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2017 (1) TMI 48 - AT - Income TaxAdditions made u/s.41(1) - cessation of the liability - Held that:- The assertions of the assessee that due to financial crisis faced by the assessee due to mining recession and closure of mining in Goa , these payments of ₹ 51,191/- could not be made and also that ₹ 26,746/- was written back in the financial year ended on 31-03-2014 requires verification and enquiries by the AO. The AO is directed to verify as to whether the assessee has written back an amount of ₹ 26,746/- in the year ending 31/03/2014 and if it be so, then additions to the extent of ₹ 26,746/- shall stand deleted as no prejudice is caused to the Revenue as the amount stood written back and offered for tax albeit in the assessment year 2014-15. While with respect to ₹ 25,445/-, assessee has to prove before the AO that the said amount was still payable by the assessee as on 31-03-2012 for which necessary confirmations and verifications are required and the matter is set aside and restored to the file of the AO for necessary verifications and enquiries and de-novo adjudication of the issue on merits. Write off of bad debts - Held that:- The assessee had claimed that it is due to recession in mining and due to closure of mines , the amount has become bad and irrecoverable , this contentions of the assessee has also remained unsubstantiated as no financials of Surface Tech were brought on record. We have perused the financial statement of the assessee for the year ended 31-03-2012 filed in the paper book before the tribunal (pages 1-10) which shows a healthy financial position of the assessee as the share capital is of 70 lakhs while Reserves and Surplus are to the tune of ₹ 4.06 crores. In our considered view , the order of learned CIT(A) is not sustainable in law and needs to be set aside and matter is to be remanded and restored to the file of the AO for de-novo adjudication of the issue on merits after making necessary enquiries and verifications as he may deem fit in order to decide this issue on merit. Addition u/s 40A - payment in cash during the relevant previous year towards ‘Repairs and Maintenance’ and also towards ‘Salaries and wages’ - Held that:- . The contentions that since the assessees’ cheques were bouncing and hence parties were not accepting cheques and insisting on cash is also not proved before us as no evidence to that effect is on record. Rather perused of the financial statement of the assessee for the year ended 31-03-2012 filed in the paper book before the tribunal (pages 1-10) shows a healthy financial position of the assessee as the share capital is of 70 lakhs while Reserves and Surplus are to the tune of ₹ 4.06 crores. All these contentions and assertions raised by the assessee need verification by the Assessing Officer and appellate order of the Ld. CIT(A) cannot be sustained as the learned CIT(A) has not undertaken the required verification and accepted the contentions of the assessee without any enquiry / verification. In our considered view, this issue needs to be set aside and restored to the file of the AO for de- novo adjudication of the issue on merits by the AO after conducting necessary verification and enquiry as he may deem fit in order to decide the issue on merits.
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