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2021 (9) TMI 287 - AT - Income TaxAdditions u/s. 41(1) - Liability as extinguished and assumed the character of income as envisaged in section 41(1) - CIT(A) allowed the issue of the assessee and deleted the additions - HELD THAT:- Admittedly, these amounts were received prior to 2003 and was outstanding due to closure of assessee-company. The advances so received were adjusted to the receivables and reconciliation was filed. As on 31.03.2016, the advances received against sales amount is `Nil' as per the Balance Sheet. Therefore, the liability cannot be construed to have been extinguished and assumed the character of income as envisaged in section 41(1) of the I.T. Act. In this context, we rely on the judgment in the case of CIT v. Shri Vardhman Overseas Ltd. [2011 (12) TMI 77 - DELHI HIGH COURT]wherein it was held that the liability appearing in the Balance Sheet tantamount to acknowledgement of debt. Therefore, it was held by the Hon'ble High Court that the liability has neither ceased to exist nor there is a remission of liability in terms of section 41(1) of the I.T. Act. In view of the judgment of the Hon'ble High Court of Delhi (supra) and aforesaid reasoning, we uphold the order of the CIT(A). - Decided against revenue.
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