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2013 (11) TMI 525 - AT - Income TaxAddition u/s. 41(1) read with section 28(iv) of the Act - cessation of liability - Treated advance against export received from Amas Mauritius Ltd. by the assessee on 24.1.1997 as its income by treating the said transaction as sham transaction in the assessment year under consideration – Held that:- Assessee received a sum of Rs. 3,04,38,400/- from M/s. Amas Mauritius Ltd. on 24.1.1997 as an advance for the purpose of export of goods and the same has been appearing in the books of account of the assessee till date. It is also fact that the assessee neither has made export against the said advance nor the amount has been returned till date. Moreover, the assessee has admittedly stopped export business and is in the business of advisory as well as in share dealing. It is not in dispute that the said amount is shown as advance in the balance sheet of the assessee. The said liability is also shown as on 31.3.2007. Therefore the liability has been acknowledged by the assessee. Since amount has not been written off by the assessee in its books of account, it cannot be said that the liability has ceased to exists - Hon'ble Madras High Court has held in the case of CIT Vs. Tamilnadu Warehousing Corporation [2006 (10) TMI 118 - MADRAS High Court] that the amount representing liabilities which were shown year after year could not be added back u/s. 41(1) of the Act, 1961 – Decided in favor of Assessee.
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