TMI Blog2021 (3) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... rs the stale cheque money back to its accounts if the amount has not been claimed - also that if at all the addition was to be made it cannot be made in the current year but should be made in the year in which these liabilities have arisen - HELD THAT:- As perused the assessment order. The assessee is a public sector company, audited by C AG. The assessee has been following regular system of crediting stale cheques back to the accounts as and when it thinks that the liability has ceased to exist. Therefore, in view of the consistent accounting system followed by the assessee and also due to judgment cited GOODRICKE GROUP LIMITED [ 2011 (5) TMI 127 - CALCUTTA HIGH COURT] and M/S. DLF LIMITED [ 2016 (3) TMI 679 - ITAT DELHI] the additions could not have been made in the current year. In view of the above, I agree with the contention of the A/R. Addition made in the assessment order of interest on income-tax refund - assessee s case is that the interest of income tax refund is reflected as income during the assessment year 2017-18 i.e. when the interest was received and hence an addition of the same amount in the assessment year 2014-15 would tantamount to double addition - HEL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erified and established despite providing adequate opportunities to the assessee. 5. That the appellant craves to add, alter/or amend any of the grounds of appeal during the course of hearing. 3. The grounds raised by the assessee are as follows: 1. That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming 50% of the disallowance made in the assessment order on outstanding accumulated balance of material advances as on 31.03.2005 received from the State governments (₹ 4,89,20,514/) which were carried forward in the books of account of the appellant as on 31.03.2014. 2 That on the facts and in the circumstances of the case and in law, the Ld. CIT(A), in connection with ground no. (1), erred in rejecting the books of accounts of the appellant on the contention that appellant had not followed proper accounting for old outstanding liabilities by not settling the same. 3 That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming 50% of the disallowance made in the assessment order on outstanding accumulated balance of mobilisation advances as on 31.03.2005 received from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as Revenue are aggrieved by this order and have filed cross-appeals. 6. We first take up the Revenue appeal. Ground No.1 to 3 are on the issue of grant of part relief to the assessee by the ld. CIT(A) on the addition made on account of unascertained liabilities, advances received from Government authorities. The Assessing Officer discussed the issue at page 4 para 7 as under: 7. Cessation of Unascertained Liabilities During the course of assessment proceedings on perusal of Independent Auditors Report it was seen that in page 25 at 4(g) the auditors has comment that in relation to balances pertaining to the period before 1st April 2005 appearing under following heads in the balance sheet the names of persons to whom such amounts are payable could not be furnished by the company : Note 6: Other Long Term Liabilities Advance from contractor ₹ 4,89,20,514.00 Other Payables ₹ 46,84,08,872.00 Note 10 : Other Current Liabilities Advance from contractees ₹ 9,45,62,004.00 In this regard the assessee company was asked in this office letter No. 820 dated 30.11.2016 [vide Point (c)] to explain and ascertain regarding wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding addition of ₹ 46,84,08,872/- being amounts shown by the assessee under the head other long term liabilities. It is seen that these liabilities are also outstanding since 31st March, 2005. However, the assessee it seems is not following correct accounting process by settling the old accounts payable. Normally most of the old payables did not materialize. Therefore, in my opinion, the books of the accounts of the assessee are not reliable and seem need to be rejected. The A.O. is directed to add 50% of such outstanding shown under this head as lot of these outstanding would final not materialize regarding the Assessing Officer s attempt to tax this amount u/s 41(1). In view of the case laws relied by the ld. A/R the amount cannot be taxed u/s 41(1) unless the assessee suo moto writes back this amounts in its books of accounts. In the result, ground no.2(a) 2(b) are partly allowed. 8. The issue is whether the addition in question can be made u/s 41(1). The ld. CIT(A) has already concluded that no additions can be made u/s 41(1) of the Act. He agreed that the propositions of law cited by the assessee are in its favour and hence addition u/s 41(1) of the Act is bad in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee had nothing to offer on the aforesaid liabilities and furnish any specific evidence on such liabilities. Therefore the assessee's liabilities on stale cheque amounting ₹ 53,75,000/- is treated as unascertained liabilities and ceased to exist and added to assessee's total income for the year under consideration. Penalty proceedings u/s 271(1)(c) of the Income Tax Act has been initiated separately for furnishing inaccurate particulars of income. 10. The ld. CIT(A) has dealt this issue and held in para 4.2 at page 5 are as follows: 4.2 The ld. AR has submitted that the assessee from time to time transfers the stale cheque money back to its accounts if the amount has not been claimed. The Ld. AR has also stated that if at all the addition was to be made it cannot be made in the current year but should be made in the year in which these liabilities have arisen. The AR has quoted the judgment of DLF Ltd. ITA 2677/Delhi/2011 and Goodricke Group Ltd. 338 ITR 116(Cal.). I have perused the assessment order. The assessee is a public sector company, audited by C AG. The assessee has been following regular system of crediting stale cheques back to the accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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