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2023 (5) TMI 703 - AT - Income TaxAddition of Sundry Creditors - Appellant could not get the confirmation of the parties - Appellant has submitted that he could not obtain the confirmation as they are very old creditors - CIT (A) held it is apparent that liabilities on account of creditors appearing in the books of Appellant have ceased to exist as the parties are not acknowledging their dues from the Appellant and, therefore, in view of Explanation 1 to Section 41(1), there is cessation of liability by the concerned parties - Whether revenue can bring the expenditure incurred in the earlier years to be taxed in the subsequent years? - Whether the revenue unilaterally deem the liabilities ceased as time went by? HELD THAT:- The revenue can bring the expenditure incurred in the earlier years to be taxed in the subsequent years if it is proved that the expenditure incurred was bogus and the revenue can deem the liabilities ceased as time went by taking into consideration, the period of non-payment of dues and the intention to pay the dues. Having examined the expenses payable and the detailed order of the ld. CIT(A) how the expenses are not found to be genuine, we hold that the expenses which have not been paid for the last six years and the expenses which have been incurred for Amit Saree and Rangoli Collection pertaining to F.Y. 2007-08 and all other expenses wherein not even a single creditor had demanded the money back nor the assessee made any attempt to repay the same. CIT(A) has correctly examined the invoices, period and purpose. Hence, we decline to interfere with the order of the ld. CIT(A) - Decided against assessee.
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