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2012 (7) TMI 451 - AT - Income TaxAddition on account of sundry creditors - deemed income u/s 41(1) - AO observed that in 21 cases there was no change in the outstanding balance in AY 2007-08 and 2008-09 - Assessee did not furnish the details called for but submitted copies of purchase bills in the case of 9 parties - In case of 3 parties the letters issued u/s 133(6) were returned undelivered by the postal authorities with the remarks “not known”. The remaining 5 parties stated that as per their books of accounts, they had no transactions with the Assessee for Financial years 2005-06 to 2007-08 and as such no amount is due to them from the Assessee - Held that:- Appellant was not able to explain how the appellant could ever repay these parties because he neither knew their correct addresses or any details of the agents through whom the purchases were made from these parties - Liability has ceased to exist and accordingly taxed it u/s 41(1) of the Income Tax Act - With respect to the action of CIT (A) in deleting the addition with respect to 5 parties CIT(A) has given a categorical finding that the enquiry made by the AO was not proper as the bills issued by the parties related to period prior to 31.3.2001 whereas the AO had asked those parties about the transactions carried out in FY 2005-06 to FY 2007-08. The existence of these 5 parties was therefore not in doubt - CIT (A) deleted the addition - no infirmity in the order of CIT(A) and therefore no interference is called for in his order
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