TMI Blog2018 (6) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... 246/Ran/2016 - - - Dated:- 30-5-2018 - Shri N. S. Saini, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member Revenue by : Shri A. K. Mohanty, JCIT Assessee by : None ORDER Per Pavan Kumar Gadale, JM This is an appeal filed by the Revenue against the order of CIT(A), Hazaribag, dated 04.05.2016, for the assessment year 2010-2011 2. None appeared on behalf of the assessee when the matter was called for hearing, however, the assessee has filed written submission in the matter, therefore, the Bench decided to dispose off the appeal after considering the submissions of ld. DR and the written submission filed by the assessee as well as the material available on record. 3. The Revenue has raised the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other benefits as outstanding liability and supported the order of AO. 8. We heard the submissions of ld. DR and the written submissions filed by the assessee and perused the material on record. Prima facie, the only disputed issue that raised by the Revenue is with respect to deleting the addition on account of retrenchment compensation and other benefits as outstanding liability. We found that the CIT(A) has dealt on this issue after considering the submission at para 3 onwards. The observations of the CIT(A) in this regard are as under :- 3.0 In this case, only two substantive grounds have been raised by the appellant, (a) against the addition^ of current liability of ₹ 68,68,370/- on account of worker's retrenchment c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. is wrong in passing the order u/s 144 (exparte) because the assessee wade compliance day to day queries in course of hearing. Although the A. O. has observed (he assessee followed the Mercantile System of Accounting but it states that no books of accounts were produced which is a contradictory statement. The statement of a/c with copies of ledger etc were submitted in course of hearing but the learned A. O. willfully avoided the examination of the books of a/c 's although it was produced. The appellant enclosed the order of penalty u/s 271H which shows that the books of accounts were produced and test checked. But the A.O. although he basically discarded the accounts but keeping off the percentage basis he disallowed the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note of the order of earlier year in (his issue. It every year it is the system followed as (he retrenchment benefit outstanding of the previous year has been paid in the current year. In the instant case (he liability of retrenchment benefit of Rs: 42,75,756/- of the previous year i.e. A/Y- 2009-10 is paid during (his year A/Y- 2010-11. However (his year's liability of ₹ 68, 68,370/- could not been paid fully but a sum of ₹ 35,77,253/- has been paid in F/Y- 2010-11 again a sum of ₹ 32,91,117/- has been paid in F/Y-2011-12. The practical difficulty to defer the payment is due to non release of the retention money of ₹ 41,74,148/- by the principal contractor Larsen Toubro Ltd. (A chart is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned A.O. has mentioned in the order sheet dated 30/01/2013 but there is no intimation to the A/R of the assessee. The. appellant produced the Muster Roll. Whenever an order is passed u/s 144 the A.O. discard the accounts submitted by the assessee and the order is passed on estimation basis by taking the Net Profit at higher than the Net Profit shown by the assessee. This be the system followed the learned A.O. should have enhanced the Net Profit as per estimation as against (he 3.68 % of the Net Profit declared by the assessee. Therefore the framing of order is not as per practice or procedure. Alternately the appellant urge that the matter may be considered in this line and a relief may kindly be given It m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the accounts maintained as such I find no infirmity in the appellant s claim of retrenchment compensation debited in the account of ₹ 68,68,370/-. Therefore, in my j considered opinion, no addition is required on this issue. Reliance is placed on the judgment of Hon'ble Supreme Court in the case of Bharat Earth Movers Vs. C1T (245 ITR, 428). The appellant succeeds on this ground of appeal. The Assessing Officer is. however, free to invoke the provisions of Section 41(1) of the I.T. Act in case this liability ceases to exist in future either in part or full. 3.5 As regards the second issue with regard to order passed u/s.144 of the I.T. Act, the appellant has submitted that when the copies of ledger accounts, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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