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2015 (9) TMI 182 - AT - Income TaxAddition u/s 41(1) - Held that:- In the facts of the present case, it is not possible to conclude that the debt has become unenforceable. It is well settled that reflecting an amount as outstanding in the balance sheet by a concern amounts to the concern acknowledging the debt for the purpose of Sec. 18 of the Limitation Act, 1963. Further, sundry creditors have been reflected in the balance sheet of the assessee and AO has confirmed that there was a liability standing at the end of the year. The outstanding balances reflected as payable to the four sundry creditors are the opening balances which had been carried forward from previous year. The issue as to the genuineness of a credit entry thus does not arise in the current year and this issue could only be examined in the year in which the liability was recorded as having arisen. The Department having accepted the balances outstanding in the previous year, it was not open by Ld. CIT(A) to confirm the addition on the ground that assessee could not prove the genuineness of the said transactions which were undertaken. Thus hereby delete the addition made by AO u/s 41(1) - Decided in favour of assessee.
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