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2013 (4) TMI 638 - AT - Income TaxCessation of trading liability U/s 41(1)(a) - Existence of liability which is of three years - Held that:- We observe that ld CIT(A) in the impugned order has stated that the AO has not established that the liability in respect of those creditors had ceased to exist within the meaning of section 41(1) of the Act - It was submitted by the assessee before the authorities below that assessee's business was discontinued due to loss - Therefore, The loan taken from State Bank of India was outstanding for over five years - The sundry creditors were outstanding on account of non-availability of sufficient funds - In view of above, ld CIT(A) has stated Outstanding of creditors even for more than three years cannot be considered as sufficient evidence of cessation of liability - Assessee has not written back the amount payable to these creditors in the books of account We do not find infirmity in the order of ld CIT(A) directing the AO to delete the amount which is outstanding even for more than three years - We accordingly uphold the order of ld CIT(A) and reject grounds of appeal taken by department - Appeal is dismissed in favour of Assessee.
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