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TMI Blog2023 (5) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. CIT(A) how the expenses are not found to be genuine, we hold that the expenses which have not been paid for the last six years and the expenses which have been incurred for Amit Saree and Rangoli Collection pertaining to F.Y. 2007-08 and all other expenses wherein not even a single creditor had demanded the money back nor the assessee made any attempt to repay the same. CIT(A) has correctly examined the invoices, period and purpose. Hence, we decline to interfere with the order of the ld. CIT(A) - Decided against assessee. - ITA No. 393/Del/2016 - - - Dated:- 12-5-2023 - Sh. C. M. Garg, Judicial Member And Dr. B. R. R. Kumar, Accountant Member For the Assessee : Sh. Gautam Jain, Adv. For the Revenue : Sh. Kanv Bali, Sr. DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeal has been filed by assessee against the order of ld. CIT(A)-12, New Delhi dated 26.11.2015. 2. Following grounds have been raised by the assessee: 1. That the learned Commissioner of Income Tax (Appeals)-XII [ CIT(A) ] erred in upholding the disallowance made by learned Assessing Officer ( AO ) for non-providing confirmations of outstanding balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpliance. The ld. AR relied on the orders of ITAT in the case of ACIT Vs. Foot Mart Retail India Pvt. Ltd. in ITA No. 4278/Del/2019, order dated 31.05.2022, Sudha Loyalka vs. ITO in ITA No. 399/Del/2017, Indersons Leathers (P) Ltd. vs. Addl. CIT Jalandhar 114 ITD 242 (Amritsar), CIT vs. Smt. Sita Devi Juneja 325 ITR 593 (P H), Kaps Advertising vs. ITO 11 ITR (T) 113 (Del), Pr. CIT vs. Matruprasad C Pandey 377 ITR 363 (Guj) and CIT vs. Alvares Thomas394 ITR 647 (Kar). 7. On the other hand, the ld. DR relied upon the order of the ld. CIT(A). 8. Heard the arguments of both the parties and perused the material available on record. 9. We find that Assessing Officer has made an addition of Rs.1,08,82,873/- on account of Sundry Creditors as Appellant could not get the confirmation of the parties. Appellant has submitted that he could not obtain the confirmation as they are very old creditors. 10. The Appellant has submitted the list of Sundry Creditors disallowed before the ld. CIT(A) which is as under: Sr. No. Particulars Since Amount (Rs.) 1 Pan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42,350.00 20 Bhushan Auto Industry 01/04/2005 329,510.00 371,860.00 21 BKG Auto Intl. 01/04/2006 33,200.00 22 Chauhan Gasket 01/04/2006 37,700.00 23 Omega Brass Industries 01/04/2006 665,325.00 24 Raj Auto Enterprises 01/04/2006 90,000.00 25 Saini Electricals 01/04/2006 1,184,850.0 26 United World Wide Heig 01/04/2006 63,532.00 2,074,607.00 27 Amit Saree Palance 01/04/2007 151,875.00 28 Rangoli Collection 01/04/2007 44,500.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee (hereinafter referred to as the first-mentioned person) and subsequently during any previous year, (a) the first-mentioned person has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or (b) the successor in business has obtained, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred Judgment dt.11.3.2019 in TCA No.302 / 2008 West Asia Exports Imports (P) Ltd. v. ACIT 23 / 38 by the first-mentioned person or some benefit in respect of the trading liability referred to in claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esses to prove such entries, when the assessee has failed to prove the same inspite of giving an opportunity for the Assessing Officer, we are of the opinion that all authorities were justified in holding that the amount of Rs. 13,03,008/- as an unproved credit. In the circumstances, we have to answer the question No.3 against the assessee. 17. Further, the Hon ble Madras High Court in the case of M/s West Asia Exports Imports (P) Ltd. Vs. ACIT in Tax Case Appeal No. 302 of 2008 on the similar issue held as under: 11. On the other hand, the learned Senior Standing Counsel for the Revenue, Mr. M. Swaminathan, contended that the significant difference in Judgment dt.11.3.2019 in TCA No.302 / 2008 West Asia Exports Imports (P) Ltd. v. ACIT 12 / 38 facts, in the present case, is that the entire business of the Assessee, namely the timber business, for which the said trade liabilities were incurred by the Assessee, had been closed by the Assessee about ten years back prior to the present Assessment Year 200304 in hand and not only none of the creditors had made any claim from the Assessee with regard to the said dues, but the Assessee also failed to produce the confirmatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2019 in TCA N0.302 / 2008 West Asia Exports Imports (P) Ltd. v. ACIT 14 / 38 22. The principle laid down by Atkinson, J. applies in full force to the facts if this case. If a common sense view of the matter is taken, the assessee, because of the trading operation, had become richer by the amount which it transferred to its profit and loss account. The moneys had arisen out of ordinary trading transactions. Although the amounts received originally was not of income nature, the amounts remained with the assessee for a long period unclaimed by the trade parties. By lapse of time, the claim of the deposit became time barred and the amount attained a totally different quality. It became a definite trade surplus. Atkinson, J. pointed out that in Morley's case (supra) no trading asset was created. Mere change of method of book- keeping had taken place. But, where a new asset came into being automatically by operation of law, common sense demanded that the amount should be entered in the profit and loss account for the year and be treated as taxable income. In other words, the principle appears to be that if an amount is received in course of trading transaction, even though it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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