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2022 (5) TMI 665 - AT - Income TaxAddition u/s 41(1) - creditors treated as ceased/waived liability - recalling of appeal - AO during assessment proceeding observed certain trade liabilities (trade creditors) outstanding for more than five years but on verification, those parties denied any outstanding due from the assessee - MA to limited extent of examining the application of decision in “Elde Electricals Agencies Private Limited” and “Lotus India Ltd” to the present case.HELD THAT:- Tribunal in case of Lotus Investment Ltd. [2019 (3) TMI 467 - ITAT MUMBAI] has deleted the addition under section 41(1) of the Act mainly on the ground that genuineness of the transaction was to be examined in the year of incurring expenditure and not in the year of cessation of liability. The Assessing Officer also not examined whether assessee had obtained a benefit either in cash or in any in any form in respect of such liability in relevant previous year. The facts in the instant case before us are different. In the instant case, the Assessing Officer issued summons to the alleged trade creditors and recorded their statements, wherein they have denied of any payment due to the assessee. Facts of the case being distinguishable, the ratio of decision relied upon by the assessee, cannot be imported to the facts of the case. We find that in above case of Elde Electricals [2015 (7) TMI 16 - BOMBAY HIGH COURT] also there is no finding of denying of existence of liability in the year under consideration by the alleged trade creditors. Therefore, the decision relied upon by the assessee is distinguishable on facts. We have considered finding of the Tribunal in the light of both the decisions cited by the assessee, however in our opinion the ratio(s) of the decisions are not applicable in the facts of the instant case. - The appeal recalled to the extent of examining the two decisions, is accordingly dismissed. - Additions confirmed
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