9911796707
TMI Blog2013 (12) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the fact that the assessee failed to prove the genuineness of the liability. (ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition u/s. 41(1) of Rs. 86,25,651/- without giving an opportunity to the A.O. for further verification. (iii) The appellant prays that the order of the ld. CIT(A) on the above grounds to be set aside and that of the A.O. be restored." 2. Brief facts of the case are that the assessee is an individual engaged in the business of civil construction and labour contractor under the name & style of M/s. Engarc Construction. The assessee filed his return of income for the relevant year admitting total income of Rs. 16,76, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same had ceased to exist. He therefore Shri Shailesh D. Shah added the same into the income of the assessee under section 41(1) of the Income Tax Act. 3. Before the ld. CIT(A) the assessee submitted that as per the dissolution deed, the assessee was to take over only the assets of the firm and not its liabilities, hence, the assessee had disowned himself of the labour liability of Rs. 86,25,651/- and there was no question of remission of the same under section 41(1). However, the ld. CIT(A) observed that as per the dissolution deed not only the assets of the firm but also its liabilities were intended to be taken over by the assessee. Even the assessee after the take-over had shown the liability in its books of account; hence, the stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt is reproduced as under: "9. Two aspects are to be noticed in this context. The first is that the view that liability does not cease as long as it is reflected in the books, and that mere lapse of time given to the creditor or the workman, to recover the amounts due, does not efface the liability, though it bars the remedy. This view, with respect is an abstract and theoretical one, and does not ground itself in reality. Interpretation of laws, particularly fiscal and commercial legislation is increasingly based on pragmatic realities, which means that even though the law, permits the debtor to take all defences, and successfully avoid liability, for abstract juristic purposes, he would be shown as a debtor. In other w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus assessable u/s. 41(1) of the Income Tax Act. He has strongly relied upon Shri Shailesh D. Shah the authority of the Hon'ble Delhi High Court styled as "CIT vs. Shri Vardhaman Overseas Ltd." (2012) 343 ITR 408 (Del). Apart from the said authority, to stress this point, he has also relied upon the following decisions: 1. "CIT v. Bharat Iron & Steel Industries" [(1993) 70 Taxman 353 (Guj.)]/[(1993) 199 ITR 67 (Guj.)]/ [(1992) 105 CTR 331 (Guj.)] 2. "DSA Engineers (Bombay) v. ITO" [2009] 30 SOT 31 (Mum.)(ITAT) 3. "CIT v. Indian Rayon & Industries Ltd." 2010-(IT2)-GJX- 0688-BOM 4. "CIT v. J.K. Chemicals Ltd." [1996] 62 ITR 34 (Bom.) 5. "CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. which has been taken on record and the opportunity of hearing on the said documents has also been given to the ld. DR also. After going through the newly filed documents, it reveals that the assessee had no evidence of the payment of such labour charges even till date. The assessee vide affidavit letter dated 28.10.13 has deposed that in fact he had given a comprehensive power of attorney to his earlier partner Mr. Abdul Qadir to look into the affairs of his proprietary concern M/s. Engarc Contractors. The said Mr. Abdul Qadir has not provided him any accounts in connection with the assessee concern despite several reminders. However, during the financial year 2007-08 and financial year 2008-09, he had received an amount of Rs. 80,70,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount to any such person at this stage. The assessee has just continued the entry of the same in his books of account without any intention to pay back the same. Even as observed above when the identity of any such labourer is not known the question of payment of such amount to such person does not arise. 9. As observed by the co-ordinate bench of the Tribunal in the case of "Yusuf R. Tanwar, vs. ITO" (ITA No.8408/Mum/2010) decided on 28.02.13 that the proposition of law laid down by the Hon'ble Delhi High Court in "Chipsoft Technology (P) Ltd." (supra) is not contrary to that of laid down by the Hon'ble Delhi High Court in the case of "Shri Vardhaman Overseas Ltd." (supra). The proposition of law laid down in "Chipsoft Technology ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
