Itxa/1405/2008 Of The Commissioner Of Income Tax -11, Mumbai v. Jahangir Gulabbhai And Billimoria And Daruwalla , Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1405 OF 2008 The CIT-11, Mumbai )..Appellant V/s. Jahangir Gulabbhai & Bilimoria & ) Daruwalla, Mumbai )..Respondents ---- Mr.Vimal Gupta with Mr.P.S.Sahadevan for the appellant. Mr.F.Andhyrjina Sr.Counsel i/by N.C.Dalal & Co. for the respondents. ---- Coram : F.I.Rebello & R.S.Mohite,JJ Date : 16.02.2009. PC 1. Revenue had formulated as many as six questions. In our opinion, question-(a) would cover all the said questions. Question-(a) reads as under :- (a) Whether on the facts and circumstances in the case and in law, the Hon’ble ITAT was right in deleting the addition of Rs.12,21,694/- made on account of treating the sundry clients deposits as income the Assessee u/s.41(1) without appreciating the fact that the assessee inspite of repeated opportunities given during the assessment proceedings failed to furnish any details regarding the names and addresses of the persons from whom these deposits were purported to have been received ? 2. The said issue was considered by the Tribunal in : 2 : paragraph-9 of its order. The Tribunal firstly recorded the finding that the assessee was following Cash System of Accounting. Secondly, the Tribunal recorded the finding that the amount represents outstanding amount from its clients and therefore, the question of assessing the same as income does not arise considering the system of accounting followed by the assessee. The Tribunal noted the provisions of Section 41(1) apply only where the assessee has obtained whether in cash or in any other manner whatsoever any amount in respect of loss, expenditure or trading liability incurred by the assessee in the earlier years or has obtained some benefit in respect of trading liability by way of remission or cessation thereof. The learned Tribunal thereafter proceeded to consider the other aspects and went on to hold that the addition cannot be sustained and consequetly set aside the order of the learned CIT(A) on this issue. 3. In our opinion, it is not possible to hold that the amounts in the hands of the assessee is their income as the same has not been written off. In the light of that, question as framed would not arise. Consequently, appeal dismissed. (R.S.Mohite,J) (F.I.Rebello,J)