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2016 (2) TMI 75 - AT - Income TaxDisallowances of cessation of liability u/s. 41(1) - CIT(A) deleted the addition - Held that:- View of CIT(A) is fortified by the Hon’ble Gujarat High Court in case of Commissioner of Income Tax vs. Dhobibhai Ramjeelal Atara [2014 (2) TMI 794 - GUJARAT HIGH COURT] wherein it has been held that provisions of section 41(1) of the Act would apply in case where there has been remission or cessation of liability during the year under consideration subject to conditions contained in statute being fulfilled. Additionally, such cessation or remission has to be during previous year relevant to the assessment year under consideration. Even in case before us both elements are missing there is nothing on record to suggest that there was remission or cessation of liability that too previous year relevant to the assessment year under consideration. In view of above, order of CIT(A) is upheld whereby he has deleted the addition of disallowance of cessation of liability made by AO u/s. 41(1) of the Act - Decided in favour of assessee Unaccounted purchase and sale of share - CIT(A) deleted the addition - Held that:- Assessing Officer was of the view that assessee should have shown 62,272/- shares of Spectra Industries as closing stock while assessee had been showing 61772 shares i.e. 4791 as per demat account 5698 in the pool holding account. The details of closing stock furnished revealed that assessee had shown 62272 shares of Spectra Industries and not 71772 shares as stated by Assessing Officer based on demat account. The stand of assessee shortage of 500 shares in demat and pool holding as on account of transaction of purchase of 7500 shares of Spectra Industries on 29-03-2007 out of which there was short delivery of 500 shares at the year and or found plausible by CIT since it is as per system of stock exchanges pay in and pay out, delivery of shares normally comes after 3 days and in case there is short delivery from stock then exchange proceedings to auction shares and only after 7-8 days thereof brokers are able to confirm whether delivery of shares had come or not or whether they got close out opportunities of the shares. Sell delivery then it will show short to the extent in the pool account until brokers get confirmed from exchange. In closing, as per books and account total stock was shown as 62272 shares in not 61772 shares as assumed by Assessing Officer. Accordingly, CIT(A) held that there is no reason for addition on the basis of shortage of delivery of 500 shares since contra account of broker also shows stock at 62272 shares. Accordingly, CIT(A) was justified in deleting addition of ₹ 14,490/-, same is confirmed.- Decided in favour of assessee
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