The judgment of the court was delivered by
Ajay Kumar Mittal,J.-CM No.19021 CII of 2013
1. The documents Annexures R.1 to R.8 are allowed to be taken on record. CM stands disposed of.
ITA No.213 of 2009
2. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act,1961 (in short, "the Act") against the order dated 8.10.2008, Annexure A.3 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, "the Tribunal") in ITA No.72 (ASR)/2006, for the assessment year 2002- 03. The appeal was admitted on 11.8.2009 for determining the following substantial questions of law:-
I) Whether on the facts and circumstances of the case, the ITAT was right in law in holding that the AO has not discharged his onus in proving that the liability has ceased in the year under consideration ignoring the fact that the assessee had not only failed to file confirmation from the concerned creditors to the effect that the liabilities were still outstanding on the date of the balance sheet but had also failed to provide the addresses of the creditors, their PANs or the details as to where they were assessed?
II)Whether on the facts and in the circumstances of the case the Hon'ble ITAT has erred in law in holding that there has been no remission or cessation of liability when it is clear that the trade debts aggregating to Rs.29,66,953/- have remained unpaid for several years and have become unenforceable?"
3. Briefly, the facts necessary for adjudication of the controversy involved, as narrated in the appeal, may be noticed. The assessee derives income from manufacturing and sale of auto and cycle tyres and tubes. Return declaring total income of Rs. 1,70,099/- computed under the provisions of the Act and Rs. 23,88,900/- under the provisions of section 115JB of the Act accompanied by audit report under Sections 44AB and 80IA of the Act was furnished by the assessee on 31.10.2002 which was processed under Section 143(1) of the Act. Subsequently, the case was selected for scrutiny and notices under sections 142(1) and 143(2) of the Act were issued to the assessee. During the course of assessment proceedings, the Assessing Officer observed that the assessee had shown old creditors in the books of account to the tune of Rs. 29,66,953/-. The assessee stated before the Assessing Officer that it was the duty of the department to show that the liability had been ceased or was no more existing. The explanation was rejected by the Assessing officer since the assessee failed to substantiate the genuineness of the existence of creditors. Vide order dated 28.2.2005, Annexure A.1, the Assessing Officer made an addition of Rs. 29,66,953/- by invoking the provisions of section 41(1) of the Act. Aggrieved by the order, the assessee went in appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 30.12.2005, Annexure A.2, the CIT(A) deleted the addition of Rs. 29,66,953/-. Not satisfied with the order, the revenue filed appeal before the Tribunal. Vide order dated 8.10.2008, Annexure A.3, the Tribunal dismissed the appeal. Hence the present appeal by the revenue.
4. The primary issue that arises for consideration in this appeal is whether the assessee-respondent had discharged the liability in respect of trade debts aggregating to Rs. 29,66,953/-.
5. Civil Miscellaneous Application No.19021 CII of 2013 had been filed by the assessee wherein it had sought to place on record documents Annexures R.1 to R.8 to show that it had made the payments to various creditors/parties in subsequent assessment years. Notice of this application was issued to the revenue. Mr. Sethi has produced a communication dated 12.3.2014 received from the office of Assistant Commissioner of Income Tax, Central Circle I, Jalandhar wherein it has been stated as under:-
"1. Yes, as per the records of this office, the appeal of the assessee is pending before the Hon'ble Punjab and Haryana High Court, Chandigarh.
2. The assessee company had filed its return of income for the assessment year 2001-02 wherein it had shown the amounts due towards its sundry Creditors as outstanding liabilities in the balance sheet for the assessment year 2001-02.
3. It is verified from the record that the payments as regards the liabilities towards the said Sundry Creditors are made in the next subsequent assessment years and the same has been accepted by the department under Section 143(3)/153(C) of the IT Act. The certified copies of assessment orders passed by the concerned Assessing Officers under Section 143(3)/153(C) of the IT Act for the assessment years 2003-04 to 2009-10 are enclosed herewith.
4. Sundry Creditors have already paid their dues in the subsequent years."
The above communication dated 12.3.2014 is taken on record.
6. A perusal of the aforesaid communication clearly shows that it was not disputed by the department that in assessments framed under sections 143(3)/153(C) of the Act for the assessment years 2003-04 to 2009-10, the liabilities towards above-mentioned Sundry creditors were made in the subsequent assessment years which was accepted by the revenue.
7. In view of the above, it was agreed by the learned counsel for the parties that the present appeal has been rendered infructuous and may be disposed of as such. Ordered accordingly.