Hon'ble Judges/Coram:
Chandra Poojari, Member (A) and George George K.

ORDER

George George K., Member (J)

1. The above appeal was disposed of by the ITAT vide its order dated 31.01.2018. The Revenue filed Miscellaneous Petition in MA No. 263/Bang/2018 for the limited purpose of non-adjudication of ground Nos. 4 and 5 by the ITAT in its order dated 31.01.2018. The MP filed by the Revenue was allowed by ITAT vide its order dated 28.09.2018. The relevant finding of the ITAT reads as follow:-

"3. From the discussion in para 3 of the order (supra), it is clear that the mistake that crept into the Tribunal order for Assessment Year 2012-13, in the case on hand, was that grounds 4 and 5 have not been adjudicated by the tribunal. These grounds are extracted hereunder:-

"4. On facts of the case, whether the learned CIT (Appeals) is right in allowing the appeal of the assessee on the issue of advances received against sales/services as disallowed under Section 41(1) without any valid reasoning. The learned CIT (Appeals) has held that these payments are live credits, whereas the business operations of the assessee company was ordered to close on 3.9.2003 by the State Govt. of Karnataka.

5. On facts of the case, the learned CIT(Appeals) ought to have appreciated that the assessee is not doing any business since 3.9.2003. Hence, the liability shown in the balance sheet cannot be advances received against sales/services. Hence, liable to be added under Section 41(1) of the Act."

4. In the above circumstances, we recall the impugned order of the Tribunal in the case on hand in ITA No. 1223/Bang/2017 dt. 31.1.2018 for Assessment Year 2012-13 for the limited extent of adjudication of grounds 4 & 5 (supra) raised before the Tribunal as they were not adjudicated therein.

5. The Registry is directed to refix the hearing of the case, in due course, by issue of notice to both parties.

6. In the result, Revenue's Miscellaneous Petition for Assessment Year 2012-13 is allowed as indicated above."

2. Brief facts of the case are as follow:

An amount of Rs. 6,03,90,079 was disallowed u/s. 41(1) of the I.T. Act and added to the total income by the Assessing Officer vide assessment order completed u/s. 143(3) of the I.T. Act (order dated 13.02.2015). The relevant finding of the Assessing Officer reads as follow:-

"4.0 Advance received against sales/services : It is seen that assessee company has Advance received against sales/services of Rs. 6,03,90,079/- as of 31.03.2012 under current liabilities. Assessee company was asked to furnish the details of trade payables along with the movement there in. Vide letter dated 27.10.2014, the assessee company submitted :

"These amount have been received prior to 2003 against services/sales rendered by the company. Major portion have been received from Govt. departments to be adjusted to receivables after reconciliation."

4.1 Assessee has not furnished any other details. The contention of the assessee company is not acceptable. These amounts were received prior to 2003. It is seen that even after the Government of Karnataka, vide order dated 03.09.2003 directed to stop all business activities of the assessee company, the company is yet to reconcile the advances which the company itself claims to have received from the Government departments and as the Government has directed that all business activities has to be stopped, it is highly unlikely that there would be any advance liabilities. Hence, as assessee has not reconciled and adjusted the receivables, the amount of Rs. 6,03,90,079/- is disallowed u/s. 41(1) and added to total income."

3. Aggriev........