Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 559 - AT - Income TaxCondonation of delay by the CIT(A) - non-service of the assessment order, the assessee was prevented by a reasonable cause in filing the appeal before the Ld. CIT(A) - HELD THAT:- When the Bench inquired from the Sr. DR if the Department was willing to challenge findings of CIT(A) vis-à-vis the non-service of assessment order by filing an Affidavit on behalf of the Department in this regard, DR replied in the negative. In such a situation, we are of the considered view that the Department is merely trying to grab at straws to somehow make a case that the condonation of delay being bad in law would nullify the First Appellate Order on the merits of the case. Therefore, we out- rightly reject this contention of the Department that the CIT(A) had wrongly condoned the delay as the same is not established by any documentary evidence. We are of the considered view that the condonation of delay lies within the discretionary powers of the First Appellate Authority and he has exercised the same in favour of the assessee after duly considering the facts and record. Accordingly, ground No.2 of the Department’s appeal stands dismissed. Unsecured loans - Addition u/s 41(1) - AO acknowledges that the impugned amount were never debited to the profit and loss account as an expenditure in the year they were received - HELD THAT:- In the present case, the assessee had not debited the aforesaid liability to its Profit and Loss account in any of the earlier years (admitted by the AO at Pg-7 and by Ld. CIT(A)) and thus, the question of receiving any benefit, allowance or deduction by the assessee in earlier years, as specified in (i) above, has not been fulfilled in the instant case and, therefore, there lies no application of section 41 (1) in the instant case. Further, the assessee had also not received any benefit either in cash or otherwise during the relevant year. In fact the said sum will decrease the cash inflows of the assessee in the subsequent years. The assessee has not written back the liability during the relevant year and the said liability continued to appear as the closing liability and has been carried forward to next year. Thus, condition (ii) above has also not been fulfilled. Therefore, it can be said that both the conditions needed for the application of section 41(1) of the Act have not been fulfilled in the instant case and, therefore, the addition made u/s 41(1) of the Act would have no legs to stand and has been rightly deleted by the Ld. CIT(A). Hon'ble Punjab & Haryana High Court in the case of CIT Vs. G.P International Ltd [2009 (12) TMI 33 - PUNJAB AND HARYANA HIGH COURT] has held that since the assessee was showing the aforesaid liabilities in his books and has not written off the same, the provisions of section 41(1) are not applicable. Appeal of department dismissed.
|