9911796707
TMI Blog2017 (3) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing grounds of appeal:- "1. Ground No. 1 (i) The learned Commissioner of Income Tax (Appeal) [hereinafter referred to as CIT(A)] erred in confirming the addition of a sum of Rs. 2,18,34,299/- u/s. 41(1) of the Income Tax Act 1961. (ii) She failed to appreciate that such liability towards ex-employees was not either remitted or ceased during the year and therefore such amount could not be brought to tax u/s.41(1) of the Act. (iii) She further failed to not take into account additional details provided to her during assessment proceedings and making an adhoc addition of total liability u/s.41(1) of the Act. (iv) The appellant prays that the confirmation of addition of Rs. 2,18,34,299/- as made by the AO is totally unjustifiable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees amounting to Rs. 2,18,34,299/-, which included provision for exgratia, i.e diwali bonus which was payable to an employee after his completion of a year of service. It was however submitted by the assessee that as the retail business sector in which its clients were operating was struggling due to slow business, which in itself was prompted by global melt down and deflation /depression in Indian markets, therefore many employees left the company before being eligible to claim the bonus and other dues, as a fallout of which the provision made in the accounts as on 31/03/2008 for bonus and other dues payable to the employees remained unpaid in the books of accounts. The A.O after deliberating on the aforesaid reply of the assessee, in or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, though deleted the addition made by the A.O on account of cessation of liability u/s.41(1), but thereafter in order to verify the genuineness and veracity of the said outstanding liability of Rs. 2,18,34,299/-(supra), therein called upon the assessee to furnish the documentary evidence in support thereof, viz. the statement of Professional tax (PT) and ESIC paid in earlier period in respect of those very employees for whom the provision of Rs. 2,18,34,299/- was made. That on the failure of the assessee to place on record the requisite documents, the CIT(A) being of the view that despite the fact the assessee was specifically directed to place on record the statements of PT and ESIC, had however evaded to place on record the said requisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,18,34,299/-pertaining to salary and statutory dues payable were reduced to Nil by 31.03.2013, and in support thereof he drew our attention to Page 42 of his 'Paper book' (for short 'APB'). It was further submitted by the ld. A.R that the assessee company had carried out a reversal of the aforesaid provision amounting to Rs. 60 lac and Rs. 1,09,17,273/- in the period relevant to assessment year 2012-13 and assessment year 2013-14, respectively, and the assessments of the assessee for the said respective years had been framed by the department u/s. 143(3) of the 'Act'. Thus in the backdrop of the aforesaid facts it was averred by the ld. A.R that the CIT(A) had most arbitrarily held the provisions of Rs. 2,18,34,299/- as a bogus liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of Rs. 2,18,34,299/- in the hands of the assessee by treating the same as a bogus and unproved liability. 5. We have heard the Ld. Representative of both the parties, perused the orders of the lower authorities and the material produced before us. We have given a thoughtful consideration to the facts of the case and therein find that the sole issue that survives for consideration before us is as to whether the addition of Rs. 2,18,34,299/- pertaining to provision for salary and statutory dues payable, as stood reflected in the balance sheet of the assessee company for the year under consideration, in the backdrop of the aforesaid factual matrix can be held as bogus and unproved liabilities and added to the income of the assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dged and is accepted as such, even then no adverse inference, much the less an addition of the said amount would be called for in the hands of the assessee during year under consideration, for the reason that even if the said liabilities were found to be bogus, the same could only be assessed as an unexplained credit in the hands of the assessee in the year of its genesis, viz. the year in which the same were found to be generated as a credit in the books of accounts of the assessee, and thus could not be whimsically related to and added as the income of the assessee for the year under consideration in which the same had only figured as a B/forward balance. Thus in light of our aforesaid observations, now when we are of the considered view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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