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2022 (5) TMI 1551 - ITAT DELHICessation of liability as mentioned u/s 41(1) - AO treating the impugned amount to the seized/non-existence, because of the fact that the liability was being shown outstanding for many preceding years and the assessee could not provide confirmations from the respective creditors and also failed to provide necessary details like PAN, address etc. of the creditors - CIT- A deleted the addition - HELD THAT:- Undisputedly the liabilities were outstanding since many previous year in the balance sheet of the assessee and the assessee has not written off the outstanding liabilities/creditors in its audited books of accounts and thus, it has to be presumed that the impugned outstanding liabilities/creditors were existing at the end of the Financial Year 2012-13 pertaining to Assessment Year 2013-14. As per mandatory requirement of section 41(1) of the Act, the AO entitled to make additions in the hands of the assessee where the liabilities/creditors seized to exist but in the present case, neither the assessee company has written off the impugned amount as bad debts in its books of accounts nor there was any other positive material on the record and in the hands of the AO showing that the impugned amount of the liabilities/creditors seized to exist during the relevant Financial Year. Therefore, we are unable to see any ambiguity, perversity or any valid reason to interfere with the findings recorded by CIT(A). Thus, we uphold the same. Grounds raised by the Revenue are dismissed.
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