Case Law Details
ACIT Vs Sunderdeep Construction Pvt. Ltd (ITAT Indore)
On perusal of the finding of Ld. CIT(A) as well as the facts narrated before us along with the documentary evidences it is predominantly clear that the alleged amount of bogus creditors are not in the form of sundry creditors. These amounts are advances against booking of plots. When the plots are developed and the parties who have booked the plots give the remaining amount if any, then the advance given at the time of booking is transferred to sales account.
We therefore are of the view that as regards the amount outstanding at Rs.12,45,687/- in the name of Maggy Publicity, no addition can be made u/s 41(1) of the Act since it has offered to tax in the return of income filed for Assessment Year 2014-15. Further we find that all the remaining 10 parties are not sundry creditors but are the advances for booking of developed plots of which some have already been transferred to the sales account when the registry was completed. These 10 parties cannot be termed as sundry creditors as there is no supply of goods or services by these parties. Ledger account shows that the assessee has received the sum through banking channel from these parties. Such sum received can either be in the form of unsecured or advance for sale/booking of plots. In the instant case out of the 10 parties in two cases the registry have been done and the advances received during the preceding years have been transferred to sales account. This fact asserts that all the sum received from 10 parties is advances for booking of plots and not balance of sundry creditors.
Hon’ble Gujarat High Court in the case of Nitin S Gar (supra) (2012) 22 taxmann.com 59 has held that “Merely because the liabilities are outstanding for last many years, it cannot be inferred that the said liabilities have seized to exist. The Appellate Tribunal has rightly observed that the Assessing Officer shall have to prove that the assessee has obtained the benefits in respect of such trading liabilities by way of remission or cessation”.
We therefore in the given facts and circumstances of the case and respectfully following the judgments referred and relied herein above find no reason to interfere in the finding of Ld. CIT(A) and thus are of the considered view that out of the alleged sum of Rs.12,45,687/- outstanding in the name of Maggi Publicity has been offered to income for Assessment Year 2014-15 and all the remaining amount of Rs.70,59,713/- received from 10 parties are not sundry creditors as they have advances for booking of plot of lands of which few have been transferred to sales account as and when the registry of plot of land is completed. Provision of Section 41(1) are not applicable on this case as the assessee has not claimed the alleged amount of advances from customers as an allowance or deduction in any assessment year in respect of loss, expenditure or trading liability. We thus confirm the finding of Ld. CIT(A) and dismiss Revenue’s Ground No.2.
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