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2014 (1) TMI 552 - ITAT KOLKATASuppressed purchases - Held that:- The Assessing Officer observed difference in the amount of purchases recorded by assessee from Shri K.S. Ahluwalia and sales shown by that party - The Assessing Officer did not confront the assessee with the details received from Sh. K.S. Ahluwalia showing the sales made to the extent of Rs.46.04 lakh - The ld. CIT(Appeals) was not justified in deleting this addition by observing that increase in such purchases would affect the closing stock and thus neutralise the difference - The issue was set aside for fresh adjudication. Addition on account of cessation of liability - Held that:- The sundry creditor's account in the assessee's books for the earlier year as on 31.02.2007 shows that a sum of Rs.16.23 lakhs was debited on 31.03.2007 with the remarks "Sundry creditors written off" - This amount debited to the account of Roy Industries was credited to the 'Other income' with the remarks "Credit balance written back" totalling Rs.72,51,225.80 - This amount of Rs 72.51 lakh included a sum of Rs.16.23 lakh, which fact was observed by ld. CIT(Appeals) for deleting this addition - As per section 41(1) - Charge of income is attracted in the year in which the cessation or remission takes place - In assessee's case the cessation or remission took place in the preceding year when the assessee debited the account of this party with a sum of Rs.16.23 lakhs - No event happened in the current year by means of which the assessee received any remission or cessation of liability on this account - The CIT(Appeals) was justified in deleting this addition because the amount stood remitted in the earlier year and not the current year - Decided against Revenue.
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