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TMI Blog2020 (2) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... onal evidences furnished by the assessee without appreciating the fact that the Assessing Officer had already given 12 opportunities to the assessee and thus there was no violation of natural justice and hence, CIT(A) should not have admitted additional evidence filed by the assessee company without any cogent explanation for such utter failure on its part. ii) Whether on the facts and circumstances of the case and in law, was the ld. CIT(A) justified in admitting additional evidences furnished by the assessee without appreciating the fact the AR of the assessee company gave a false statement under oath that the relevant document are lying with the Sales Tax Department which was completely untrue and baseless and when confronted with this fact, he was not able to give any plausible reason or justification for such a baseless and false statement given under oath during the assessment proceedings. iii) Whether on the facts and circumstances of the case and in law, was the Ld. CIT(A) justified in holding that the rejection of books of accounts by the AO is incorrect without going into the totality of facts as detailed in the assessment order and also ignoring the contents of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to notice dated 10.12.2013. i. Date of hearings as mentioned in the order sheet. ii. The list of the Original and Xerox documents as called by your office along with date of notice. iii. The list of original and Xerox documents submitted by the assessee during the proceedings along with the date of submission in your tapal or directly to you." 4. The Deputy Commissioner of Commercial Tax, Sector III, Mathura, Uttar Pradesh, replied to the above notice vide reply dated 11.03.2014 and AO noted that the documents were produced before him but it seems that the AO's finding is contradictory. On 10.03.2014, the assessee before the AO produced original purchase and sale bills finalize along with lorry receipts and delivery challans but stated that these files are required at Mathura for reconciliation purpose and for submission before the Sale Tax Authorities. Therefore, he undertook the Xerox copies of these 15 files. The AO again recorded statement of Shri Ravindra Chaturvedi, Manager (Taxation) on 18.03.2014, which is reproduced in Para 3.4 of the assessment order at Pages 5 and 6. In view of the above, the AO noted that the assessee failed to furnish complete original documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..........................." 6. He rejected the books of accounts and applied the profit rate at the rate of 31.63% as against declared GP rate at the rate of 28.73%. Thereby, the AO made addition of Rs. 80,75,744/-. Aggrieved, assessee preferred the appeal before CIT(A). 7. The CIT(A) after going through the submissions of the assessee and details noted that the assessee has filed complete details and this being a BIFR company and there was communication gap between the AO and the manger taxation of the assessee in regard to production of documents particularly inward and outward registers. Hence, he accepted the claim of assessee and deleted the addition. Aggrieved, Revenue is in appeal before Tribunal. 8. We have heard rival contentions and gone through the facts and circumstances of the case. We noted that the assessee before the AO filed the details and documents called for by the AO i.e. details of party wise sales and purchases, copies of purchase and sales along with delivery challans and lorry receipts which is filed before us now at paper book 2 page 127. The assessee has filed complete summary of dates and details filed during the course of assessment proceedings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on March 18, 2014). 17. 24/03/2014 Financial Comparable from FY 2006-07 to 2010-11, Note of Nature of Purchase and Sales. 9. From the above, we noted that only inward and outward register could not be produced before the AO during the course of assessment proceedings but in any case, the inward and outward register only corroborates the purchases and sales and for that purpose, the assessee has already produced bails and invoices including the delivery challans/ lorry receipts during assessment proceedings. We noted that even the AO has impounded several of such invoices/ bill files and the AO has not doubted the genuineness or veracity of purchases / sales documents. The AO has not commented adversely on any purchases/ sales documents 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 ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de letter dated 16.01.2014 stated that the assessee is a sick industrial unit declared by BIFR vide order dated 21.04.1999. Further, the assessee vide letter dated 21.01.2014 furnished the summary of sundry creditors in respect of assessee's Mumbai unit with a total sum of Rs. 12,23,91,420/-. The assessee also filed information received in respect of sundry creditors containing names with respect of closing balance totaling to Rs. 78,23,291/-. Further, vide letter dated 27.01.2014, the assessee furnished ledger account of sundry creditors reflected in the balance sheet in the relevant year. The assessee also claimed that it has not written back any of the sundry creditors in its books of account as their payments 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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd concession asked by the assessee company in the draft rehabilitation scheme, which proves that the assessee is still a sick company and its revival plan is still pending, hence, the CIT(A) noted that even in the balance sheet, assessee has acknowledged liability to pay to its sundry creditors which is still pending. The CIT(A) by observing in Para 5.4.5 and 5.4.6 and 5.4.7 deleted the addition by observing as under: - "5.4.5 Moreover, vide its order dated 05.07.2015 Hon'ble BIFR has finalized the Draft Rehabilitation Scheme (DRS) in the case of the appellant company which have been circulated on 23.09.2015 and necessary newspaper publications have also been issued. Therefore, 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 unle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist 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. 14. The next issue in this appeal of Revenue is against the order of CIT(A) directing the AO to allow carry forward and set off of unabsorbed depreciation relating to AY 1997-98 to 2001-02 despite the fact that the provisions of section 32(2) as they stood prior was amended by Finance Act, 2001 with effect from 01.04.2002. For this, Revenue has raised the following ground No. vi and vii - "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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