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2023 (2) TMI 114 - AT - Income TaxAddition u/s 41 - trade deposits receipts - addition as liability of the assessee ceases to a exist - AR submitted that neither Section 41(1) of the Act nor Section 68 of the Act applies to the trade depositors who have given their full name and address, PAN, and the amount of deposits is as per custom and usage and practice of business and the said deposits were received by cheque through banking channel and amount being trade liability and that no remission or cessation is done - HELD THAT:- It is pertinent to note that the assessee’s books, at no point of time, was rejected by the Assessing Officer. AO at no point of time stated that the trade deposits were not that of trade depositors but has element of liabilities except to that of business of the assessee. The contention of the assessee that the assessee has not paid the amount in respect of these trade depositors as it being amount received as trade deposits from trade merchants who are known and identifiable persons and the amount received during the course of business and creditworthiness is already proved through the full name, address, PAN and the amount of deposits as well as the customers usage and practice of business with these trade merchant. Merely not filing confirmation will not shun away that the trade credits and deposits were for purchase of goods and that recovery of the said amount has not become impossible and, therefore, the same was not being written off by the assessee in the books of account as element of these amounts were not coming under the purview of Section 41(1) - Appeal of assessee allowed.
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