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2013 (4) TMI 64 - AT - Income TaxAddition u/s 41(1) - cessation of liabilities - Held that:- The liability pertains to the preceding year where copies of accounts of all sundry creditors are placed on record and were available before both the authorities below. The said balances are outstanding in the following years as well is a matter of record and there is no dispute to the said fact. The assessee has not obtained any benefit out of such liability which is not ceased to be a liability and the assessee has not written back such liability unilaterally in its books of account. Therefore, such liability cannot be a subject matter of section 41(1) of the Act. Even if confirmation copies of accounts and books of account are not produced, the copies of audited accounts for the impugned year and the assessment record of preceding year was available with the A.O. The AO cannot make the assessment on conjectures, surmises or on the basis of suspicion. - Additions made u/s 41(1) directed to be deleted. Addition of family loans - Held that:- The arrangements made by the DR has no substance in the matter in this regard. The assessee having proved the identity, capacity and creditworthiness of said persons and therefore, cannot be subject matter of addition. Thus, additions have wrongly been confirmed by the CIT(A) and the same are directed tobe deleted. Disallowance of car expenditure and car depreciation - Held that:- As the AO has not made any discussion in the body of the order and has simply disallowed expenses without application of mind, which has been confirmed by the CIT(A). No such disallowance can be made without passing areasoned order. Therefore, such addition made, is directed to be deleted.
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