TMI Blog2020 (2) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... by the company. The assessee has furnished complete party wise and age wise details of sundry creditors aggregating to ₹ 30,91,95,000/- and these were outstanding as on date and had not ceased to exist or were written off by the assessee. Hence, these were very much existing liability and cannot be treated as ceased under section 41(1) of the Act. Hence, we are of the view that the CIT(A) has rightly deleted the addition and we confirm the same. Carry forward and set off of unabsorbed depreciation beyond 8 years - HELD THAT:- This issue is squarely covered in favour of assessee and against Revenue by the decision of Hon ble Gujarat High Court in the case of General Motors India (P). LTD. [ 2012 (8) TMI 714 - GUJARAT HIGH COURT] - Decided against revenue. - ITA No. 107/Mum/2016 (Assessment Year 2011-12) - - - Dated:- 8-1-2020 - SRI MAHAVIR SINGH, JM AND SRI M BALAGANESH, AM Appellant by: Shri Anadi Varma, DR Respondent by: Shri Ronak Doshi, AR ORDER PER MAHAVIR SINGH, JM: This appeal by Revenue is arising out of order of the Commissioner of Income Tax (Appeals)]-16, Mumbai [in short CIT(A)], in Appeal No. CIT(A)-16/IT-83 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts, original inward register and outward register for the year under consideration i.e. FY 2010-11. The AO also asked the assessee to produce the ledger of creditors, original purchase bills with delivery challans, lorry receipts and original sale bills with delivery challans, lorry receipts, original inward register and outward register for AY 2006-07, 2007-08, 2008-09, 2009-10 and 2010-11. The AO also recorded the statement of Shri Ravindra Chaturvedi, Manager (Taxation), who attended the proceedings of the assessee company in regard to assessment. The AO recorded the statement of Shri Ravindra Chaturvedi under section 131 of the Act on 19.02.2014, wherein he replied that sale tax assessment for FY 2010-11 relevant to this AY 2011-12 is going on with the sale tax authorities at Mathura. He also replied while recording the statement that sale tax authorities issued notice vide No. 2143 dated 20.12.2013 to the assessee company, by virtue of which the records are required to have. The copy of sale tax notice was also submitted during recording of statement. Again, on 10.03.2014, statement of Shri Ravindra Chaturvedi was recorded under section 131 of the Act and he replied vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents such as purchase bills, lorry receipts, delivery challans, inward registers, sales bills and documents as asked for by various order sheet entries and summons issued to the assessee. Shri Ravindra Chaturvedi, Manager (Taxation) and AR of the assessee company take false stand that its books of accounts are being produced before sale tax authorities which was evident from the reply of the Dy. Commissioner of Commercial Tax, Uttar Pradesh. 5. In view of the above, he rejected the books of accounts by referring to the provisions of section 114(g) of the Indian Evidence Act, 1872 in Para 3.6 of the assessment order and the relevant text read as under: - Accordingly, the books of accounts of the assessee company are hereby rejected invoking the provision of section 145(3) of the Act since being not to the satisfaction of this office about the correctness or completeness of the accounts of the assessee or the genuineness of the transactions recorded in the books of accounts. In absence of the comparables which were asked by the assessee while recording statement under section 131 of the I.T. Act. However, he failed to submit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. 17/01/2014 Details of Capital Investment subsidy, investment allowance Reserve, debenture Redemption Reserve, Reason of high claim of Refund out of TDS, Settlement with lenders and AIR Reconciliation. 5. 21/01/2014 Party wise Sales, party wise Purchase, Addresses of Purchase/ Sales Parties and List of Sundry Creditors (Major Parties) 6. 27/01/2014 Creditors Ledger, bank Statement, Purchase Bills, Details of Loan Advances, Settlement Details and Depreciation Explanation, Submissions as regards creditors and their settlements. 7. 11/02/2014 AR Mr. Ravindra Chaturvedi has been given PA to represent the Company and Principal Officer of the Company. 8. 11/02/2014 Purchase Bills copies along with delivery challans and Lorry Receipts self-certified Sr. No.1 to 245/ Sales Bills Sr. No.1 to Sr. No. 131 9. 