TMI Blog2018 (1) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the same does not amount to additional evidence in view of the order of Mumbai Tribunal in the case of Swift Freight India Limited [2015 (1) TMI 738 - ITAT MUMBAI]. Thus we hold that no additional document was filed before the Ld. CIT(A). The Ld. DR has not brought anything on record contrary to the finding of the Ld. CIT(A). Thus, we hold that no additional document was admitted by the Ld. CIT(A) in contravention to the provision of the Rule 46A of the Income Tax Rules. Hence, we respectfully following the consistent view of the Tribunal decline to interfere with the order passed by the Ld. CIT(A) on this account and accordingly the ground take by Revenue is regretted. Addition on account of undisclosed rental income - assessee has not accounted for the income of TDS deducted by the parties - HELD THAT:- We note that the addresses of both the parties namely Nokia India Pvt. Ltd. and Nokia Siemens Network Pvt. Ltd. were available before the AO at the time of assessment but the AO has not exercised power given u/s 133(6) and 131 of the Act to verify whether any income has accrued to the assessee or not. The affidavit furnished by the assessee before the ld. CIT(A) does not amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the head profit and gains of business or profession. The assessee in the earlier years was also engaged in the manufacturing of television business which was closed down in the year 1997. 4. The assessee in the year under consideration has shown sundry creditors of ₹ 69,74,254.20 only at the end of the financial year. Out of these creditors a sum of ₹ 59,75,631/- was representing the sundry creditors pertaining to the television business of the assessee and the remaining sundry creditors of ₹ 9,98,614/- was relating to present business i.e. Haldia Projects. The assessee during the assessment proceeding furnished a list of 135 parties representing the creditors of ₹ 59,75,631/- pertaining to the television business. However, there was no address in the list provided by assessee to the AO. Accordingly, the AO was of the view that the trading liability of sundry creditors has ceased to exist in the books of the assessee and therefore liable to be taxed u/s 41(1) of the Act. Thus the amount of sundry creditors for ₹ 59,75,631.00 was disallowed u/s 41(1) of the Act and added to the total income of the assessee. 5. Aggrieved assessee preferred an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,75,631/- stands deleted. As a result, this ground of appeal is disposed of as allowed. Being aggrieved by the order of Ld. CIT(A) the revenue is in second appeal before us. 6. The Ld. DR before us submitted that the addresses of the sundry creditors were not furnished at the time assessment. Thus, no verification of the creditors was made to establish the genuineness. Therefore, the assessee is not liable to make the payment of sundry creditors. The Ld. DR vehemently supported the order of AO whereas the Ld. AR filed the paper book which is running from pages 1 to 45 and drew our attention on the provisions of section 41(1) of the Act which reads as under:- Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee (hereinafter referred to as the first-mentioned person) and subsequently during any previous year,- ( a) the first-mentioned person has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof. the amount ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtinent to note that the balance of sundry creditors as on 31-03-2011 and as on 31-03-2012 stood at ₹ 69,74,245/- as evident from the audited financial statement. Thus, the closing liabilities for creditors as on 31-03-2011 have been continued to the immediately next year as the opening liabilities for creditors on 01-04- 2011. The said fact was also stated before the AO during the course of assessment proceedings. But the AO without appreciating the aforesaid facts has added back sundry creditors amounting to ₹ 59,75,631/- unilaterally under the provisions of section 41 (1) of the Act which is wholly unjustified. The Ld. AR relied on the order of Ld. CIT(A). 