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TMI Blog2018 (6) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... nal evidences the matter may be examined afresh - hence we are of the considered view that since these additional evidences go to the root of the matter and assessee is prevented with reasonable cause in not submitting the same while completion of the assessment, we admit the additional evidences and restore the issue to the file AO for examining afresh - thus allowed for statistical purposes. Disallowance u/s. 40(a)(i) - remittance of tds - Held that:- The assessee submitted that, assessee has deducted TDS in respect of the expenditure and remitted before the due date for furnishing of return of income u/s. 139(1) and therefore no disallowance is required to be made - hence, this issue is restored to the file of the AO who shall examined afresh in the light of the latest legal position and decide in accordance with law, after providing adequate opportunity of being heard to the assessee - thus allowed for statistical purpose. - ITA NO.983/MUM/2016 - - - Dated:- 15-6-2018 - SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI N.K. PRADHAN, HON'BLE ACCOUNTANT MEMBER For The Assessee : Shri Ritika Agarwal For The Department : Ms. Pooja Swaroop ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and taxed in the hands of the assessee observing that assessee has not submitted the confirmation from the creditor, genuineness of the transactions is not proved and the case law relied upon are distinguishable. Assessing Officer relied on the decision of the Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar and Sons Ltd. [222 ITR 344] and concluded that there is a cessation of liability and accordingly he made the addition. 4. On appeal, the Ld.CIT(A) placing reliance on the decision of the Mumbai Bench of the Tribunal in the case of Natural Gas Company Pvt. Ltd. v. DCIT [61 taxmann.com 297] rejected the claim of the assessee. 5. Learned Counsel for the assessee submitted that assessee is engaged in the business of designing, manufacturing, reselling and installing engineering Equipments used for noise and pollution control. One job order received from Flo-Dyne Limited, U.K. was given to M/s. Camy Plant for ₹ 1,01,06,500/- out of which an amount of ₹ 75,82,302/ was payable on 31-03-2011. Neither M/s. Camy Plant has waived the said amount nor has the assessee unilaterally written back the liability. The amount payable to M/s. Camy Plant ₹. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n admitted fact that neither the assessee nor the creditor have written off the liability from their Books of Accounts. In such circumstances simply because the liability is outstanding for quite some years the liability does not seize to exist. In the case of CIT v. Smt Sita Devi Juneja (supra) the Hon'ble Gujarat High Court considering the judgment of the Hon'ble Supreme Court in the case of CIT v. Sugauli Sugar Works (P.) Ltd [236 ITR 518] held as under: - In the present case, the Assessing Officer made an addition of ₹ 1,47,71,696/- on account of outstanding sundry credit balances as on 31.3.2004, while holding that liability in respect of these creditors had ceased to exist and as such, it had become liable to be treated as deemed income under Section 41 (1), Explanation-I of the Act. On appeal filed by the assessee, the CIT (A) partly allowed the appeal and the aforesaid addition was deleted, while coming to the conclusion that in the facts and circumstances of the case, the Assessing Officer has wrongly invoked the provision of Section 41 (1), Explanation-I of the Act. It has been observed that in the instant case, there was no unilateral cessation or remi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee concerning such trading liability by way of remission or cessation thereof during the concerned year. There thus, did not accrue any benefit to the assessee which could be deemed to be the profits or gains of the assessee's business which would otherwise not be the assessee's income. The assessment order, as such, is directly against the decision of the Hon'ble Supreme Court in the case of Chief Commissioner of Income Tax v. Kesaria Tea Co. Ltd. (2002) 254 ITR 434 (SC). After hearing learned counsel for the appellant and going through the impugned order, we do not find any merit in the instant appeal. It is the conceded position that in the assessee's balance sheet, the aforesaid liabilities have been shown, which are payable to the sundry creditors. Such liabilities, shown in the balance sheet, indicate the acknowledgment of the debts payable by the assessee. Merely because such liability is outstanding for the last six years, it cannot be presumed that the said liabilities have ceased to exist. It is also conceded position that there is no bilateral act of the assessee and the creditors, which indicates that the said liabilities have ceas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of trading liability by way of remission or cessation thereof was obtained by the assessee and it is in the previous year in which the amount or benefit, as the case may be, has been obtained that the amount or the value of the benefit would become chargeable to income tax as income of that previous year. 12. We fully agree with the view taken by the Division Bench in C.I.T. v. Rashmi Trading (1976) 103 ITR 312 Gujarat (Supra) that the only meaning that can be attached to the words obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure incurred in any previous year clearly refer to the actual receiving of the cash of that amount. The amount may be actually received or it may be adjusted by way of an adjustment entry or a credit note or in any other form when the cash or the equivalent of the cash can be said to have been received by the assessee. But it must be the obtaining of the actual amount which is contemplated by the Legislature when it used the words has obtained; whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure in the past . As rightly observed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of liability in the case of the assessee. Hence this ground of appeal is allowed. 12. Coming to Ground No.2 i.e upholding the disallowance of expenses of ₹.1.00.640/- and Ground No.3 i.e. in respect of disallowance of discount allowed by the assessee, Learned Counsel for the assessee submitted that, additional evidences were filed along with a petition for admission of the same and in view of the additional evidences the matter may be examined afresh. We have gone through the petition and the reasons provided therein for submission of additional evidences and we are of the considered view that since these additional evidences go to the root of the matter and assessee is prevented with reasonable cause in not submitting the same while completion of the assessment, we admit the additional evidences and restore both the issues in Ground No.2 3 to the file Assessing Officer for examining afresh in accordance with law considering the additional evidences. This ground of appeal is allowed for statistical purpose. 13. Coming to last grounds of appeal i.e. disallowance u/s. 40(a)(i) of the Act, the Learned Counsel for the assessee submitted that, assessee has deducted T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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