9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 493 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - assessee had shown an amount under Other payables being payable to M/s. Niharika Impex Pvt.Ltd - nature of loan/payments was not clear from the submissions received. - HELD THAT -As contention of the assessee that the amount in question was not paid during the year under consideration in support of this and relied on ledger A/c of M/s. Niharika Impex Pvt.Ltd. This fact needs verification at the end of AO. We therefore, restore this issue to AO for decision afresh. If the AO finds that the amount was not paid during the year under consideration, he shall delete the addition. This Ground of assessee s appeal is allowed for statistical purposes. Addition u/s 41(1) of cessation of liability - discharge of liability towards the outstanding creditors - HELD THAT - The assessee stated that she was unable to discharge her liability towards the outstanding creditors and other payables as all the bank account of the assessee have been attached by the Income Tax Department and as a result, the assessee had been put to lot of inconvenience. The amount was withheld during the course of business payments and there is no cessation of liability as such. The contention of the assessee is that the liability is still subsisting hence, it can not be treated as income of the assessee. Therefore, looking to the totality of facts, the question whether the liability was subsisting, needs verification. AO is hereby directed to carry out necessary verification by making necessary inquiry. Needless to say that AO would afford adequate opportunity to the assessee. Ground No.2 raised by the assessee is allowed for statistical purposes. Addition u/s 41(1) of the Act on account of cessation of liability - HELD THAT - We find that it is the contention that liability has been subsisting, this needs verification by the AO. We therefore, direct the AO to verify the claim of the assessee that the impugned liability is still subsisting and if he finds that the liability is still subsisting, he would delete the addition. Thus, Ground No.3 raised by the assessee is allowed for statistical purposes.
Issues Involved:
1. Deemed Dividend Addition under Section 2(22)(e) of the Income Tax Act. 2. Cessation of Liability Addition under Section 41(1) of the Income Tax Act for Rs.32,61,337. 3. Cessation of Liability Addition under Section 41(1) of the Income Tax Act for Rs.76,29,910. 4. Condonation of Delay in Filing Appeal. Issue-wise Detailed Analysis: 1. Deemed Dividend Addition under Section 2(22)(e): The assessee contested the addition of Rs.4,70,000 as deemed dividend under Section 2(22)(e) of the Income Tax Act. The AO had treated the amount as deemed dividend, which was confirmed by the CIT(A). The assessee argued that no payment was received during the relevant year and relied on the Bombay High Court judgment in CIT vs. Parle Plastics Ltd. The Tribunal found merit in the assessee's contention that the amount in question was an opening balance and not a transaction during the relevant year. The Tribunal directed the AO to verify this fact and delete the addition if the amount was not paid during the year under consideration. 2. Cessation of Liability Addition under Section 41(1) for Rs.32,61,337: The assessee challenged the addition of Rs.32,61,337 under Section 41(1) on account of cessation of liability. The AO had made this addition, which was partly confirmed by the CIT(A). The assessee provided detailed submissions and confirmatory certificates from creditors to argue that the liabilities were still subsisting. The Tribunal found that the AO needed to verify whether the liabilities were indeed subsisting and directed the AO to carry out the necessary verification and delete the addition if the liability was found to be subsisting. 3. Cessation of Liability Addition under Section 41(1) for Rs.76,29,910: The assessee also contested the addition of Rs.76,29,910 under Section 41(1) on account of cessation of liability. The AO had made this addition, which was confirmed by the CIT(A). The assessee provided ledger accounts and confirmatory certificates from creditors to support the claim that the liabilities were still subsisting. The Tribunal directed the AO to verify the claim and delete the addition if the liabilities were found to be subsisting. 4. Condonation of Delay in Filing Appeal: The appeal filed by the assessee was delayed by 272 days. The assessee sought condonation of the delay, relying on the Hon'ble Supreme Court's order in Suo Motu Writ Petition (Civil No.3 of 2020) and Miscellaneous Application 665 of 2021. The CIT DR opposed the condonation. The Tribunal, considering the Supreme Court's order extending the period of limitation due to the COVID-19 pandemic, condoned the delay and admitted the appeal for hearing. Conclusion: The Tribunal allowed the appeal for statistical purposes, directing the AO to verify the claims regarding the subsistence of liabilities and the deemed dividend transaction. The Tribunal emphasized the need for proper verification and adherence to judicial precedents in making additions under Sections 2(22)(e) and 41(1) of the Income Tax Act.
|
