TaxTMI 
TaxTMI 
2020 (12) TMI 1023
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....party. 3. That the learned Commissioner is wrong in confirming the addition of Rs. 6,98,007/- under s. 41(1) of the Income Tax Act, 1961 inspite of the AO having failed to prove that liability has ceased to exist and the appellant has claimed the amount as an expenditure when the liability was created. 4. Any other ground which may be raise at the time of hearing." 3. Briefly stated, the assessee company which is a franchisee of Apollo Hospital & Lifestyle Ltd., and also engaged in the business of trading in medicines had e-filed its return of income for A.Y. 2007-08 on 31.10.2007, declaring a business loss of (Rs. 27,89,110/-). Return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act. 4. During the course of the assessment proceedings the A.O. called upon the assessee to furnish copies of account of its creditors viz. (i) M/s. Aakshi Electrical Sys Pvt. Ltd. : Rs. 6,98,007/-; and (ii) M/s. Hitachi Home & Life Solutions (India) Ltd.: Rs. 50,000/-. On a perusal of the copies of accounts of the aforementioned parties, it wa....
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.... Act. 6. On the basis of his aforesaid deliberations the A.O. after making the aforestated additions under Sec. 41(1) of the Act, therein scaled down the loss of the assessee to an amount of Rs. 20,41,100/- 7. Aggrieved, the assessee assailed the assessment order before the CIT(A). However, not finding favour with the contentions advanced by the assessee, the CIT(A) upheld the additions made by the A.O. under Sec. 41(1) of the Act and dismissed the appeal. 8. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. We find that the assessee despite having been put to notice about the hearing of the appeal had however failed to put up an appearance before us. Accordingly, in the backdrop of the aforesaid facts, we are constrained to proceed with and dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963, after hearing the respondent revenue and perusing the orders of the lowers authorities. 9. The Learned Departmental Representative (for short 'D.R.') relied on the orders of the lower authorities. It was submitted by the Ld. D.R. that as the assessee had failed to substantiate the subsistence of th....
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....he assessee that the amount of Rs. 50,000/- reflected as an outstanding liability in the account of the aforesaid party i.e. M/s. Hitachi Home & Life Solutions (India) Ltd., was towards the repayment of the advance that was given by its director to the aforementioned party for purchase of air conditioners. In our considered view, the A.O. before bringing the aforesaid amount within the sweep of Sec. 41(1) of the Act, was obligated to have cumulatively satisfied two fold requirements viz. (i) that, an allowance or deduction had been made in the assessment for any year in respect of the trading liability under consideration; and (ii) that, subsequently during any previous year the assessee had obtained some benefit in respect of such trading liability by way of remission or cessation thereof. Now, in the case before us, the A.O. had failed to establish that any deduction for the liability of Rs. 50,000/- reflected against the aforesaid party viz. M/s. Hitachi Home & Life Solutions (India) Ltd., was ever claimed by the assessee. As such, in our considered view, in the absence of satisfaction of the aforesaid basic condition for invoking the provisions of Sec. 41(1) of the Act, the out....
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....he account of the aforementioned party was a disputed outstanding liability. It was the claim of the assessee, that the amount outstanding towards the aforementioned party could not be treated as a ceased liability within a meaning of Sec. 41(1) of the Act for two fold reasons viz.(i) that, the amount had been spent for electrical fittings and installation which had been capitalized and no expenditure except depreciation was charged to the profit and loss account; and (ii) that, the liability outstanding towards the aforementioned party though disputed had however not ceased. As is discernible from the orders of the lower authorities, we find that they had summarily brushed aside the aforesaid claim of the assessee, and without looking into the fact situation pertaining to the outstanding liability of the assessee towards the aforesaid party viz. M/s. Aakshi Electrical Sys Pvt. Ltd., therein summarily brought the same within the meaning of a ceased liability under Sec. 41(1) of the Act. 12. We have given a thoughtful consideration to the fact situation pertaining to the issue under consideration i.e. treating of the outstanding liability of the assessee towards M/s. Aakshi Elect....
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....eral is dismissed. 14. Before parting, we may herein deal with a procedural issue that though the hearing of the captioned appeal was concluded on 06/02/2020, however, this order is being pronounced much after the expiry of 90 days from the date of conclusion of hearing. We find that Rule 34(5) of the Income-tax Appellate Tribunal Rules, 1962 (sic 1963), which envisages the procedure for pronouncement of orders, provides as follows: (5) The pronouncement may be in any of the following manners:-- (a) The Bench may pronounce the order immediately upon the conclusion of the hearing, (b) In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement. In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily be a day beyond a further period of 30 days and d....
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....s a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon'ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that "In case the limitation expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown". Hon'ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that, "It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly", and also observed that "arrangement continued by an order dated 26th March 2020 till 30th April 2020 sha....