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TMI Blog2017 (3) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... ined 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 that the aforesaid liabilities can neither be characterized as bogus liabilities, nor any adverse inferences as regards the same are liable to be drawn in the hands of the assessee company during the year under consideration - Decided in favour of assessee - I.T.A. No.1195/Mum/2014 - - - Dated:- 24-2-2017 - SHRI B.R BASKARAN, AM AND SHRI RAVISH SOOD,JM For The Appellant : Shri Farrokh Irani For The Respondent : Shri Prashottam Kumar (Sr. A.R) ORDER PER RAVISH SOOD,JM: The present appeal filed by the assessee company arises out of the order passed by the CIT(A)-13, Mumbai, dated 01.01.2014, which in itself arises from the order passed by the A.O u/s. 143(3) of the Income Tax Act 1961 (for short Act ), dated 14.01.2013. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry dues payable to employees amounting to ₹ 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 order to verify the genuineness and veracity of the facts projected before him, therefore called upon the assessee to place on record the confirmations from the employees to whom salary was shown as payable. The assessee however failed to place on record the requisite confirmations of the employees, which thus led the A.O to conclude that the aforesaid liability of ₹ 2,18,34,299/- had ceased to exist u/s. 41(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he government authorities, therefore concluded that the said respective liabilities were never in existence, and therein upheld the addition of ₹ 2,18,34,299/-by characterizing the same as bogus and unproved liabilities. 4. That during the course of the hearing of the appeal the Ld. Authorized Representative (for short A.R ) at the very outset of the hearing of the appeal therein submitted that the Grounds of appeal no. 1 (i) to (iii) were not being pressed. Thus in light of the aforesaid concession on the part of the ld. A.R, the aforesaid grounds of appeal are dismissed as not pressed. The ld. A.R thereafter adverting to the Ground of appeal no. 1(iv), therein assailed the addition of ₹ 2,18,34,299/- which had been confirmed by the CIT(A) by concluding that the same were not payable at all at any point of time, and hence could safely be characterized as bogus liabilities. It was submitted by the ld. A.R that the provision of ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue that survives for consideration before us is as to whether the addition of ₹ 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 company for the year under consideration. We have given a thoughtful consideration to the facts of the case and are of the considered view that now when the assessee had reversed the aforesaid provisions of ₹ 2,18,34,299/- in the succeeding years, and had resultantly reduced the same to Rs. Nil as on 31.03.2013 (Page 42 of APB), which factual position had thereafter been scrutinized and accepted by the department in the course of regular assessments framed u/s 143(3) in the hands of the assessee company for A.Y 2012-13 and A.Y 2013-14, which respective years had witnessed a reversal of provision of ₹ 60 lac and ₹ 1,09,17,273/-, therefore we are of the considered view that in the backdrop of the aforesaid facts no adverse inferences as regards the genuineness of the aforesaid p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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