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TMI Blog2017 (4) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... re. We deem it appropriate to reject assessee’s argument that it has been entertaining its coupon holders’ claims and conclude that the express terms indicated in the coupons in question could not be further given a wider meaning than the specified one. Our detailed discussion hereinabove makes Shri Manish Shah to once again vehemently argue that the impugned liability; if at all is to be added u/s.41(1) of the Act, has not ceased to exist in the impugned assessment year as the period of one year after issuance of the relevant coupons has expired much earlier which is not liable to be accepted as section 153 of the Act prescribing time limit of completion of assessment very well deals with such an instance where the Assessing Officer concerned can reopen assessment in an assessee’s case in consequence to this tribunal’s findings. We notice that a co-ordinate bench in Mosbacher India Chennai vs. Addl.DIT [2016 (12) TMI 235 - ITAT CHENNAI] explains ambit of the above statutory provision in such a case wherein it can be clearly held that the amount in question in assesseble as income in earlier assessment year - Decided against assessee. - ITA No.1145/Ahd/2016 - - - Dated:- 10-1-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entitled to receive T.V. set. In case, a person who has already paid ₹ 500/- is unable to enroll four persons, the person who has paid ₹ 500/- will not lose ₹ 500/- abut he will also be entitled to T.V. set if he pays ₹ 2,125/- less ₹ 500/- already paid i.e. he will have to pay ₹ 1,625/- only. Therefore, under this scheme, no one has to lose any amount, provided he had decided to purchase a T.V. set. If he purchases coupons of ₹ 500/-, ₹ 1,000/- or ₹ 1,500/- he will have to pay ₹ 2,125/- less the value of the coupons already purchased by him. Thus, it clearly appears that this is a scheme for marketing the T.V. sets and the persons who help in marketing the T.V. set are being remunerated in the sense that they get T.V. set at a price which could be less than ₹ 2,125/-. 3. The Assessing Officer framed a regular assessment on 06.02.2015 treating the abovesaid outstanding customers advances to be liable to be assessed as its income u/s.41(1) of the Act after concluding that the same had ceased to exist inter alia on the ground that it had not sold a single item nor received any amount at least since 2008-09 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r will have maximum time limit of 12 months period from the date of his enrollment as a customer. The validity of the proposal/discount form will automatically expire after the date, therefore, you must take full advantage of the value of the discount form before the expiry date. It is also stated that on request, the validity date can extend . (ii) The outstanding amount as on 31.3.2012 dates back nearly 12 to 15 years when the company was manufacturing Black White TV sets. Since 1988-89, the company is no longer engaged in manufacturing and is now into trading of goods. A perusal of the sample forms submitted during appellant proceedings shows that these are more than 10 years old and are not verifiable either, since the addresses of the so-called customers only refer to their tehsils and districts. There are no signatures on these invoices. (in) The courier or letters sent by post to the customers to establish that the appellant is still in correspondence with them and to establish that the liability still exists, have all been issued by the appellant after the commencement of assessment proceedings and after the AO raised a query in respect of the impugned addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Housing Bank Bonds - ₹ 1,00,25,371/-; Advance to Private Parties - ₹ 1,09,25,172/-, Other Deposits and Advances - ₹ 25,22,468/-, etc. (vii) The appellant has claimed that its customers have pledged their support to the appellant, till launch of the appellant's portal. Once again, these are lofty claims and remain as such, without anything to substantiate the same. No communication from the appellant to the customers or from its customers to the appellant have been submitted. Further, another pertinent point is that the appellant's customer base must be much larger than the 'customers' whose money is lying with the appellant. It is only these 'customers' that are relevant to the current proceedings and not the entire customer base of Gujtron Electronics which is being referred to time and again by the appellant. (vii) The appellant has also claimed that it was in the process of launching its new portal and therefore could not follow up on the scheme with its customers. It is difficult to understand and accept that in this age of technology, the appellant's portal has been in the making for more than 5 years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring his intention not to honour his liability when payment is demanded by the creditor, or by a contract between the parties, or fay discharge of the debt. The above cases , however, cannot apply to the present case. The facts of the instant case are similar to those in the case before the Hon Supreme Court referred to supra, in that the liability has remained unpaid for 10-15 years and having regard to the long lapse of time and in the absence of any steps taken by the creditors to recover the amount, it was sought to be held that there was a cessation of the debts bringing the case within the scope of Section 41(l). As can be seen from the para reproduced above, the Hon Supreme Court had held that a remission can be granted only by the creditor and a cessation of the liability can only occur either by reason of operation of law or the debtor unequivocally declaring his intention not to honour his liability when payment is demanded by the creditor, or by a contract between the parties, or by discharge of the debt. In this case, the above conditions can never be satisfied, since as far as the creditors are concerned, the scheme under which they had paid ₹ 500/- each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of ₹ 500/- from the appellant. The appellant however very conveniently is still showing these amounts as its liability though it itself is not clear as to whom it has to repay this money. Moreover, as quoted from the advertisement taken out by the appellant itself while launching this claim, it has been clearly stated in the same that the scheme would lapse in 12 months and that no refunds given. Thus, it is very clear from this advertisement itself that the customer would forgo the ₹ 500/- coupon, if he or she did not claim the same within a year. 3.2.5 Not only this, the appellant has used the entire money as its own money over the years and as mentioned in para 3.2.1 (vi) above, has made substantial investments out of this money. It has received interest on the same and has also paid taxes on the same. Thus, it is very clear that this amount is being treated as its own income by the appellant. These circumstances and facts are very different from the facts in all the case-laws relied on by the appellant and therefore cannot be applied to the appellant's case. Thus looking at the totality of facts and the detailed discussion above, and considering: the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question is valid for a clear-cut expressly stated time period of one year wherein the coupon holder is otherwise nowhere in picture. We deem it appropriate to reject assessee s argument that it has been entertaining its coupon holders claims by quoting the classic case of Carlill vs. Carbolic Smoke Ball Co. Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1 and conclude that the express terms indicated in the coupons in question could not be further given a wider meaning than the specified one. 7. Shri Shah at last quotes hon ble jurisdictional high court s decision in [2012] 22 taxmann.com 59 (Guj.) CIT vs. Nitin S. Garg that the mere fact of these credits being very old not indicating any interest there upon are not to be added u/s.41(1) of the Act. We find the same to be not applicable in facts of the instant case wherein we have already concluded that assessee s liability in question in the nature of customers advances were valid for a period of one year only as per the terms indicated in the relevant coupons. 8. Our detailed discussion hereinabove makes Shri Manish Shah to once again vehemently argue that the impugned liability; if at all is to be added u/s.41(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the particular assessee and in relation to the particular assessment year. To be a necessary finding, it must be directly involved in the disposal of the case. It is possible in certain cases that in order to render a finding in respect of A, a finding in respect of B may be called for. For instance, where the facts show that the income can belong either to A or B and no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A's income. A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A. If, however, the finding as to A's liability can be directly arrived at without necessitating a finding in respect of B. then a finding made in respect of B is an incidental finding only. It is not a finding necessary for the disposal of the case pertaining to A. The same principles seem to apply when the question is whether the income under enquiry is taxable in the assessment year under consideration or any other assessment year. [Emphasis, by underlining, supplied by us] Coming back to the facts of the case before us once again, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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