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2021 (9) TMI 960 - ITAT AMRITSARAddition of sundry creditors u/s 41(1) - cessation of liability - disputed sundry creditors were being outstanding for more than 3 years and in compliance to notice under section 133(6) it was replied by them that they had no outstanding balance with the assessee - HELD THAT:- It is an admitted fact as evident from the impugned order that the ld. CIT(A) has endorsed the finding of the ld. AO in the matter of cessation of liability relying on the unilateral decision without rebuttal to the assessee and ascertain the fact that whether in the year under consideration i.e. the asstt. year 2013-14 any gains has accrued or arisen to the assessee in the given facts and circumstances of the case by way of remission or cessation as the said amounts were squared up / written off in earlier assessment years by the creditors. Any addition under section 41(1) of the Act, if at all can be made only in the year in which the remission or cessation of liability has taken place. The Assessing Officer has not rebutted the evidence that relied upon regarding cessation of liability of creditors collected u/s 133(6) of the act. Reply filed by the assessee has not been considered and disposed of by speaking order before jumping on the decision to confirm the finding of the AO regarding addition on account of on account of sundry creditors u/s 41(1) and u/s 40A(3) of the Act. We, therefore, held that it is a fit case to be restored back to the Ld. CIT(A) to decide afresh on both the issues by way of speaking order - Appeal of the assessee is allowed for statistical purposes.
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