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2021 (12) TMI 303 - AT - Income TaxAddition u/s.41(1) - cessation of liability - outstanding sundry creditors - AO invoking provisions u/s.41(1) in respect of outstanding sundry creditors is that the notice u/s.133(6) sent by the AO to the sundry creditors remain unresponded and those parties were not produced by the assessee for examination by the ld. AO - HELD THAT:- We find that the assessee had duly furnished the complete ledger account of the sundry creditors for the year under consideration as well as for the subsequent years. Except for M/s. Sangham Diamonds, the assessee had even furnished the ledger account of the creditors duly confirmed by them before the ld. AO. It is not in dispute that all these sundry creditors have a valid PAN. All these sundry creditors have been duly discharged by the assessee in subsequent assessment years. We also find as on 31/03/2015, the assessee had not written back the sundry creditors to its income as no longer payable, hence, the liability had not ceased to exist and assessee had duly acknowledged his debt payable to these sundry creditors. Hence, in these circumstances, in any case, irrespective of the payments made in subsequent years, the provisions of Section 41(1) could not come into operation at all. These points have been duly appreciated by the ld. CIT(A) and hence, we do not find any infirmity in the order of the ld. CIT(A) granting relief to the assessee. Accordingly, the ground raised by the revenue is dismissed.
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