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2022 (11) TMI 658 - AT - Income TaxAddition u/s. 41(1) - bogus creditors - cessation of liability in case of outstanding of above sundry creditors - addition by observing that the liability of alleged sundry creditors had ceased to exist in the case of assessee - HELD THAT:- The liability which is appearing in the books of account for which the assessee has claimed purchases in the P & L account is bogus and both the sundry creditors, M/s. Anurag Packaging & M/s. Maa Kamakhya Packaging, in our considered view are fictious creditors and in real term there is no liability to pay. Therefore the given facts and circumstances suggests that the liability to pay the creditors, M/s. Anurag Packaging & M/s. Maa Kamakhya Packaging, had ceased to exist being bogus in nature as there is no real business concern selling/purchasing of goods and these are merely paper adjustment entry and since the liability in books ceased to exist, provisions of section 41(1) of the Act are attracted. Thus, we confirm the addition made in the case of M/s. Anurag Packaging & made in the case of M/s. Maa Kamakhya Packaging made u/s. 41(1) treating it as cessation of liability. Grounds are partly allowed.
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