,94,308/- of 15 parties holding it as cessation of liabilities u/s. 41(1) which is against the provisions of the Act. 6. That there is no cogent reasons and material evidences on record to come to the conclusion that the liabilities outstanding since last three years as held by Ld. A.O. have ceased in the year under consideration and hence total additions of Rs.36,58,362/- deserves to be deleted. 7. That the appellant has not obtained any benefit in cash or any other manner whatsoever as contemplated u/s. 41(1) and hence part additions of Rs.20,94,308/- confirmed by Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has retained an additions of Rs.20,94,362/- which deserves to be deleted. 4. On the facts and circumstances of the case of the Cross Objector, the appeal filed by the Department be dismissed and part additions of Rs.20,94,308/- retained by Ld. CIT(A) u/s. 41(1) be deleted. 5. That the appeal filed by the Department be dismissed and part additions u/s. 41(1) of Rs.20,94,308/- sustained by Ld. CIT(A) be deleted. 6. Your Cross Objector craves leave to add, alter or amend any of the grounds till the finally heard and decided." 5. Since the issues involved in both the appeals as well as the Cross Objection are common, for the sake of convenience the same are decided by consolidated order. 6. Brief facts of the case are that the assessee is a partnership firm engaged in the business of trading in rice, dals and pulse etc on wholesale basis and retail trading. It electronically filed return of income on 8-9-2008 declaring total income of Rs.1,22,820/-. Thereafter the case was selected for scrutiny and the assessment u/s. 143(3) of the Act was completed on 29-12-2010 wherein the total income was determined at Rs.37,81,190/- thereby making the addition of Rs.36,58,362/- t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. 4.3. (iii) As far as the 3 parties in respect of whom the letters have been returned unserved are concerned, the A.R. of the appellant was unable to give the current addresses of these parties. Neither during assessment proceedings nor during appellant proceedings was the appellant able to explain why the letters were returned unserved. The A.R. of the appellant was also not able to explain how the appellant could ever repay these parties because he neither knew their correct addresses or any details of the agents through whom the purchases were made from these parties. The A.O. cannot be asked to do the impossible. The onus to furnish the primary details is on the appellant. In this case no details have been furnished in respect of 12 parties and the details furnished in respect of 3 parties are not correct. The A.R. of the appellant has also not been able to give any convincing reply as to how the appellant would ever repay these parties. 4.3. (iv) In view of the above it is clear that the liability shown by the appellant in respect of the 15 parties has actually ceased. The liability in respect of these parties is Rs.20,94,308/-. The addition made by the A.O. is hence co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the assessee is liable to pay. It was further submitted that the purchases have not been made directly but is through agents. The agents through whom the transactions were entered have changed. He further relied on the following decisions: 1. CIT vs. Bharat Iron and Steel Industries (1993) 199 ITR 67 (Gujarat). 2. Utsav Silk Mills Ltd. Vs. ACIT in ITA No.339/Ahd/2009 dt.5-8-2011 3. Kaps Advertising vs. ITO (2011) 11 ITR (Trib) 13 (Delhi) 4. Shri Vardhaman Overseas Ltd. vs. ACIT (2008) 24 SOT 393 (Del) 5. CIT vs. Indian Rayon & Inds. Ltd. (2010) 236 CTR 0279 (Cal.) 6. P.I.C. Gujarat Ltd. vs. DCIT (2011)8 ITR (Trib.) 417 (Ahd.) 7. New Commercial Mill s Co Ltd. vs. DCIT (2001)73 TTJ 893 (Ahd.) 11. On the other hand the Ld. D.R. contended that the assessee could not furnish addresses or details of the agents, no details were available with the assessee and the assessee was also not in a position to prove the genuineness. It was further stated that the Assessee could not produce the creditors nor could he furnish the addresses and therefore the AO was right in making addition u/s 41(1). The D.R further submitted that the case laws relied upon by the assessee are distin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addresses of the parties and their agents. Even before us, the assessee has not been in a position to furnish the current addresses of the parties or their agents. In view of these circumstances and the totality of the facts, we are of the considered view that the CIT(A) was right in upholding the addition made in respect of 15 parties aggregating to Rs 20,94,308/-. With respect to the action of CIT (A) in deleting the addition with respect to 5 parties aggregating to Rs 15,64,054/- the CIT(A) has given a categorical finding that the enquiry made by the AO was not proper as the bills issued by the parties related to period prior to 31.3.2001 whereas the AO had asked those parties about the transactions carried out in FY 2005-06 to FY 2007-08. The existence of these 5 parties was therefore not in doubt. Accordingly, the CIT (A) deleted the addition. The case laws relied upon by the assessee are distinguishable on facts. In view of the totality of facts and in the circumstances of the case, we find no infirmity in the order of CIT(A) and therefore no interference is called for in his order. Accordingly the ground of assessee and the Revenue dismissed. 13. Ground No 11 relates t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
