- (1.) The documents annexures R-1 to R-8 are allowed to be taken on record. CM stands disposed of. I. T.A. No. 213 of 2009 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 October 8, 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 August 11, 2009, for determining the following substantial questions of law: (I) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the Assessing Officer 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 permanent account numbers or the details as to where they were assessed? (II) Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal 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?
(2.) 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 the audit report under sections 44AB and 80IA of the Act was furnished by the assessee on October 31, 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 February 28, 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 December 30, 2005, annexure A-2, the Commissioner of Income-tax (Appeals) deleted the addition of Rs. 29,66,953. Not satisfied with the order, the Revenue filed appeal before the Tribunal. Vide order dated October 8, 2008, annexure A-3, the Tribunal dismissed the appeal. Hence, the present appeal by the Revenue.
(3.) The primary issue that arises for consideration in this appeal is whether the assessee-respondent had discharged the liability in respect of the trade debts aggregating to Rs. 29,66,953.;