Liability Paid subsequently cannot be added to the income of the Assessee

Assessee vide letter dated 28th Jan 2013 has submitted a statement showing the details of sundry credits from the year 2000 to 2012. It has been further claimed that the amount which was outstanding at Rs. 69,32,307 in the year 2000 has been reduced to Rs.19,32,372 at the end of the A.Y. 2012-13. Through this letter the assessee wants to bring into the knowledge of this Tribunal that the liability has not ceased, rather he has been repaying the amount to his creditors. The outstanding amount is now a sum of Rs.19,32,372 only against the amount of 48,89,025 relating to A.Y. 2007-08, which has been added by the Assessing Officer to his total income.

 In view of the newly developed facts, it would be in the interest of justice to remand the issue back to the Assessing Officer for verifying the genuineness of repayment of loans as claimed by the assessee. We may observe that in the list submitted by the assessee, he has shown to have made certain payments during the A.Ys. 2009-10 and 2010-11. However, neither this fact was brought into the knowledge of the Assessing Officer before completion of the assessment on 27.11.2009 nor this plea or this fact of repayment was brought into the notice of the learned CIT(A) during the pendency of the appeal or till date of order on 14.10.2010. No such plea was taken by the assessee in the grounds of appeal before the Tribunal. It is only after the completion of the arguments that the assessee has come with a new fact that he has been regularly repaying the loan amount to the creditors as detailed in the list. This type of explanation given by the assessee at this stage seems to be suspicious. However, the interest of justice demands that this explanation, though suspicious, is required to be verified. If the assessee has really repaid the amount to the creditors then it will be injustice to him, if the amount is added to his income. Under such circumstances, we remand this case back to the file of the Assessing Officer for fresh assessment in accordance with law and with direction to scrutinize, verify and make necessary investigations regarding the genuineness of the assessee’s claim of repayment to the sundry creditors

INCOME TAX APPELLATE TRIBUNAL, MUMBAI

BEFORE SHRI P M JAGTAP, ACCOUNTANT MEMBER

& SHRI SANJAY GARG, JUDICIAL MEMBER

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