TMI Blog2017 (5) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... offered the said amount for taxation in the assessment year 2015-16. The contentions of the assessee about genuineness/bonafide of purchases as well that these two accounts stood adjusted/written back and the income was offered to tax in assessment year 2015-16 , for which necessary verification needs to be done by the authorities below as to said claims of the assessee. Thus, we are inclined to restore this matter to the file of the A.O. for verification of the afore-said contentions of the assesse and de novo determination of the issues on merits in accordance with law after considering the submissions/explanations of the assessee in the light of evidences filed by the assessee. The assessee is directed to produce all necessary and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icals ₹ 1,26,641) outstanding for last four years, to the total income as cessation of liability u/s 41(1)(a). 2.2 While doing so, the ld. CIT(A) failed to appreciate that - (a) the Appellant has not obtained, whether in cash or in any other manner whatsoever, any amount in respect of sundry creditors outstanding. (b) merely because the liability to some creditors is outstanding for more than four years and the liability is shown in the accounts of the Appellant, the amount cannot be assessable as income under section 41 (1) of the IT Act. (c) the Appellant had not unilaterally written back the accounts of the sundry creditors in its profit loss account for the year. (d) the liability was shown in the balance sheet as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Ajanta Enterprises 75,762 75,762 75,762 75,762 2 Calyx Chemical and Pharmaceutical 1,26,641 1,26,641 1,26,641 1,26,641 No explanation was submitted by the assessee w.r.t. above creditors outstanding in its books of accounts for last four years, hence, the A.O., interalia, brought to tax the above amount of ₹ 2,02,403/- and , inter- alia, added the aforesaid sum to the total income of the assessee u/s 41(1)(a) of the Act as cessation of the liability, as the aforesaid amount was outstanding for a very long time in assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able by the assessee which cannot be treated as cessation of liability of the assessee chargeable to tax u/s 41(1)(a) of 1961 Act. It is also submitted by learned counsel for the assessee that the assessee has written back/adjusted the said amount and offered the same for taxation in the assessment year 2015-16 which can be verified by authorities below, which were existing as outstanding to be payable in its books of account as at 31-03-2015. The assessee placed before us as an additional evidences vide copy of the computation of income for assessment year 2015-16 along with balance sheet as at 31-03-2015 , P L account for financial year 2014-15 and ledger account of the said two parties for the financial year 2014-15. The learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there were no cessation of liability. The assessee has also claimed before us that the assessee had already offered the said amount for taxation in the assessment year 2015-16. The contentions of the assessee about genuineness/bonafide of purchases as well that these two accounts stood adjusted/written back and the income was offered to tax in assessment year 2015-16 , for which necessary verification needs to be done by the authorities below as to said claims of the assessee. Thus, we are inclined to restore this matter to the file of the A.O. for verification of the afore-said contentions of the assesse and de novo determination of the issues on merits in accordance with law after considering the submissions/explanations of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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