TMI Blog2017 (12) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... us that the first appellate authority has considered additional evidences in violation of rule 46A, however, after perusing the record we have found that the so called additional evidences are nothing but details of payment made to sundry creditors subsequent to the relevant financial year and part of such evidence was also produced before the Assessing Officer during the assessment proceedings. That being the case, we do not accept the contention of the learned Departmental Representative that the first appellate authority has committed any grave error which could invalidate the order passed by him. - Decided against revenue - ITA No.3149/Mum/2016 - - - Dated:- 20-12-2017 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h has remained outstanding for more than three years should not be treated as assessee s income under section 41(1) of the Act on account of cessation of liability. Though, the assessee objected to the proposed action of the Assessing Officer and furnished certain factual details to indicate that all the creditors are still existing which could be found from the payments made to them subsequent to the Balance Sheet date, however, the Assessing Officer was not convinced with the explanation of the assessee. The Assessing Officer observed, since 56.22% out of the total sundry creditors have remained outstanding for more than three years, it has to be presumed that the sundry creditors are no more outstanding and to that extent there is remiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RPAD. Therefore, we proceed to dispose off the appeal ex parte qua the assessee after hearing the learned Departmental Representative and on the basis of material on record. 6. Heard the learned Departmental Representative and perused the material on record. It is evident, merely on the reasoning that liability in respect of some of the sundry creditors have remained outstanding for about three years the assessing officer has concluded that they have to be treated as income of the assessee in the impugned assessment year as they have ceased to exist as per section 41(1) of the Act. However, as could be seen from the facts on record, in course of assessment proceedings, the assessee not only furnished the names and addresses of the sundr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned parties. As far as accrual of any benefit either by way of cash or some other manner to the assessee in respect of such liability, there is nothing on record to show that either the creditors have written off the liabilities in their books of account or the assessee has refused to pay the amount to them. Therefore, it cannot be said that any benefit on account of the liability has accrued to the assessee. The third condition which is very much crucial is, whether the liability has ceased to exist in the impugned assessment year. As per Assessing Officer s own admission, the sundry creditors have remained outstanding for more than three years. Therefore, what prompted the Assessing Officer to conclude that the liability has ceased to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Without making any such enquiry, the Assessing Officer cannot presume cessation of liability. More so, when the evidence brought on record indicate that the assessee has continued payment to the concerned parties subsequently to discharge the liability. Though, the learned Departmental Representative has submitted before us that the first appellate authority has considered additional evidences in violation of rule 46A, however, after perusing the record we have found that the so called additional evidences are nothing but details of payment made to sundry creditors subsequent to the relevant financial year and part of such evidence was also produced before the Assessing Officer during the assessment proceedings. That being the case, we do n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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