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TMI Blog2012 (9) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... mentions as below: "As per the Deed of Assignment dated 10.01.2007, the assessee has already received a sun of Rs. 4,36,37,583/- against all right, claim, title, interest, estate, demand to the debt and the underlying financial instruments. As nothing more to receive by the assessee, the real income has only to be offered to taxation. The real income i.e. 4,36,37,583/- has already been offered for taxation. C. The Appellant craves, leave to add, alter and amend any or all grounds of appeal before or during the proceedings of the appeal." Revenue's Ground: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by AO for Rs.3,44,91,214/- u/s. 41(1) of the I.T. Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not allowing AO to verify the fresh evidence submitted by appellant u/r 46A of the I.T Rules 1962 during the Appellate proceedings. 3. The appellant prays that the order of the CIT (A) on the above grounds be reversed and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary." 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,33,396/- being debt receivable only was not assessable to income. 2.3 It is also the case of the assessee that he has not received any other amount except a sum of Rs.4,36,37,583/- from "Grand" and sum of Rs.1,69,03,620/-(from "Swadeshi") in the shape of goods. Thus in short the case of the assessee is that whatever extra amount has been received by the assessee from recovery of the dues of Rs. 4,36,37,583/- has been declared as income. No amount other than above has been received after the assigning of the debt. There is no provision in the assignment deed to receive any extra amount as the extra recovery, if any, will be appropriated by "Grand" only as per terms of the assignment deed. 2.4 The aforementioned facts relate to the issue raised by the assessee in his appeal and so far as it relates to the issue raised by the revenue in its appeal, the facts are that it was noticed by the AO that in the balance sheet as on 31/3/2007 the assessee had shown sundry creditors aggregating to an amount of Rs. 3,44,91,214/- and said amount was added by the AO in the income of the assessee under the provisions of section 41(1) of the Income Tax Act,1961. The addition is also made for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y amount, therefore, the said decree was assigned to "Grand" from whom the assessee had received only a sum of Rs.4,36,37,583/- vide cheque No.635304 dated 10/1/2007 towards assigning of the aforementioned decree. Ld. A.R in this regard referred to the order of the Official Liquidator, copy of which is placed at page - 17 of the paper book and also the letter of "Grand", copy of which is placed at page-1, of the paper book. He also referred to the copy of deed of assignment entered into by the assessee with "Grand" which is placed at page 2 to 11 of the paper book and also the copy of Summary Suit filed in the High Court, which is placed at pages 12 to 16 of the paper book. He submitted that no notional income could be assessed as assessee has not received any amount which has not been either disclosed as income or is receivable as debt. He, therefore, submitted that the addition of Rs. 3,70,32,126/- has wrongly been confirmed by CIT(A) and the same is required to be deleted. 4. On the other hand, ld. D.R relying upon the order passed by AO & CIT(A) vehemently pleaded that addition has rightly been sustained by CIT(A). He submitted that the assessee had undisputedly got a right to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , A.O has made the addition of Rs.3,70,32,126/-. Against the aforementioned case of AO it is the case of the assessee that though the amount of Rs.8,06,69,709/- was allowed by the Official Liquidator but nothing has been received by the assessee till date. The assessee had assigned the aforementioned amount by way of an agreement to "Grand" and what is received by the assessee is only a sum of Rs.4,36,37,583/- out of which assessee had already recovered a sum of Rs. 1,69,03,619/- which was declared under section 41(4) of the Act and no other amount was required to be added to the income of the assessee. Thus the assessee is assailing the action of the AO for addition of Rs.3,70,32,126/-. 6.1 Before, proceeding further it will be relevant to reproduce the order of Official Liquidator. "NOTICE OF ADMISSION OF PROOF "To Mr. Narendra, S/o. Ramdeo Lath, M/s. Anand Trading, 182/A, Anand Vatika, 15th Road, Chembur, Mumbai - 400 071. Subject:- Your Claim No. For 8,33,74,831/- Sir, You are hereby informed that your claim against the above company has been allowed for a sum of Rs.8,06,69,709/- as Ordinary claim against your for Rs.8,33,74,831/- the balance amount has been rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own name and rights and as an assignee and not merely as a representative or agent of the Assignor." 6.3 In view of the above position it cannot be said that assessee could ever receive the aforementioned amount of Rs. 8,06,69,709/-. The said amount cannot also be said to have accrued to the assessee as what has been ordered by the Official Liquidator is the notice of admission of proof and not the admission of the payment to be made of the said amount. The payment of the said amount will depend upon several other circumstances and it is a matter of fact that till date the assessee had not received any amount. It is also a matter of fact that after almost one year the claim was assigned to other party who only has the right to receive the claim, if any, given in the name of the assessee. Therefore, we are of the opinion that the aforementioned amount having not been received or accrued to the assessee cannot be taxed in the hands of the assessee. Now the question arise that while making the addition the AO has observed that the amount of Rs.5,39,35,745/- was to be deemed as income of the assessee under section 41(4) of the Act. From these observations of the AO, it is not clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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