ACIT Cir.-1,, Aurangabad v. Siddheshwar SSK Ltd.,, Aurangabad

ITA 1296/PUN/2009 | 2004-2005
Pronouncement Date: 31-01-2011 | Result: Allowed

Appeal Details

RSA Number 129624514 RSA 2009
Assessee PAN AABAS5211H
Bench Pune
Appeal Number ITA 1296/PUN/2009
Duration Of Justice 1 year(s) 2 month(s) 18 day(s)
Appellant ACIT Cir.-1,, Aurangabad
Respondent Siddheshwar SSK Ltd.,, Aurangabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-01-2011
Assessment Year 2004-2005
Appeal Filed On 12-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER I.T.A. NO. 1296/PN/2009: A.Y. 2004-05 ASSTT. CIT CIR. 1 AURANGABAD APPELLANT VS. SIDDESHWAR SSK LTD. MANIKNAGAR TQ. SILLOD DIST. AURANGABAD PAN AABAS 5211 H RESPONDENT APPELLANT BY: SHRI ABHAY DAMLE RESPONDENT BY: SHRI S.P. JOSHI ORDER PER SHAILENDRA KUMAR YADAV JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) AURANGABAD DATED 10-8-2009 FOR A.Y. 2004 -05 ON THE FOLLOWING GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 35 26 807/- ON ACCOUNT OF CESSATION OF LIABILITY U/ S 41(1) OF THE I.T. ACT. 2. THE DECISION IN THE CASE OF J.K. SYNTHETICS VS. O.S. BAJPAYEE (1976) 105 ITR 864 (ALL) IS NOT APPLICABLE BECAUSE IT IS NOT STATUTORY LIABILITY RATHER IT IS CONTRACTUAL LIABILITY WHICH WAS DISPOSED BY THE ASSESSEE AT PARTICULAR POINT OF TIME. FURTHER ON 14-4-2009 T HE DEBT OF RS. 1 20 19 300/- IS SETTLED FOR AN AMOUNT OF RS . 85 08 493/- WHICH IS APPROXIMATELY SIMILAR TO TRIAL COURT JUDGMENT DATED 31-12-2003 HELD RS. 84 92 493/-. MOREOVER THE DECISION OF THE J.K. SYNTHETICS VS. O. S. BAJPAYEE (1976) 105 ITR 864 (ALL) IS CONSIDERED BY THE HONBLE SUPREME COURT IN THE CASE OF POLYFLEX INDIA PVT. LTD. VS. CIT (2002) 124 TAXMAN 373 (SC). THE LD. C IT(A) IS ERRED BY NOT FOLLOWING THE DECISION OF THE HONB LE APEX COURT IN THE CASE OF POLYFLEX INDIA PVT. LTD. VS. CIT PAGE 2 OF 4 ITA NO. 1296.09 IDDESHWAR SSK A.Y. A.Y. 2004-05 A(2002) 124 TAXMAN 373 (SC) REGARDING CESSATION OF LIABILITY AND ITS TREATMENT AS INCOME U/S 41(1) OF THE I.T. ACT 1961. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURE AND SALE OF SUGAR. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DISCLOSED AN AMOUNT OF RS. 1 20 19 300/- AS PAYABLE TO SAMARTH SAHAKARI SAKHAR KARKHANA ON ACCOUNT OF PURCHASE OF SUGAR DURING F.Y. 2000-01. THE AFORESAID PAYMENT WAS DISPUTED B Y THE CREDITOR AND ON 31-12-2003 THE CONCERNED CO-OPERATIVE JUDGE AURANGABAD PASSED INTER ALIA DIRECTED THE ASSESSEE TO PAY RS . 84 92 493/- IN RESPECT OF TRANSACTION OF PURCHASE OF SUGAR. ON TH E BASIS OF ABOVE REFERRED ORDER THE ASSESSING OFFICER WAS OF THE OP INION THAT LIABILITY TO PAY M/S. SAMARTH SSK WAS LIABLE TO BE INCLUDED A S THE ASSESSEES INCOME FOR F.Y. 2004-05 U/S 41(1) OF THE ACT. ACCORDINGLY THE ASSESSING OFFICER PASSED AN ORDER AFTER INITIATING PROCEEDINGS U/S 147 AND ASSESSMENT WAS COMPLETED AF TER MAKING AN ADDITION OF RS. 35 26 807/- AND REDUCING THE LOS S AT AN AMOUNT OF RS. 4 03 59 675/-. 