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2017 (9) TMI 586 - HC - Income TaxAdditions u/s 41(1) - cessation of liability - Whether the ITAT erred in confirming the order of Commissioner of Income Tax (Appeals) deleting the additions made by the AO on the ground that the Assessee cannot choose to postpone the year in which the amount in respect of a liability ceases to exist is to be offered for taxation in terms of Section 41(1) of the Income Tax Act, 1961? Held that:- What has weighed with the ITAT in confirming the order of the CIT (A) is that some of these very creditors were reflected during the AY 2007-08. The Revenue had failed before the ITAT in challenging the order of the CIT (A) deleting the additions made by the AO for the said AY 2007-08. That order had become final - The assessment order for the said AY 2012-13 showed that the AO had discussed the writing off of such creditors against certain debit balances. The AO had disallowed the amount relating to debit balances against credit balances and by that action, the AO had taxed the sundry creditors indirectly - appeal dismissed - decided against appellant.
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