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2015 (9) TMI 591 - AT - Income TaxUnexplained liabilities - Held that:- As far as the accounts of M/s. Bhagyoday Enterprises and M/s. Bhavana Trading Company, both under proprietorship of one Mr. A.P. Tripathi were not required to be disbelieved because of the reason that the liability outstanding as on 31st March, 2007 was not an old liability; hence, could not be considered as a doubtful liability. Since, the accounts were alive and the assessee was settling the accounts by making payments through account payee cheques, therefore, it is not proper as well as justifiable to hold that those liabilities have ceased to exist so as to invoke the provisions of Section 41(1) of IT Act. We, therefore, direct not to make any addition in respect of these two accounts by invoking the provisions of Section 41(1) of IT Act. In respect of Akshar Enterprises we have inquired from learned AR that since how long the liability was outstanding and whether the assessee had made any attempt to liquidate this liability. We have also inquired that whether this amount was squared up by making payment in any of the subsequent years. In the absence of suitable evidence on record, so as to satisfy our above query, we hereby deem it proper to refer this part of the dispute back to the stage of the AO to inquire from M/s. Akshar Enterprises about the nature of the outstanding liability and whether the assessee has squared up the account by making the payment. Naturally if the liability is in existence then it should have been paid by the assessee for which a satisfactory explanation should be offered with supporting cogent evidences. With these directions, this part of the ground is restored back to AO for re-adjudication - Decided partly in favour of assessee. Addition u/s. 40A(3) - cash paid in excess to ₹ 20,000/- - Held that:- In total the assessee had made cash payment to eleven parties totaling ₹ 8,34,829/- and in the absence of any satisfactory explanation 20% of the same amounting to ₹ 1,66,968/- was taxed in the hands of the assessee. When the matter was carried before the First Appellate Authority, learned CIT(A) has held that no explanation was offered; hence, affirmed the addition. Even before us this ground has not been contested, therefore, we hereby affirm the findings of the authorities below and dismiss this ground.- Decided against assessee.
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