3. THE MATTER WAS CARRIED BEFORE THE CIT(A) WHO GRA NTED RELIEF TO THE ASSESSEE BY OBSERVING THAT INSPITE OF ORDER OF THE CONCERNED CO- OPERATIVE JUDGE DATED 31-12-2003 THE MATTER WAS TAK EN INTO APPEAL BY AGGRIEVED PARTY BEFORE THE CONCERNED APPELLATE A UTHORITY. ACCORDINGLY THE ADDITION IN QUESTION WAS DELETED. SAME HAS BEEN OPPOSED BY THE REVENUE BY STATING THAT FINALITY WAS ACHIEVED BY THE ORDER OF THE CONCERNED CO-OPERATIVE COURT DATED 3 1-12-2003. SO PAGE 3 OF 4 ITA NO. 1296.09 IDDESHWAR SSK A.Y. A.Y. 2004-05 THE ORDER OF THE CIT(A) IS NOT JUSTIFIED. ON THE OT HER HAND THE LEARNED AR SUBMITTED THAT THE MATTER WAS SUB-JUDICE AT THE RELEVANT POINT OF TIME AND IT ACHIEVED FINALITY IN A.Y. 2004-05. IN THIS REGARD AN AGREEMENT WAS BROUGHT TO OUR KNOWLE DGE WITH REGARD TO THE FINAL SETTLEMENT AMONG THE PARTIES. THE AGREEMENT WAS PLACED ON RECORD. HOWEVER THE LEARNED AR WAS NOT IN A POSITION TO CLARIFY THE FACT WHETHER THE SAID AGREE MENT DATED 14-4- 2009 WAS FILED BEFORE THE CONCERNED APPELLATE COURT FOR ACTING UPON THE SAME OR NOT. IT IS ESSENTIAL TO ASCERTAIN FINA LITY OF PROCEEDINGS IN THIS REGARD. THE LEARNED AR WAS FAIR ENOUGH TO STATE THAT HE WILL NOT MIND IF THE MATTER IS RESTORED TO THE FILE OF T HE ASSESSING OFFICER ON THIS LIMITED ISSUE. 4. UNDER THE CIRCUMSTANCES WE FIND IT UNDISPUTED T HAT THE ASSESSEE WAS LIABLE TO PAY RS. 1 20 19 300/- WHI CH WAS REDUCED TO RS. 84 92 493/- BY THE CONCERNED CO- OPERATIVE COURT. THE MATTER WAS CARRIED BEFORE THE CONCERNED APPELLATE AUTHORITY AND CLAIMED TO BE FINALLY SETTLED AT THE STRENGTH OF AGREEMENT DATED 14-4-2009. HOWEVER THERE IS NOTHING ON RECORD WHETHER THE APPELLATE PROCEEDINGS W ERE DROPPED AT THE STRENGTH IN TERMS AND CONDITIONS OF THE ABOVE AGREEMENT ARRIVED AT BETWEEN THE PARTY. IT IS NOT AN AGREEME NT ARRIVED AT BETWEEN THE PARTIES WHICH IS RELEVANT FOR DET ERMINING THE FINALITY OF DISPUTE BUT FINALITY OF THE APPELLA TE PROCEEDINGS IN TERMS OF SAID AGREEMENT BY APPELLATE AUTHORITY WHIC H IS NOT CLEAR FROM THE RECORD AVAILABLE PUT FORWARD BY BOTH THE PARTIES. SO IN THE INTEREST OF JUSTICE THE MATTER IS RESTOR ED TO THE FILE OF THE PAGE 4 OF 4 ITA NO. 1296.09 IDDESHWAR SSK A.Y. A.Y. 2004-05 ASSESSING OFFICER ON THE LIMITED ISSUE OF FINALITY ALONE WITH DIRECTIONS TO DECIDE THE SAME AS PER LAW AFTER PROV IDING DE OPPORTUNITY OF HEARING TO ASSESSEE. 5. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY 2011. SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 31 ST JANUARY 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- (A) AURANGABAD 4. THE CIT AURANGABAD 5. THE D.R B BENCH PUNE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE