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DCIT, Circle 13 (1) , New Delhi Versus NEC Engineering Pvt. Ltd.

2011 (1) TMI 1512 - ITAT DELHI

ITA Nos. 4965 & 4966/Del/2010 - Dated:- 14-1-2011 - I. P. Bansal (Judicial Member) And A. K. Garodia (Accountant Member) For the Appellant : K. Ravi Ramchandaran, Sr. DR For the Respondent : Surinder Kumar Jain, CA ORDER I. P. Bansal (Judicial Member) Both these appeals are filed by the revenue. They are directed against two separate orders passed by ld. CIT(A) dated 3rd August, 2010 and 11th August, 2010 for assessment years 2006-07 & 07-08. 2. Grounds of appeal in both the appeals read as .....

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he assessee company was not involved in any business activity since June, 2002. 3. That on the facts and circumstances of the case, the ld. CIT(A) erred in ignoring the decision of the SC in the case M/s Bombay Steam Navigation Co. P. Ltd. Vs. CIT (1965)56 ITR 52, wherein it was held that income/loss from business/profession is chargeable to tax only if the business/profession is carried out in the previous year. 4. That the appellant craves to be allowed to add any fresh grounds of appeal and/o .....

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mpany had earned business income, as the assessee company was not involved in any business activity since June, 2002. 3. That on the facts and circumstances of the case, the ld. CIT(A) erred in ignoring the decision of the SC in the case M/s Bombay Steam Navigation Co. P. Ltd. Vs. CIT (1965)56 ITR 52, wherein it was held that income/loss from business/profession is chargeable to tax only if the business/profession is carried out in the previous year. 4. That the appellant craves to be allowed to .....

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lf war the assessee could not export the goods and the assessee has now started the fabrication and erection business in the domestic market and as such there was temporary lull in the business due to circumstances beyond the control of the assessee, hence all these expenditures should be allowed. 5. Ld. CIT(A) has allowed the claim of the assessee despite the fact that it was brought to his notice that the Tribunal vide its order dated 4.3.10 in the case of the assessee with respect to assessme .....

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ave waited the order for A.Y. 2004-05 or should have called for a remand report from the AO to ascertain the directions given by the Tribunal in this regard and then to render his decision. Thus, he pleaded that it would be better if the matter is restored to the file of AO to re-adjudicate this issue as per directions given by Tribunal in the aforementioned order. 9. On the other hand, relying upon order of CIT(A), it was pleaded by ld. AR that relief has rightly been given to the assessee and, .....

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the file of AO. The relevant observations of this Tribunal in this regard as contained in para 8 & 9 are reproduced below: - 8. We have heard both the parties on this limited issue about the admission of additional evidences. On perusal of the application, we find that the assessee has filed certain additional evidences in the form of balance sheet or statement of account as on 31.3.08 and31.3.09 alongwith some sale invoices for the F.Y. 07-08 to support the assessee s stand that the assesse .....

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hen the assessment was made and even at the time when the impugned order of the CIT(A) was passed on4.1.08. Therefore, for the ends of justice and proper adjudication of the matter, we allow the assessee s application and admit these documents for consideration. However, as these documents were not available either before the AO or before the CIT(A) nor the AO had any occasion or opportunity to examine and consider them while passing the assessment order, it would be fit and proper for the ends .....

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oned order. The assessee shall furnish all the relevant details and papers before the AO in support of his case, and the assessee shall also be at liberty to make his submissions and contentions as assessee may so advised, which would be considered by the AO. The AO shall then decide the matter as per provisions of law, on the basis of evidences and material available on record. We order accordingly. 9. In the result, the appeal filed by the assessee is treated to be allowed for statistical purp .....

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that these sums were outstanding since 31.3.04 and, therefore, for the past three years the assessee has not discharged such liability and, therefore, he treated such liability of the assessee having been ceased and added the said amount u/s 41(1) of the Income Tax Act, 1961 (Act). It has been the case of the assessee that sundry creditors outstanding could not be treated as ceased liability as the delay realization of debts causes for not paying to the creditors, as the same will be paid when r .....

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such loss or expenditure is obtained by way of remission or cessation by the assessee during the year or in a subsequent year. He has found that in the present case, neither there is remission nor there is cessation of the liability. The assessee has also not obtained any benefit whatsoever, therefore, sec. 41(1) is not applicable. Ld. CIT(A) has referred to the decision of Hon ble Delhi High Court in the case of CIT Vs. Auto Pins India, 197 ITR 161, wherein the order of the Tribunal was upheld .....

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