13/02/2014 Submission as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even in his remand report. It was contended by the assessee before us now that it has made a proper application under rule 46A(1) of the Income-tax Rules, 1962 (hereinafter the Rules), stating that documents are additional evidences and also provided reasons for non-filing of such documents during assessment proceedings which was considered by the CIT(A) and accepted. Even the Revenue now before Tribunal has not raised any such ground challenging the admissibility of additional evidences admitted by CIT(A) under Rule 46A(1) of the Rules. We have gone through the entire case records including order of AO and the order of CIT(A) and noted that only documents not produced by assessee was inward and outward register, which has already corroborated the purchases and sales supported by bills and invoices including challans and lorry receipts. Hence, in our view, we find that the CIT(A) has accepted the books of account because there was no defect pointed by the AO in the books of accounts and moreover, each and every details were produced by assessee before the AO during assessment proceeding, which was considered by CIT(A) in detail. Hence, we confirm the order of CIT(A) accepting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments have still to be decided by BIFR through a scheme of revival. It was stated that by acknowledging the liability existing in respect of sundry creditors, the assessee has acknowledged and going in the balance sheet and all these liabilities in respect of these sundry creditors amounting to ₹ 30,91,95,000/- is existing liability and very much liable to pay. It was also contended that none of the liabilities has been ceased/ remitted and that there are recovery suits filed by most of the creditors against the assessee company since, they have remained unpaid for a longer period of time due to the fact situation that the company has become sick as declared by BIFR vide order dated 21.04.1999. The AO required the assessee to file the details of sundry creditors along with their period of outstanding i.e. ageing of the sundry creditor, which was not furnished. Therefore, the AO added these sundry creditors by invoking the provisions of section 41(1) of the Act being remission or cessation of liability and for that reason the claim of the assessee that BIFR in assessee s case No. 324/1998 order dated 21.04.1999, where assessee s petition for declaring sick company was annulled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, it is matter of fact and the law that the Appellant company is very much under the purview of the BIFR under the SICA, 1985. 5.4.6 In view of the foregoing, I am of the opinion that under section 41(1) of the Act, cessation of a liability can only be taxed when the liability has finally ceased without there being a chance of its revival. In the present case, the Appellant s liability to its sundry creditors is still pending. Further, the same cannot be written back unilaterally by the Appellant unless and until approved by BIFR as the said outstanding liabilities are forming part of DRS pending for approval. Further, the outstanding liabilities of sundry creditors are still being shown under the liabilities in the Balance Sheet of the Appellant Company and the Appellant has not received any communication from such sundry creditors waiving their right to receive the amount. The observations made by the AO are a pure work guess and imagination the AO has not been able to bring on record any fact which shows that liability has ceased to exist. 5.4.7 In view of the facts and findings given in the foregoing paragraphs, I am of the considerate opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i - vi) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in directing the Assessing Officer to allow carry forward and set-off of unabsorbed depreciation of AY 1997-98 to 2001-02 without appreciating that as per the provisions of Section 32(2) as they stood prior to the amendment by Finance Act, 2001 w.e.f 01.04.2002, such unabsorbed depreciation was eligible for carry forward and set off against business profits only for a further period of eight years? vii) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in directing the Assessing Officer to allow carry forward and set off unabsorbed depreciation of AY 1997-98 to 2001-02 by relying on the decision of General Motors India P. Ltd. v/s DCIT (354 ITR 244 (Guj)). Without appreciating that though the Hon ble Supreme Court has dismissed the Department s SLP, it has neither upheld the Hon ble High Court s view nor answered the Revenue s Question? 15. Brief facts are that the AO during the course of assessment proceedings on perusal of annexure to tax audit report in Form No.3CD noticed that the assessee has claimed carry forwa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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