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2020 (12) TMI 598 - AT - Income TaxBogus sundry creditors liability - addition inviting sec. 41(1) - HELD THAT:- No dispute about the assessee having recorded the sundry creditors liability in question as pertaining to material purchases in the regular course of business. There is no denial from the department side qua the clinching aspect the corresponding material purchases have already been accepted under the head regular revenue in the course of assessment itself - assessee had also successfully filed all necessary detailed evidence of the sundry creditors in remand report proceedings. It emerges from a perusal of the Assessing Officer’s remand record dated 30.03.2018 filed before the CIT(A) that he had verified the ledger account of the creditor parties with the bank statements and perused the balance(s) confirmation as well. Once the AO has allowed the assessee’s corresponding material purchases claim in the revenue account as a regular head of expenditure, the same very amount could not have been added as a bogus sundry creditor liability u/s 41(1) - when there is no indication about the said sum involving any cessation or remission of liability as per this tribunal’s co-ordinate bench decision in Income Tax Officer Ward 12(1) Kolkata vs. M/s Standard Leather Pvt. Ltd . [2016 (9) TMI 1437 - ITAT KOLKATA] no reason to accept Revenue’s arguments seeking to revive the impugned sec. 41(1) addition - Decided in favour of assessee.
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