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2013 (2) TMI 426 - HC - Income TaxAgency commission to foreign agent Held that:- When the factum of actual receipt of sale proceeds to the extent of net invoice amount is established beyond any doubt, there is no justification in overlooking upon those speaking facts on the technical ground that the assessee has claimed the DEPB benefit on the gross amount of the invoice. The DEPB claim was made by the assessee on the basis of permission granted by the RBI and that has nothing to do with the actual amount of export sales proceeds received by the assessee in the form of convertible foreign exchange - Assessee not responsible for an additional income Against the revenue. Addition u/s 41(1) cessation of liability - AO required the assessee to furnish confirmation from the creditors with their complete details Assessee could not satisfy the AO on this issue AO invoked Section 41(1) Held that:- Remission has to be granted by the creditor Unilateral act on the part of the debtor cannot bring about a cessation of his liability - cessation of the liability may occur either by reason of the operation of law, i.e. on the liability becoming unenforceable at law by the creditor and the debtor declaring unequivocally his intention not to honour his liability, or a contract between the parties, or by discharge of the debt Assessee has shown the said amount as its outstanding liability in the balance-sheet if the revenue wanted the tax amount invoking Section 41(1) of the Act, onus was on the revenue to bring some positive material Further in the case of Sugauli Sugar Works (P.) Ltd. [1999 (2) TMI 5 - SUPREME COURT] it was held that the principle that expiry of the period of limitation prescribed under the Limitation Act could not extinguish the debt but it would only prevent the creditor from enforcing the debt, has been well settled Against the revenue.
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