9911796707
TMI Blog2013 (11) TMI 1674X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee is the proprietor of M/s. Shri Rajaram Dhanvarsha Exports, in which, she has carried out the business of wholesale of cotton grey fabrics. During the year under consideration, the assessee shown sales of Rs. 2,76,12,707/- from which she has shown net profit of Rs. 2,72,427/- @ 0.99%. The assessee filed return of income for the assessment year under consideration declaring a total income at Rs. 1,72,250/-. The said return was processed under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the "Act") and was selected for random scrutiny by issuing notice under Section 143(2) of the Act. A notice under Section 142(1) of the Act issued on 2.2.2011. Further notices under Section 142(1) of the Act were issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent years. The assessee was also required to furnish addresses of such creditors. On the basis of the address supplied by the assessee, notice under Section 133(6) of the Income Tax Act were issued to 11 creditors calling upon for ledger account confirmations. With respect to 14 creditors referred to para 5.7 of Assessment Order, it was found that an amount of Rs. 51,37,327/- were outstanding for three years. Therefore, while passing the assessment order, the Assessment Officer made two additions i.e. additions of Rs. 64,47,623/- under Section 41(1) of the Act by observing that the said liability of Rs. 64,47,623/-as reflected in the balance-sheet for the AY 2009-10 and in fact ceased to exist and the assessee had obtained a benefit in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 of 2012 and learned ITAT has allowed the said appeal deleting the addition of Rs. 51,37,327/-, which is subject matter of Tax Appeal No. 943 of 2013 (with which we are not concerned in the present appeal). 2.4 Feeling aggrieved and dissatisfied with the judgment and order passed by the learned Tribunal in deleting the addition of Rs. 51,37,327/- under Section 41(1) of the Act, the revenue has preferred the present appeal. 3. Heard Shri Varun Patel, learned advocate for the appellant- revenue and perused the impugned judgment and order passed by the learned ITAT as well as order passed by the learned CIT(A) as well as assessment order. At the outset, it is required to be noted that AO made addition of Rs. 51,37,327/- with respect to cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had continued to show the admitted amounts as liabilities in the balance sheet, the same could not be treated as cessation of liabilities. Merely because, the liabilities were outstanding for last many years, it could not be inferred that the said liabilities has ceased to exist. The Tribunal had rightly observed that the Assessing Officer would have to prove that the assessee had obtained the benefits in respect of such trading liabilities by way of remission or cessation thereof. Merely because, the assessee obtained benefit of reduction in the earlier years and balance was carried forward in the subsequent year, it would not prove that the trading liabilities of the assessee had become non existent." 5. Applying aforesaid ratio l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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