7. We have heard the rival submissions, perused the relevant finding given in the impugned order as well as the material on record. The sole basis for taxing the amount of ₹ 59,75,631/- by the Assessing Officer under section 41(1) is that the genuineness of sundry creditors was not established as the assessee failed to furnish the addresses of creditors. Before we deal with the issue involved here, it would be relevant to quote the relevant section 41(1), which reads as under:- Where an allowance or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the creditors in the assessee's account. In the judgment of Hon'ble Gujarat High Court in the case of CIT Vs. Nitin. S. Garg reported in 208 taxman 16 (Guj), it was held that addition u/s 41(1) can be made only when it is found that there was a remission and/or cessation of the liability. The relevant extract of the order is reproduced below:- It is not been established that the assessee has written off the outstanding liabilities in the books of account. The Appellate Tribunal is justified in taking the view that as assessee had continued to show the admitted amounts as liabilities in its balance sheet the same cannot be treated as assessment of liabilities. Merely because the liabilities are outstanding for last many years, it cannot be inferred that the said liabilities have seized to exist. The Appellate Tribunal has rightly observed that the AO shall have to prove that the assessee has obtained the benefits in respect of such trading liabilities by way of remission or cessation thereof which is not the case before us. Merely because the assessee obtained benefit of reduction in the earlier years and balance is carried forward in the subsequent year, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 and therefore the AO is directed to delete the addition made. As a result, this ground of appeal is allowed. Being aggrieved by the order of the Ld. CIT(A) the Revenue is in second appeal before us. 11. The Ld. DR before us submitted that the additional documents were filed before the Ld. CIT(A) in contravention to the provision of the Rule 46A of the Income Tax Rules. Thus the impugned issue needs to be restored back to the file of the AO for fresh adjudication. On the other hand, the Ld. AR submitted that the reconciliation statement was filed before the lower authorities which are placed at page 14 of the paper book. However, the Ld. AR fairly considered that the reconciliation statement in respect of each and every fixed deposit was not furnished before the AO and the same was filed before the Ld. CIT(A). However, the reconciliation statement as filed before the Ld. CIT(A) does not amount to additional document and therefore, the same is not required to be sent back to the AO for fresh adjudication. The Ld. AR in support his claim as relied on the order of Hon ble ITAT in the case of DCIT vs. Swift Freight India Limited reported in 58 Taxmann.com 105 wherein it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is that the Ld. CIT(A) erred in deleting the addition made by the AO for ₹ 3,56,340/- on account of undisclosed rental income. 14. The AO during the assessment proceedings observed that two parties namely Nokia India Pvt. Ltd. and Nokia Siemens Network Pvt. Ltd. has deducted the tax in the name of the assessee u/s 194J of the Act for ₹ 25,000/- and ₹ 11,634/- respectively. But the corresponding income of ₹ 2,50,000/- and ₹ 1,16,340/- as shown in Form 26AS was not offered to tax by the assessee in its income tax return. Therefore, the AO treated the same as undisclosed income and added to the total income of the assessee under the head income from other sources. 15. Aggrieved assessee preferred an appeal to the Ld. CIT(A). The assessee before the Ld. CIT(A) submitted that it has not received any income as discussed above from the aforesaid parties during the year. Accordingly, no credit of TDS amounting to ₹ 33,634/- was taken by the assessee while filing its income tax return. Therefore, no addition for the aforesaid income can be added in the hands of the assessee. The Ld. CIT(A) after considering the submissions of the assessee del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same was appearing in Form No. 26AS for the relevant year. The respondent as neither actually received nor earned any such amount from the tenants as stated above during the previous year relevant to assessment year under consideration. In this regard it is humbly submitted that during the relevant year the respondent had not provided any professional services to the aforesaid tenants as such, the question of receiving any payment in lieu of professional services does not arise. The respondent had also not taken the TDS credit of ₹ 33,634/- in the return of income for the relevant year which were inadvertently credited by the aforesaid tenants, as evident from Form No.26AS. Hence, it is humbly submitted that the amount of ₹ 3,36,340/- should not be treated as income of the respondent for the relevant year since the respondent had not earned the said income during the instant year. In this regard, it is further submitted that, the respondent had filed an affidavit ( copy filed in paper book at 39 ) duly notarized before the Ld. CIT(A) to confirm that the aforesaid amount which was alleged to have been concealed was not received by the respondent at any time during the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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