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2016 (6) TMI 928 - AT - Income TaxAdditions u/s 41(1) - cessation of Trading liability - Held that:- We find that the provisions of section 41(1) of the Act could be invoked towards cessation of liability only in the event of revenue proving the fact of assessee deriving some benefit out of this transaction. In the instant case , the assessee claims that the liability has been settled in the subsequent financial year which fact has not been verified by the Learned AO. Hence in the facts and circumstances, we deem it fit and appropriate, in the interest of justice and fair play, to set aside this issue to the file of the Learned AO , with a direction to verify the subsequent settlement made by the assessee to the concerned sundry creditor and if proved, no addition need to be made by the Learned AO. - Decided in favour of revenue for statistical purposes. Disallowance of brokerage payment - Held that:- We find from the confirmation letters of 5 suppliers that they had categorically stated that the assessee was introduced to them through a broker. The broker in the instant case needs to be understood only as M/s Timespac India Ltd. The revenue was not able to produce any contrary evidence in this regard. However, we agree with the contention of the Learned DR that these confirmations were dated in the fag end of December 2011 from different locations in India, it would not have reached the Learned AO before the completion of assessment proceedings. Hence, in these facts and circumstances, we deem it fit and appropriate, in the interest of justice and fair play, to set aside this issue to the file of the Learned AO, with a direction to the Learned AO to verify the confirmations filed by the 5 suppliers and decide the issue in accordance with law. - Decided in favour of revenue for statistical purposes.
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