CIT Vs. CHIPSOFT TECHNOLOGY PVT LTD

JUDGEMENT

(1.) THE present appeal by the revenue is directed against a judgment of the Income Tax Appellate Tribunal (ITAT) dated 17-10- 2101, in ITA 2108/Del/2010.

(2.) ADMIT. The following question of law arises for consideration:

(3.) IT is argued by Mr. Rajpal, that the ITAT fell into error in overlooking the fact that the amount due to 170 employees remained unchanged and static for about 6-7 years and no payment was made during the intervening period. Furthermore, the assesse did not reveal that its employees were actively pursuing their claims, and had taken any steps at all to recover their dues. The assesse did not file any correspondence with its employees, to substantiate its argument; even in the assessment proceedings it was unable to furnish particulars about its employees. The liability therefore, had ceased. It was urged that even if it were assumed that at some point the liability existed, the lapse of time, and the resultant defences available to the assesse under the Limitation Act, justified the AO's inclusion of the said amounts, on the ground of cessation of liability. It was underlined that the ITAT erred in not holding that benefit had accrued to the assesse by virtue of the wage liability becoming time barred. The revenue relied on Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Income-tax 196 ITR 845 (Cal).