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TMI Blog2016 (9) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... riate to restore this issue to the file of Assessing Officer with direction to re-decide this issue by giving reasonable sufficient opportunity of being heard to the assessee. We, accordingly, set aside the orders of the authorities below and restore this issue to the file of Assessing Officer with direction to re-decide Addition u/s 40(a)(ia) - payments on account of brand charges - non deduction of tds - Held that:- As brand charges were paid to sister concern M/s Meera Moti Spices Pvt. Ltd. who have declared the amount in question in their return of income and paid the taxes. Therefore, when by filing Income Tax Returns and offering sum received for taxation, disallowance would not be justified and matter may be remanded to the Assessing Officer for re-examination in view of decision of Delhi High Court in the case of CIT Vs Ansal Land Mark Township P. Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] - ITA No. 739/Chd/2013, ITA No. 756/Chd/2013, ITA No. 568/Chd/2013, ITA No. 750/Chd/2013 - - - Dated:- 20-9-2016 - Bhavnesh Saini (Judicial Member) And Annapurna Gupta (Accountant Member) For the Appellant : Sudhir Sehgal, Ashok Goyal For the Respondent : Manjit Singh, DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early revealed the receipt of material from the suppliers duly acknowledged by the purchase bills and payments on the debit side which was evidenced from the bank statements. These are running accounts in the ledger. During appeal proceedings, year-wise list of sundry creditors for financial years 2002-03 to 200809 indicating the amount outstanding at the end of each year was filed in the Paper Book. However, only some confirmations were filed as it was contended that period under consideration is as old as 3-10 years, so obtaining confirmations was difficult. It was also contended that these are running balances which have been squared up in subsequent assessment years. The ld. CIT(Appeals) also noted that in assessment year under appeal i.e. 2007-08, the Assessing Officer made addition of fresh sundry creditors for non furnishing of confirmations/bills. 6. The ld. CIT(Appeals) in his findings observed that some of the confirmations furnished now have been sought for admission as additional evidence on the ground of non providing of reasonable opportunity. The ld. CIT(Appeals) found that Assessing Officer while disposing off appeal for assessment year 2009-10 had accepted the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted and outstanding amounts have been paid in subsequent year. The ld. counsel for the assessee referred to the chart of sundry trade creditors from 31.03.2003 to 31.03.2009 in the Paper Book which is filed at page 4 to 7 of the Paper Book. He has submitted that in assessment year 2007-08, the assessee has running accounts of the trade creditors and paid the balance amount in subsequent year. He has, therefore, submitted that on the same reasoning as adopted by ld. CIT(Appeals) for assessment year 200304, the entire addition should have been deleted. It is also stated that the departmental appeal for assessment year 2003-04 have been dismissed by the Tribunal in group cases. 8(ii) On the other hand, ld. DR relied upon orders of the authorities below and relied upon decision of the Madhya Pradesh High Court in the case of V.I.S.P. (P) Ltd. Vs CIT 265 ITR 202 in which it was held that if liability shown in the account is found bogus, then amount can be added towards the income of the assessee. 9. We have considered rival submissions. It is a case of search and it is not indicated if any material was found during the course of search against the assessee to prove that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors in assessment year under appeal, are assessed by the same Assessing Officer, therefore, facts should have been verified from their record available with the Revenue Department. In assessment year under appeal also, trading results have been accepted by Assessing Officer, therefore, for balance trading amount, the ld. CIT(Appeals) should not have confirmed the addition. The parties have running accounts with the assessee and if similar addition is made, it would give entire trading results of the assessee, to be abnormal. Therefore, the ld. CIT(Appeals) should have followed the order for assessment year 2003-04 for the purpose of deleting the addition against the assessee. However, ld. CIT(Appeals) noted that addition is limited to fresh additions only. This reason is also incorrect because ld. counsel for the assessee demonstrated that even if there are some fresh creditors from the same parties appearing in the books of account of the assessee but these are running accounts from the earlier years, therefore, for difference of the amount itself, no such addition should be made against the assessee. Since, no details have been given in the assessment order and the chart no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hholding lapse but it is a sort of compensatory deduction restriction for an income going untaxed due to tax withholding lapse. The insertion of the second proviso to section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from April 1, 2005, being the date from which sub-clause (ia) of section 40(a) was inserted by the Finance (No. 2) Act, 2004. The first proviso to section 201(1) of the Act has been inserted to benefit the assessee. It also states that where a person fails to deduct tax at source on the sum paid to a resident or on the sum credited to the account of a resident, such person shall not be deemed to be an assessee in default in respect of such tax if such resident has furnished his return of income under section 139. What is common to both provisos to sections 40(a)(ia) and 201(1) of the Act is that as long as the payee or resident has filed its return of income disclosing the payment received by and in which the income earned by it is embedded and has also paid tax on such income, the assessee would not be treated as a person in default. Held, dismissing the appeal, that the payees had filed returns and offered the sums received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f M/s Heera Moti Agro Industries. Following the reasons for decision in this case, we set aside the orders of authorities below and restore the same to the file of Assessing Officer with direction to re-decide this issue as is directed in ITA 739/2013. These grounds are allowed for statistical purposes. 22. In the result, appeal of the assessee is partly allowed for statistical purposes. ITA 750/2013 : (M/s Heera Moti Health Care Products Ltd., Chandigarh A.Y. 2007-08) 19. This appeal by assessee has been directed against the order of ld. CIT(Appeals) Central, Gurgaon dated 18.03.2013 for assessment year 2007-08. 20. The assessee did not press additional ground of appeal as well as ground Nos. 1 and 2. Same are, accordingly, dismissed being not pressed. 21. On ground Nos. 3 to 6, assessee challenged the addition of ₹ 7,93,331/- on account of unexplained sundry creditors. This issue is same as have been considered in ITA 739/2013 in the case of M/s Heera Moti Agro Industries. Following the reasons for decision in this case, we set aside the orders of authorities below and restore the same to the file of Assessing Officer with direction to re-decide this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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