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2018 (8) TMI 711 - AT - Income TaxAddition u/s 41 - cessation of liability towards sundry creditors - Assessee added the amount towards written off of sundry creditors in the amount of sales and shown the gross profit @6.46% - Held that:- the C.A. who has prepared the Trading A/c for the assessee for assessment year under appeal, has not prepared the accounts property and as such, the Income Tax Authorities are required to be vigilant to see that such type of practice should not have followed in future. The action of the concerned C.A. is wholly in appropriate and we do not approve his conduct in preparing such a Trading Account. The assessee maintained books of account which are audited and the A.O. has not pointed out any specific defect in maintenance of the books of account by the assessee. The book results of the assessee have not been rejected under section 145(3) of the I.T. Act. There was no justification to disbelieve the purchases made by assessee in earlier year. Therefore, there is no reason to make such addition against the assessee on account of loss considering the same as undisclosed income of the assessee. Ultimately, assessee has declared income on account of written off creditors. Therefore, the claim of assessee should not have been rejected by the A.O. No additions - Decided against the revenue.
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