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TMI Blog2012 (7) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... tal liability - income u/s 2(24) – Held that:- Without doubt, the nature of the liability stands to be determined independently, and the fact of the sum being credited to the running account of the said party, though relevant, cannot be considered to be conclusive or determinative of the matter, as assumed by the Revenue. - In any case, if it, as contended, represents a loan liability, i.e., on capital account, its write back would without doubt be only a capital receipt in the hands of the assesseecompany. - matter restored to the file of AO. Disallowance u/s. 36(1)(va) r/w s. 2(24)(x) of the Act - payment of the employee’s contribution to the Provident Fund being made by the assessee belatedly – Held that:- Payment in respect of the em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Alwar ( CIT (A) for short) dated 08-08-2011, partly allowing the assessee's appeal contesting its assessment u/s. 143(3) of the Income Tax Act, 1961 ( the Act hereinafter) dated 29-12-2009 for the assessment year (A.Y.) 2007-08. We shall take up the Revenue s appeal, being senior, first. 2. The first ground relates to the deletion of the addition made in respect of old credit balances outstanding in the account of importer/s, for having been written back by the assessee in its account during the current year. The basis of the addition by the Assessing Officer (AO) is that the credit/s represented a trading liability, so that the profit on its write back was only revenue in nature. Before the ld. CIT(A) it was contended by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second issue agitated by the Revenue is in respect of disallowance in the sum of Rs. 6,33,372/- u/s. 36(1)(va) r/w s. 2(24)(x) of the Act in view of the payment of the employee s contribution to the Provident Fund being made by the assessee belatedly, i.e., beyond the due date by which the same is to be paid (to the credit of the respective employees) under the relevant, the PF Act. The ld. CIT(A) allowed the assessee's claim relying on the various decisions mentioned at para 8.2, page 6 of his order; the payment/s having been admittedly made before the due date of filing the return of income. Aggrieved, the Revenue is in appeal. 5. We have heard the parties, and perused the material on record. The contravention of the provision of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the confirmation of the addition in the sum of Rs. 45.00 lacs, representing a part of the waiver (at 90%) of the credit balance outstanding in the account of, among others, M/s. Dhir Dhir Associates, the assessee's legal advisor, since written back in accounts. While the addition by the AO was on the basis that the said waiver represented a trading/revenue receipt, and found confirmation by the ld. CIT(A) on the same basis, the assessee's case is that the credit balance in the account of M/s. Dhir Dhir Associates, i.e., Rs. 59.39 lacs (PB page 8 18), which stood written back to the extent of 90% consequent to the BIFR order, included Rs. 50 lacs by way of a loan received on 16-03-2006 (PB page 15). The write back in the accounts is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id party, though relevant, cannot be considered to be conclusive or determinative of the matter, as assumed by the Revenue. We find there has been no such independent examination in the matter by it; the assessee also not leading any evidence/s in its respect. In fact, the ld. AR was specifically questioned by the Bench during hearing with regard to having adduced any confirmation as to the nature of the liability to M/s. Dhir Dhir Associates, to an answer in the negative. It must, at the same time, be appreciated that the close associate has only lost its capital to that extent, the treatment of which amount in its accounts, as also its tax return/s, may also be relevance, i.e., inasmuch as it clarifies or exhibits the nature of the sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s account being at net of TDS, while the ld. DR relied on the orders by the authorities below. 10. We observe that the case of Revenue is de hors the facts which are required for the application of the provision of section 40(A)(2)(a) of the Act. Rather, it would appear to us that the Revenue, on whom the onus lies in this regard, has even not show caused the assessee in the matter. Merits apart, the onus u/s 40(A)(2) being directly on the Revenue, we find that the same has not been discharged by it in any manner. For, a satisfaction of the ingredients of the section would require an analysis of the services provided, and (further) categorizing them into various components, as (say): retainership, foreign exchange matters, appearance fee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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