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2020 (10) TMI 1186 - AT - Income TaxAddition u/s 68 - addition made by the AO on account of credit balance appearing in the accounts of concerned two creditors having been found to be bogus - alternative recourse to sub-section (1) of section 41 suggested - HELD THAT:- Provisions of section 41(1) can be invoked only when trading liability incurred by the assessee is subsequently found to have seized to exist in the relevant year and the onus in this regard is on the AO to establish on evidence that there was indeed remission or cessation of such liability. In the present case, this onus was not discharged by the AO and addition on account of balance appearing in the name of concerned two creditors was made by him u/s. 68 of the Act by treating the same as unexplained cash credit because of the failure of assessee to establish mainly the genuineness of said creditors. This position clearly apparent from record, we are of the view that recourse at this stage cannot be made to sub-section (1) of section 41 to confirm the addition made by the AO u/s. 68 as sought by the ld. DR. Uphold the impugned order of CIT(A) restricting the addition made by the AO u/s. 68 thereby giving a which represented the opening balance and pertained to transactions of earlier year. - Appeal of Revenue dismissed.
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