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2023 (12) TMI 458 - AT - Income TaxUnexplained Sundry Creditors - Cessation of liability in respect of some creditors - HELD THAT:- The assessee filed primary details before the AO. Subsequently, the AO issued notices u/s 133(6) to creditors to confirm transactions with documentary evidence through e-mail ID. The notices were issued through ITBA Portal. The confirmation/reply were not received from all the parties regarding outstanding balances as on 31.03.2016. It was submitted that the AO had not issued any show cause notice before making any addition or intimation to the assessee for non-reply from the various parties and made addition without confronting the assessee about the non-receipt of the replies by the Assessing Officer. Absence of reply from the creditors do not entitle the Assessing Officer to treat the creditors as bogus without bringing any evidence on record to prove the payable are not indeed not required to be paid. Thus considering applicability of provisions of section 41(1) and the judgments in CIT v. Vardhman Overseas Ltd [2011 (12) TMI 77 - DELHI HIGH COURT] referring to the judgment in the case of Jay Engineering Works Ltd.[2007 (9) TMI 263 - DELHI HIGH COURT] and applying the ratio laid down the case of CIT v. T. V. Sundaram Iyengar & Sons Ltd[1996 (9) TMI 1 - SUPREME COURT] under sec. 28 of the IT Act, considered the applicability of clause (a) of subsection (1) of section 41 as to what constitute remissions or cessation of trading liability, we decline to interfere with the order of the ld. CIT(A). Appeal of the Revenue is dismissed.
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