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TMI Blog2014 (6) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... d the claims preferred is only on the assessee – assessee have furnished a certificate with regard to the account statements being furnished before the assessing authority as well as the CIT(A), and which could be false only at the risk of perjury and the confirmation of the additions being adjudicated – thus, the matter is required to be remitted back to the AO for verification of the Assessee claim – Decided in favour of Revenue. - I.T.A. No. 4545/Mum/2012 - - - Dated:- 23-5-2014 - Shri Sanjay Arora, AM And Shri Amit Shukla,JM,JJ. For the Appellant : Shri R. K. Sahu For the Respondent : Shri Vimal Punmiya ORDER Per Sanjay Arora, A. M.: This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals)-17, Mumbai ( CIT(A) for short) dated 16.04.2012, partly allowing the assessee s appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ( the Act hereinafter) for the assessment year (A.Y.) 2007-08 vide order dated 30.12.2009. 2. The only issue arising in the instant appeal is the maintainability in law of the addition u/s. 41(1) of the Act qua trade credits in the sum of Rs.12,16,920/- reflecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiary value u/s.34 of the Evidence Act, the presumption in law would only be that the outstanding liability indeed continues to obtain as at the relevant year-end. So, however, when the liability continues to subsist year after year, for several years, serious and valid doubts as to its existence or as representing an extant liability, would arise. This is as in the very nature of events nobody would ordinarily, i.e., without justifiable reason, not claim his dues, representing his hard earned money or capital built up over years. Then, again, why would one not agitate the matter or take legal recourse to effect recovery. That is, the said presumption fails on the test of human probabilities in the facts and circumstances of the case. Of course, there could be genuine and valid reasons obtaining in a particular case, so that a credit though outstanding in the books for long, represents a genuine liability. Why, loans on interestfree basis or toward risk or seed capital by way of subscription to shares, is given with no time prescribed for its return back or even any stipulation with regard to return thereon. Again, in a given case it could be that the liability remains to be recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case. Reference was made both by the hon ble court as well as the tribunal in the afore-referred decisions to the decision in the case of Kesoram Industries Cotton Mills Ltd. vs. CIT [1992] 196 ITR 845 (Cal.) to the effect that the non-discharge of a liability over a long period of time, coupled with absence of any dispute and/or of legal recourse, would lead to a firm basis to infer remission or cessation of liability. Reference, with approval, was also made by the hon ble court, which stands followed by the tribunal as in the case of ITO vs. Shailesh D. Shah (in ITA No.7012/Mum/2010 dated 11.12.2013) and Yusuf R. Tanwar vs. ITO (in ITA No.8408/Mum/2010 dated 28.02.2013), to the decision in the case of CIT vs. Agarpara Co. Ltd. [1986] 158 ITR 78 (Cal.). Accordingly, an omission to pay could give rise to the legal inference of cessation of liability. In our clear view, therefore, even as observed during hearing, the decision in the case of Hotline Electronics Ltd. (supra) would not be of much assistance to the assessee. The matter would, therefore, have to be decided in light of the conspectus of the facts of each case. 3.2 Continuing further, the assessee failing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lwal Engineering (PB pg.31). Could a liability continue to outstand for years without any reason, and reasons for which could only be explained or furnished by the assessee, the debtor? Secondly, the assessee also fails to furnish any confirmation from the said parties toward their outstanding before the assessing authority, even as it does so in respect of the other two credits, also observed as outstanding for over three years, and which therefore stood deleted by him. On such questions being raised to the ld. counsel during hearing, raising genuine doubts as to the existence of the liabilities, he would draw our attention to the statements of account of both the parties for f.y. 2008-09 (PB pgs.29-30, 32), which reflect discharge of the total liability thereto during the said year in cash, albeit in small sums ranging from Rs.10,000/- to Rs.18,000/- each. The said documents are certified (by the ld. AR) to have been furnished before both the A.O. as well as the ld. CIT(A). This is quizzical indeed. The payments to the parties having been made during f.y. 2008-09, why did the assessee not state so to the A.O., before whom the proceedings were on at the relevant time, particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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