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2012 (5) TMI 30 - HC - Income TaxAddition made on account of cessation of liability – various creditors are very old and no interest has been paid on these loans - AO held that the liability incurred in regard to the purchase from the parties as claimed have seized to exists – ITAT deleted addition made by AO - Held that:- ITAT is justified in taking the view that as assessee had continued to show the admitted amounts as liabilities in its balance sheet the same cannot be treated as assessment of liabilities - merely because the liabilities are outstanding for last many years, it cannot be inferred that the said liabilities have seized to exist – it is on part of AO to prove that the assessee has obtained the benefits in respect of such trading liabilities by way of remission or cessation which he fails to do - in the absence of the creditor, it is not possible for the authority to come to a conclusion that the debt is barred and has become unenforceable – in favour of assessee.
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