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2012 (7) TMI 392 - ITAT, BANGALOREAddition u/s 41(1) on account of unexplained sundry creditors - CIT(A) after admitting additional evidence found that the assessee was dealing with most of the parties in the subsequent year and liability had been paid up - CIT(A) while deleting the addition – Held that:- unless there is a cessation of liability or there is a remission of liability by the creditor, the liability subsists and the assessee having not unilaterally written back accounts of the aforesaid creditors in its profit and loss account, the provisions of section 41(1) of the Act and explanation 1 thereto, are not attracted - there is nothing to suggest that the assessee obtained any benefit either by way of remission or cessation of any liability while the aforesaid liabilities are continually admitted by the assessee in their balance sheet - AO or the ld. CIT(A) have nowhere doubted the genuineness of purchases - appeal of the Revenue is dismissed Addition on account of unexplained expenses – AO added an amount on account of expenses payable, the assessee having not furnished details of expenses and evidence of payment - assessee contended that the ld. CIT(A) was not justified in upholding the addition out of expenses payable at the end of the year nor any benefit accrued to the assessee – Held that:- No basis to upheld addition while invoking provisions of sec. 41(1) of the Act - CO filed by assessee is allowed
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