TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 836
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.... addition of Rs. 73,36,425 made by the assessing officerwihin the provision section the I .T Act without appreciating the fact that the decision of Hon'ble ITAT, Mumbai 'A' Bench in the case of in the case of Asht Laxmi Diamond & Jewellery Vs. Income-tax Officer, 21(1)(1), Mumbai. IT APPEAL NO. 6182 (MUM) OF 2011 [AY 2007-08] and the decision of Hon'ble High Court of Rajasthan in the case of Rama Steel Rolling Mills & General Engg. Works vs. Income-tax Officer, Ward 3(1) [2013] 35 taxmann.com 262 (Rajasthan) are squarely covered in favour of the revenue on identical facts and circumstances. 3. On the facts and circumstances of the case and in law, the Id CIT(A) erred in deleting the disallowance of Rs. 4,84,307/- made by the assessing officer within the provision of section 37(l) of the I .T Act being interest paid on service-tax holding the same to be compensatory in nature without appreciating the fact that the assessee was not required to pay such interest, had the service tax been paid in time. 4. The appellant craves, leave to add, to amend and/or to alter any of the grounds of appeal, if need be. The appellant, therefore, prays that on the grounds stated abov....
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....the addition of the 'trade payables' of Rs. 73,36,425/- made by the A.O under Sec.41(1) of the Act, it was observed by the CIT(A), that merely because they were outstanding for a long period could not have justified addition of the same by invoking the aforesaid statutory provision. It was observed by the CIT(A), that the A.O had no evidence with him to conclude that there was a final remission or cessation of the outstanding liability or any part of it. In fact, it was noticed by the CIT(A), that as there was no unilateral write back by the assessee of the said liability in its profit and loss account, therefore, Explanation (1) of Sec.41(1) could not have been invoked. Apart there from, it was observed by the CIT(A) that as the credit entries were not made in the 'books of accounts' of the assessee during the year under consideration, therefore, the provisions of Sec.68 also could not have been invoked. On the basis of his aforesaid observations the CIT(A) deleted the addition of Rs. 73,36,425/- made by the A.O. Insofar the disallowance of the interest on service tax of Rs. 4,84,307/-was concerned, it was observed by the CIT(A), that the payment of the said amount was towards int....
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....er Sec. 37 of the Act, reliance was placed by the ld. A.R on the orders of the coordinate benches of ITAT, Delhi, viz. (i) M/s Remfry & Sagar Consultants Vs. ACIT, Circle 15(1), New Delhi (ITA No,.5887/Del/2011, dated 20.07.2012) ; and (ii) DCIT Vs. Messee Dusseldorf India (P) Ltd. (2010) 129 TTJ 81 (Del). Accordingly, it was submitted by the ld. A.R, that as the CIT(A) after duly appreciating the facts of the case in the backdrop of the settled position of law had rightly vacated the additions/disallowance made by the A.O, therefore, the appeal filed by the revenue was bereft of any force of law and did not merit acceptance. 7. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. We shall first advert to the addition of Rs. 73,36,425/- made by the A.O under Sec.41(1) of the Act, which had been deleted by the CIT(A). As is discernible from the assessment order, the aforesaid addition of Rs. 73,36,425/- was made by the A.O for the standalone reason that the liability of the assessee towards the said creditors was outstanding in....
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....aid case, the Hon'ble High Court had observed that in order to attract the provisions of Sec. 41(1) of the Act, it is necessary that there should be a cessation or remission of liability. It was further observed by the Hon'ble High Court, that as the assessee before them had acknowledged its 'debt' payable to the creditor under consideration, and there was no material to indicate that the parties had contracted to extinguish the liability, therefore, it could not be concluded that the said debt owed by the assessee towards the said party stood extinguished. Accordingly, we are of the considered view that as in the case before us the CIT(A) had rightly observed that in the absence of any evidence to conclude that there was a final remission or cessation of a 'trading liability' or any part of it, therefore, the provisions of Sec.41(1) could not have been invoked by the A.O. As regards the adverse inferences drawn by the A.O in respect of the genuineness of the transactions under consideration, we are of the considered view, that as the respective amounts had not been 'credited' in the 'books of account' of the assessee during the year under consideration, therefore, for the said rea....