Cit vs Millenium Automations & Systems ...
2012 Latest Caselaw 1164 Del

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*              IN THE HIGH COURT OF DELHI AT NEW DELHI

%                            Date of Decision : 21st February, 2012.

+      ITA 469/2011

       CIT                                    ..... Appellant
                        Through Mr. N P Sahni, sr. standing counsel

                   versus

       MILLENIUM AUTOMATIONS &
       SYSTEMS LTD                     ..... Respondent
                   Through Mr. A S Anand, Adv.

CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE R.V. EASWAR

SANJIV KHANNA,J: (ORAL)
       The present appeal by the Revenue under Section 260A of the

Income Tax Act, 1961 („Act‟, for short) impugns the order dated

16.2.2010 passed by the Income Tax Appellate Tribunal („Tribunal‟,

for short). By the impugned order, the Tribunal has rejected the

appeal filed by the Revenue against the order of the Commissioner of




ITA 469/2011                                          Page 1 of 5
 Income Tax (Appeals) deleting the addition of Rs.1,63,37,365/-

made by the Assessing Officer under Section 41(1) of the Act.

2.      Ld. counsel for the Revenue has filed before us copies of the

order sheets dated 23.10.2008 and 10.12.2008. It is submitted that

the Assessing Officer may have wrongly invoked the provisions of

Section 41(1) of the Act as the present case is of bogus purchases.

Ld. counsel for the Revenue has referred to the address of Makkar

Traders, namely, 2712, 2nd Floor, Gali Pattewali, Naya Bazar, Delhi-

6 and submits that computer traders did not operate from the said

area. He further submits that the authorized representative/chartered

accountant of the respondent-assessee and Makkar Traders were the

same.

3.      Ld. standing counsel for the Revenue is raising new facts and

grounds for the first time which were not referred to or stated in the

assessment order. These facts/grounds, it is apparent, were not relied

upon before the Tribunal. The assessee had no occasion to answer or

contest the said contentions. The assessment order dated 29.12.2008



ITA 469/2011                                            Page 2 of 5
 records as under :

      "On 10.12.2008, the authorized representative Shri B. L.
      Aggarwal attended and he has been intimated about the no
      response from M/s. Makkar Traders and above the return of
      the letter. The authorized representative was asked to file
      the response on 15.12.2008 and why the credit balance
      shown against Makkar Traders should not be taxed as
      income under "Cessason of liability" u/s 41(1) of the
      Income Tax Act. The assessee failed to produce the party
      and vide letter dated 15.12.2008 stated that M/s. Makkar
      Traders have not received the letter issued u/s 133(6) since
      it was sent to home address which was deliberately not
      received by family members.                The authorized
      representative furnished another address of M/s. Makkar
      Traders from where the business in conducted. The
      authorized representative was asked to certify and
      confirmed the above credit balance shown by the assessee.
      However no confirmation was filed by the assessee even
      after given many opportunities. The assessee company was
      asked to submit a copy of profit and loss account of M/s.
      Makkar Traders for the financial year in which it had done
      business for an amount of Rs.1,63,37,365/-. This the
      assessee company failed to do and the Authorized
      Representative did not attend the office of undersigned to
      submit requisite details."
4.     The CIT(Appeals) called for the assessment record and found

that several findings recorded by the Assessing Officer were



ITA 469/2011                                             Page 3 of 5
 factually incorrect. On 10.12.2008, the Assessing Officer had asked

the respondent-assessee, as to why Rs.1,63,37,365/- should not be

taxed under Section 41(1) of the Act on account of cessation of

liability payable to sundry creditors. The assessee on the same date

was asked to furnish details with regard to the change in address and

to furnish the proof of payment made to Makkar Traders in the

following years and to explain the current status.             On the

examination of record, the CIT(Appeals) observed and found that the

assessee had furnished copy of the income tax return of Makkar

Traders for the assessment year 2006-07, with the copy of their

income and expenditure account and balance sheet for the year

ending 31.03.2006.    The respondent-assessee had also furnished

copy of the ledger account of Makkar Traders from 1st April, 2006 to

31st March, 2007. This ledger account has been produced before us

also. Thus the latest address as well latest position of the account

was furnished to the Assessing Officer. The relevant portion of the

assessment order, quoted above, shows that the Assessing Officer did



ITA 469/2011                                           Page 4 of 5
 not refer to the said ledger account and did not make further

enquiries. Ledger account shows that some payments in 2006 and

2007 were made to Makkar Traders by cheque/pay order. Other

payments again by cheque were made to third parties on behalf of

Makkar Traders.     Thus, the findings recorded by the Assessing

Officer were incorrect and wrong.

5.     In view of the grounds/reasons given by the Assessing Officer

and the factual matrix recorded by the CIT(Appeals) and the

Tribunal, we do not find any reason to interfere. The appeal is

dismissed. No costs.



                                         SANJIV KHANNA, J.

R.V.EASWAR, J. February 21, 2012 vld