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2018 (6) TMI 1611 - ITAT BANGALOREAddition u/s. 41(1) - remission of liability or cessation of liability - material evidence to show that liability of the assessee in respect of the aforesaid creditors was either remitted or ceased to exist - HELD THAT:- AO after noting several liabilities in the form of sundry creditors existing in the balance sheet for a long time, took the view that wherever some payments have been made to the creditors during the previous year by the assessee, those liabilities can be said to be existing; and wherever no payment was made towards outstanding liability during the previous year, the liability in respect of such creditors can be taken as either having been remitted or no longer in existence. This approach was not correct in law and the CIT(Appeals) has rightly deleted the addition on the basis that there should be evidence to show either remission of liability or cessation of liability and in the absence of such evidence, no addition can be made u/s. 41(1). It is no doubt true that the assessee filed evidence before the CIT(Appeals) to show some payments were made even in respect of some of the outstanding creditors during the previous year whose liability was considered as income u/s. 41(1) by the AO. CIT(Appeals) has, however, not deleted the addition on the basis of any additional evidence. The grievance projected by the revenue in the grounds of appeal is therefore devoid of any merit - Decided against revenue.
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