TMI Blog2015 (8) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... for the last more than 10 years, no income tax returns had been filed by them, only then he concluded that the liability of the assessee, in fact, had ceased to exist. In our view, merely because the assessee now has offered the said amount as income, that itself, does not support the case of the assessee that the liability had not ceased to exist in the year under consideration, rather, this fact supports, the case of the Revenue that even after passing of further 5 years from the date of assessment, the assessee could not trace his creditors. We, therefore, do not find any infirmity in the well-reasoned order of the Ld. CIT(A) in this respect. There being no merit in the appeal of the assessee, the same is accordingly dismissed - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that the liability to two creditors for purchases ceased to exist and hence the said amount is liable to tax u/s. 41(1). 5. The action of the learned CIT (A) is contrary to the express provisions of Sec. 41(1) as the appellant has not credited the impugned amount to its Profit and Loss Account nor in any way treated the same as its income. The impugned amount, in fact, continues to be its liability and shown as such in its Balance Sheet. 6. The learned CIT (A) erred in coming to the conclusion that the liability has ceased for reasons, which are legally not tenable: The Appellant prays that the order of the learned CIT (A) upholding the addition made by the Assessing Officer and enhancing the same be quashed. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Deepali exports ₹ 44,82,512/- M/s Vijaybhav Rs.50,11,645/ ₹ 94,94,157/- 5.1 It was further contended by the assessee that these balances had been brought forward in books and that there is no write off or unilateral transfer of the credit balances to the P L a/c and no benefit had been obtained by the assessee in any manner whatsoever. Hence there was no cessation of liability. There was no waiver by the creditor also in favour of the assessee and these liabilities were payable as and when to be demanded by the creditor. The Ld. CIT(A) however required the assessee to produce the copy of ledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have shifted. The residential addresses of both persons as per the PAN data base is same i.e. 407 Vishaldeep, Khadilkar Road, Kandawadi Girgaon Mumbai-400004 but these persons had not been found ever residing there also. From spot enquiries it was further gathered that some police enquiries were being conducted against these two persons some 10 years back in relation to some fraud/crime and since then they had never been seen at those addresses. The Ld. CIT(A) further noticed that though the letter head of the bill mentioned the above parties as diamond manufacturers and exporters and diamond being such a costly item, the turnover should have been running in crores of rupees, but on enquiries conducted from the AO having jurisdiction over t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,94,157/- to the total income of the assessee. 7. Aggrieved by the order of the Ld. CIT(A), the assessee has come in appeal before us. The Ld. AR of the assessee has reiterated his contentions as were made before the Ld. CIT(A). He has further submitted that there had been a dispute of the assessee with the above stated two parties regarding the quality of the diamonds supplied by them, hence, their payment was withheld by the assessee. Now the dispute has been resolved and the assessee has offered the said amount as income for taxation during the A.Y.2014-15. The Ld. D.R. on the other hand, has contended that the liability was pertaining to the year 2001-02. The assessment/addition was made by the AO in the year 2009. Now after so many ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her, this fact supports, the case of the Revenue that even after passing of further 5 years from the date of assessment, the assessee could not trace his creditors. We, therefore, do not find any infirmity in the well-reasoned order of the Ld. CIT(A) in this respect. There being no merit in the appeal of the assessee, the same is accordingly dismissed. The assessee, however, if so advised, will be at liberty to claim the refund/adjustment of the taxes paid subsequently, in relation to the additions made/confirmed during the year under consideration to avoid double taxation, in accordance with the provisions of the law. 9. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 20.02.2015. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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