Ita/276/2010 Of The City Theatres Pvt. Ltd v. Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA, 1940 ITA.No. 276 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 917/2007 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 25-03-2009 APPELLANT/S: THE CITY THEATRES PVT. LTD.NEW THEATRE BUILDING, P.SUBRAMANIAM ROAD, THAMPANOOR, THIRUVANANTHAPURAM-14 REPRESENTED BY ITS MANAGING DIRECTOR, MR.S.MURUGAN. BY ADVS.SRI.E.K.NANDAKUMARSRI.K.JOHN MATHAISRI.P.BENNY THOMASSRI.P.GOPINATH RESPONDENT/S: DEPUTY COMMISSIONER OF INCOME TAXCIRCLE-2(1), THIRUVANANTHAPURAM. OTHER PRESENT: SRI PKR MENON SR FOR GOI TAXES THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J U D G M E N T Vinod Chandran, J The appeal by the assessee against theorder of the Tribunal. The subject assessment yearis 2004-05. The appeal before the first AppellateAuthority ended in deletion of certain items andconfirmation of other additions. Both Departmentand the assessee were in appeal before theTribunal. The Department appeal is allowed and theassessee's appeal is rejected. The present ITAarises from the order of the Tribunal allowing theDepartmental appeal. The question of law raised isof two counts; one with respect to the existingliabilities as seen from the returns being notproved or confirmation produced before the Assessing Officer. The next issue is on theprovision for rent made by the assessee in the books of accounts, but however, not paid in theprevious year relevant to the subject assessment year. The questions of law raised are as follows: i. Whether on the facts and in the circumstances of the case, the Tribunalwas justified in disallowing Rs.37,01,588/-as cessation of liability under Sect 41(1)of the Income Tax Act? ii, Whether on the facts and in thecircumstances of the case, the Tribunal wasjustified in coming to the conclusion thatthe liability has ceased to exist when itwas not settled? iii. Whether on the facts and circumstances of the case the Tribunal was justified in disallowing provision for dues on Kuthakapattom land? 2.We see that the Tribunal has dealtwith the issue on the basis of actual paymenteffected in the previous year. We do not see anyreason to interfere with such findings especiallywhen the returns filed are based on accountsmaintained on cash basis. As to the liabilitiesdeleted by the First Appellate Authority for whichno confirmation was offered by the assessee, theTribunal found that the Department cannot be askedto prove the existing liabilities. All the saidliabilities were existing for long years and thenormal period of limitation for filing a suit forrecovery had also expired. In such circumstances,it was for the assessee to have confirmed theliabilities having been existing as on that date,which the assessee failed to prove. On thequestion of lease rent also there was no payment made and assessee could not establish it as paid in the previous year relevant to the subject assessment year. In such circumstances the assesseecould only claim such allowance at the time whenthe actual payment is made proving the saidpayment. We do not find any reason to interferewith the order of the Tribunal in the saidassessment year. The issues raised being on facts we refuseto answer the questions of law and reject theappeal. No order as to costs. Sd/-K. Vinod Chandran, Judge jma Sd/-Ashok Menon, Judge APPENDIX PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER FOR 2004-05 ISSUED BY THE INCOME TAX DEPARTMENT TO THE APPELLANT DATED 28.12.2006. ANNEXURE B TRUE COPY OF THE ORDER ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS) TOTHE APPELLANT DATED 7.6.2017. ANNEXURE C the previous year relevant to the subject assessment year. In such circumstances the assesseecould only claim such allowance at the time whenthe actual payment is made proving the saidpayment. We do not find any reason to interferewith the order of the Tribunal in the saidassessment year. The issues raised being on facts we refuseto answer the questions of law and reject theappeal. No order as to costs. Sd/-K. Vinod Chandran, Judge jma Sd/-Ashok Menon, Judge APPENDIX PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER FOR 2004-05 ISSUED BY THE INCOME TAX DEPARTMENT TO THE APPELLANT DATED 28.12.2006. ANNEXURE B TRUE COPY OF THE ORDER ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS) TOTHE APPELLANT DATED 7.6.2017. ANNEXURE C TRUE COPY OF THE TRIBUNAL ORDER DATED 25.3.2009 ISSUED TO THE APPELLANT. ANNEXURE D TRUE COPY OF THE JUDGMENT OF THE HONOURABLE HIGH COURT IN WPC NO.31647 OF 2007 DATED 25.10.2007.