TaxTMI 
TaxTMI 
2014 (12) TMI 100
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....parties and perused the material on record: 3.1 M/s. Chandralok Fabrics (Rs.1,08,553/-): The credit outstands admittedly from a date prior to 31.03.2000 in respect of work of dying and printing. The reason for non-payment, as explained by the assessee, is not for carrying out the work properly, i.e., defective work. Notice u/s.133(6) to the party during the course of assessment proceedings, at the address supplied by the assessee, toward verifying the said balance as on 31.03.2006, i.e., even after over six years, came back unserved, with the postal remark 'left'. The assessee was unable to supply the whereabouts or the correct address of the party, with which it had admittedly no contact; there being no transaction with it since. The assessee was provided opportunity in the appellate proceedings by remanding the matter back to the Assessing Officer (A.O.), whereat again the assessee was unable to, despite abundant opportunity, as much as secure a confirmation from the said party (refer remand report dated 13.10.2010/PB pgs.24-25). Though another address of the 'creditor' was supplied, the A.O.'s communication thereat also remained unresponded, so that it was doubtful if the ....
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....uted by the assessee, who has throughout failed to show in any manner that the liability to any extent qua the said amount exists, or of any attempt by the party toward dispute resolution. The assessee's accounts reflecting it as a liability, it is only he on whom even otherwise, being in the know of the facts, the onus to prove the truth of its' accounts lies. This is particularly so when the surrounding and circumstancial facts, as in the instant case, unequivocally suggest otherwise. Even the attempts by the Revenue to verify the matter did not meet with any success. Even assuming the creditor's second address furnished by the assessee as correct, why did not the creditor - with whom the assessee had established contact, respond? The position continues for over ten years (of the booking of liability). The only irresistible conclusion is that the same does not represent a liability or, in any case, the assessee had failed to prove it as so, despite grant of abundant opportunity. We, accordingly, find no merit in its case. Reliance on CIT vs. Sugauli Sugar Works (P.) Ltd. [1999] 236 ITR 518 (SC) would be to no consequence. Vide the same the hon'ble apex court had clarified that a ....
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....ngly. 3.2 Dombivali Acid and Chemicals (DAC) (Rs.8,58,833/-): While the assessee's books revealed a credit balance in the account of the said party, a trade creditor, in the stated sum, constant since 31.03.2001, the latter's accounts revealed the following balances, furnished in response to notice u/s.133(6): Assessment Year Amount (Rs.) 2000-01 5,83,324 2001-02 12,14,849 2002-03 10,31,525 2003-04 10,31,525 2004-05 NIL In explanation for the difference, the assessee explained the said party to have been paid and, thus, it to have received Rs. 9,67,521/- from Shri Bhavesh D. Sheth (BS), the assessee's brother, on its behalf, during the period 15.01.2001 to 27.11.2011. A letter dated 20.12.2008 from the said party, addressed to Shree Shanti Silk Mills ('SSSM' for short), the assessee's proprietary concern, was produced in support. Further, as per the information furnished by the said party u/s. 133(6), its' accounts bore a debit and credit balance as on 31.03.2004, i.e., as due from and to the assessee's two proprietary concerns, SSSM and Sujata Silk Mills ('SSM' for short), at Rs. 10,29,869/- and Rs. 10,31,525/- respectively, which were set....
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....ue payment (at Rs. 1.07 lacs), with the balance (Rs.0.02 lacs) written off to the rebate account. This (i.e., the reconciliation of the two amounts) is significant in-as-much as the Revenue's charge is of there being no nexus between the two sums, i.e., the liability to DAC outstanding in the assessee's books and the admitted payments thereto by BS. Also, why would anyone pay in excess of what one is liable for, particularly considering that he is facing financial crises? The non passing of the journal entries or, rather, corrects entries, i.e., to the account of the right person, from whom the payment is receivable or due to, in their respective books of account by the assessee and BS, should therefore not be of much consequence. This is as the payee (DAC) himself admits (through its' accounts) to payments from BS being received from and on behalf of the assessee's firm, SSSM, with the payer (BS) also confirming this to be so (PB pgs.19- 21). Their accounts have not been impugned by the Revenue in any manner. Again, however, the copies of its' accounts (in the firm, SSM, for financial year 2009-10), now submitted before us (PB pgs.30-31), praying for their admission as 'additional....