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2015 (7) TMI 830 - ITAT DELHI

2015 (7) TMI 830 - ITAT DELHI - TMI - Addition on written back liability - addition of ₹ 6,94,272/- outstanding in the books in the name of Shri Amir Mohammad (wrongly written as Amit Chand in this year) - assessee submitted that there was a typographical mistake in the books of account of the assessee, wherein wrong name was written as Shri Amir Chand whereas the correct name was Shri Amir Mohd which was correctly shown in the details of books of accounts filed before the AO - Held that:- .....

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of liability twice and the present case is squarely covered in favour of the assessee by this order. We may also point out that when the assessee has offered impugned liability to tax in AY 2013- 14 and tax has been paid thereon then the similar addition cannot be upheld for AY 2007-08 an addition made by the AO and upheld by the CIT(A) cannot be held as sustainable and thus, in accordance with law and we direct the AO to delete the same. Decided in favour of assessee. - ITA No.2022/Del /2013 - .....

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tion of ₹ 6,94,272/- outstanding in the books in the name of Shri Amir Mohammad (wrongly written as Amit Chand in this year). Ld. CIT(A) s observation that appellant has written back liability in the name of Shri Amir Mohammad and created new liability in the name of Shri Amit Chand is a fig of imagination without any basis and without any evidence. 3. Briefly stated the facts giving rise to this appeal are that the assessee filed his return for AY 2007-08 on 31.07.2007, declaring an incom .....

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assessee is before this Tribunal with the sole issue/ground as reproduced hereinabove. 5. We have heard arguments on both the sides and carefully perused the relevant material placed on record. The Ld. counsel of the assessee submitted that there was a typographical mistake in the books of account of the assessee, wherein wrong name was written as Shri Amir Chand whereas the correct name was Shri Amir Mohd which was correctly shown in the details of books of accounts filed before the AO. The Ld. .....

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as shown outstanding in books of accounts of the assessee. 6. Ld. counsel vehemently contended that the Assessing Officer and the CIT(A) were not correct in holding that the said liability was ceased during the year under consideration because it cannot be done unilaterally and unless the assessee is completely satisfied that the due amount will not be claimed by the relevant creditor Shri Amir Mohd or any other person then there was no question of presuming that the liability has ceased. Ld. co .....

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to tax by the assessee in AY 2013-14 and tax has been paid thereon therefore, the addition made by the AO and upheld by the CIT(A) is not sustainable for AY 2007-08 in accordance with provisions of the Act. The Ld. counsel pointed out that the assessee s paper book pages 6 to 12 wherein at page 8 in the computation of income impugned amount has been offered to tax as income from other sources. 7. Ld. counsel also submitted a copy of the decision of the ITAT Delhi G Bench in the case of Shri Sun .....

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the balance sheets as on 31.03.2004, 31.03.2005, 31.03.2006 and 31.03.2007. The Ld. DR has also not disputed this fact that in the similar years this liability of ₹ 6,94,272/- was shown in the name of Shri Amir Mohd, therefore, this contention of the assessee is found to be acceptable that the name of Shri Amir Chand in the balance sheet as on 31.03.2007 was mentioned by mistake and this liability is actually related to creditor Shri Amir Mohd. The Ld. DR has also not disputed this fact th .....

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t the time of hearing before us, it is stated by the learned counsel that the Assessing Officer made the addition of 7,94,592/- in respect of the liability shown by the assessee in the name of Shri Banarsi Lal S/o Shri Laxman Das in its balance sheet. He submitted that the liability is with regard to goods purchased by the assessee from this party in the earlier years and the credit was outstanding in the balance sheet of 31st March, 2007. He submitted that the assessee has not denied the liabil .....

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g back of the liability is to be treated as income of the previous year ended on 31st March, 2013. He also stated that the assessee has credited the above liability to the profit & loss account and will include in its income in the return which is likely to be filed shortly. 4. Learned DR, on the other hand, stated that the assessee has not furnished any evidence, correspondence or detail which may justify that the liability was existing as on 31st March, 2007 and has ceased only during the .....

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assessee is only trying to postpone the payment of tax on such liability. She, therefore, submitted that the order of learned CIT(A) should be sustained. 5. We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the arguments of both the sides and the facts of the case, it is evident that now the controversy is very narrow because it is the stand of both the parties that the liability has ceased. The only dispute is with regard t .....

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e assessee (hereinafter referred to as the first-mentioned person) and subsequently during any previous year,- (a) the first-mentioned person has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and acc .....

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sation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year. [Explanation 1.-For the purposes of this sub-section, the expression "loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remissi .....

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siness or profession, the other person; (iii) where a firm carrying on a business or profession is succeeded by another firm, the other firm;] [(iv) where there has been a demerger, the resulting company.]. 6. From the above, it is evident that main Section i.e. 41(1) would be applicable where the assessee has obtained some benefit in respect of any trading liability by way of remission or cessation thereof. It is a settled legal position that merely because a liability has become time barred or .....

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