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2015 (10) TMI 1479 - ITAT AHMEDABAD

2015 (10) TMI 1479 - ITAT AHMEDABAD - TMI - Addition made u/s.41(1) - cessation of liability - Held that:- Revenue has not brought any material on record to show that the assessee was allowed deduction in respect of liability in question, and if it was allowed then in which year. Further, it is observed that the Revenue has admitted that the amount in question was shown as liability by the assessee in its balance sheet of the year under consideration. We find that no material has been brought on .....

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l as in the absence of material to indicate deriving of any benefit in cash or otherwise by the assessee section 41 is not applicable. In the above facts of the case, in our considered view, the addition made by invoking the provision of section 41(1) of the Act is not sustainable. We, therefore, delete the addition - Decided in favour of assessee.

Addition made u/s.68 - Held that:- We find that the identities of the share applicants are not in doubt. The Revenue has brought no materi .....

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umstances, it shall be in the interest of justice to restore the issue back to the file of the AO for adjudication afresh after proper verification. The assessee is also directed to cooperate with the AO and file all the materials, which it wishes to rely upon before the AO, as and when called upon by the AO.- Decided in favour of assessee for statistical purpose. - ITA No. 512/Ahd/2010 - Dated:- 13-3-2015 - Shailendra Kumar Yadav, JM And N. S. Saini, AM,JJ. For the Appellant : Shri M K Patel Fo .....

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change. In reply to the show cause notice, the assessee submitted that the assessee-company was facing a huge financial crisis, as it had incurred huge loss for past several years, and therefore, the assessee was unable to pay the amount. It was also submitted that there was no cessation of liability and there was no remission granted to the assessee and the company intended to honour the liability. However, the AO held that there was cessation of liability and made addition of ₹ 40,000/- .....

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future also and confirmed the addition made by the AO. 5. The AR of the assessee submitted that there was no cession of liability and the amount must have been paid by this time by the assessee, but the evidence of the same are not readily available with him, and therefore, requested that the matter should be restored back to the file of AO for verification of the same. 6. On the other hand, DR supported the orders of the lower authorities. 7. We have heard rival submissions and perused the mat .....

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ound that the assessee did not have the intention to pay liability. 9. We find that the Revenue has not brought any material on record to show that the assessee was allowed deduction in respect of liability in question, and if it was allowed then in which year. Further, it is observed that the Revenue has admitted that the amount in question was shown as liability by the assessee in its balance sheet of the year under consideration. We find that no material has been brought on record to show tha .....

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l to indicate deriving of any benefit in cash or otherwise by the assessee section 41 is not applicable. In the above facts of the case, in our considered view, the addition made by invoking the provision of section 41(1) of the Act is not sustainable. We, therefore, delete the addition of ₹ 40,000/- and allow this ground of appeal of the assessee. 11. The second issue is involved in this appeal is that the CIT(A) erred in confirming the addition made u/s.68 of the Act of ₹ 10,20,000 .....

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ion 68 of the Act. 13. Before the CIT(A), the assessee submitted that the PAN was available in respect of share applicants for ₹ 6,75,000/-, and therefore, atleast this much should be allowed. 14. The CIT(A) after considering submissions observed that all the shareholders who had made application for shares in cash for the aggregate amount of ₹ 10,20,000/- were relatives of the Managing Director. In every case, the payment has been made in cash. In the case of the share applicants, n .....

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not been discharged. He, therefore, confirmed the addition of ₹ 10,20,000/-. 15. Before us, the AR of the assessee submitted that share application money of ₹ 10,20,000/- was received from ten persons. Name, address and confirmation of all ten persons were filed before the AO as well as before the CIT(A). The lower authorities, merely on the basis of surmises and conjectures and doubt, rejected the explanation of the assessee, and have brought no material to show that the receipt of .....

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