TMI Blog2013 (4) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors even for more than three years cannot be considered as sufficient evidence of cessation of liability - Assessee has not written back the amount payable to these creditors in the books of account We do not find infirmity in the order of ld CIT(A) directing the AO to delete the amount which is outstanding even for more than three years - We accordingly uphold the order of ld CIT(A) and reject grounds of appeal taken by department - Appeal is dismissed in favour of Assessee. - ITA No.849/Mum/2012 - - - Dated:- 13-2-2013 - Shri B. R. Mittal And Shri N. K. Billaiya,JJ. For the Appellant : Shri Rajarshi Dwivedy For the Respondent : Shri Narayan Atal ORDER Per B. R. Mittal, JM:- The department has filed this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is no transaction with those creditors and liability genuinely exists. AO did not find anything on record to substantiate as to why the creditors over three years are not pursuing their demand. It was also noticed by the AO that out of 33 creditors, only 3 creditors i.e. Shreejay Enterprises, Star Hardware Stores Shree Laboo, whose credits stand at Rs.89,872 are in the receipt of subsequent payment. He, accordingly invoked the provisions of section 41(1)(a) of the Act and treated the sundry creditors of Rs.27,45,191 (Rs.28,35,063 - Rs.89,872) as cessation of trading liability in the hands of the assessee and deemed the liabilities of the creditors as the profits and gains of business or profession chargeable to tax during the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years. He further submitted that assessee has not written off the said liability and, therefore, provisions of section 41(1) are not applicable as held by ld CIT(A). 5. We have considered submissions of ld representatives of parties and order of ld CIT(A). We observe that ld CIT(A) in the impugned order has stated that the AO has not established that the liability in respect of those creditors had ceased to exist within the meaning of section 41(1) of the Act. It was submitted by the assessee before the authorities below that assessee's business was discontinued due to loss and, therefore, the loan taken from State Bank of India was outstanding for over five years. The sundry creditors were outstanding on account of non-availability of su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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