Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 543 - AT - Income TaxAddition as cessation of liability u/s 41(1) - proof of cessation of liability - Held that:- There is no dispute that in furtherance of its business, the assessee had made purchases from various persons. There is no denying that one of the parties, namely, M/s Hoshiar Singh Suresh Chandra Sarees Pvt Ltd. could not be produced before the AO. At the same time, it is an undisputed fact that notice u/s 133(6) of the Act was served upon the said party. Nothing prevented the AO to issue summons u/s 131 of the Act to the said party. Be that as it may, fail to understand how the provisions of section 41(1) of the Act apply on the facts of the case in hand. There is no question of cessation of liability and, therefore, the CIT(A) grossly erred in confirming the addition under the said section. There is no finding by the Assessing Officer that the purchases were bogus and corresponding sales are also bogus - no corroborative evidence brought on record to make addition - decided in favour of assessee. Addition under various heads - Held that:- AO has made addition taking the g.p. rate as basis, the CIT(A) confirmed part disallowance on a different reasoning. The basis given by the first appellate authority is by comparing the turnover of immediately preceding assessment year with that of the year under consideration. The ratio so determined by the CIT(A) does not have any strong footing. Each assessment year is a separate unit and, therefore, the basis adopted by the CIT(A) is erroneous. However, even before me, the assessee fairly admitted that certain expenses are not properly supported by bills and vouchers. Therefore addition of ₹ 50,000/- should meet the ends of justice. Accordingly direct the Assessing Officer to restrict the disallowance to ₹ 50,000/-. Ground No. 2 is partly allowed.
|