TMI Blog2018 (3) TMI 1357X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit in respect of the trade liability had been taken by the assessee. Out of total amount of ₹ 1 crore and odd, approximately 86 lacs had still remained unrecoverable as the creditors were untraceable. This is the finding recorded. In any event, it could not be said that the liability had ceased or that any advantage had been taken by the assessee on account of this. No addition could be made - Decided against the revenue. - Income Tax Appeal No. 224 of 2012 - - - Dated:- 9-3-2018 - Hon'ble Bharati Sapru And Hon'ble Harsh Kumar, JJ. For the Appellant : S.S.C. I.T.,Krishna Agarwal,Shubham Agrawal For the Respondent : Suyash Agarwal,R.R. Agarwal ORDER Heard Shri Shubham Agrawal, learned counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven as under- (iv) CIT vs. Coates of India Ltd. (Cal) 232 ITR 324 (v) Industrial Cables (I) Ltd. ACIT (ITAT) (CH) 97 ITR 267 (vi) CIT Financial Retail Services India Ltd. Vs. ACIT 2008-TIOL-05-ITAT MAD. Insofar as the question nos.2 and 3 are concerned the Tribunal has made an observation in its judgment with regard to the deletion of an addition of ₹ 1,,63,53,539/- made by the Assessing Officer on account of sundry creditors. The grievance of the Assessing Officer was that the assessee had not filed any evidence before the Assessing Officer with regard to the actual existence of these liabilities or to show that the liabilities existed. The question sought to be answered is whether the provision of Section 41(1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous year. Explanation 1 - For the purposes of this subsection, the expression loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof shall include the remission or cessation of any liability by a unilateral act by the first mentioned person under clause (a) or the successor in business under clause (b) of that sub-section by way of writing off such liability in his accounts. Explanation 2 - For the purposes of this subsection, successor in business means ? i. where there has been an amalgamation of a company with another company, the amalgamated company; ii. where the first-mentioned person is succeeded by any other person in that business or profes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by assessee to the creditor and, therefore, Section 41(1) of the Act could not have been invoked. The findings of fact being similar in the present case, the question nos.2 and 3 are answered in favour of the assessee and against the department. Insofar as the question no.4 is concerned, the law is well settled by the Apex Court in the case of T.R.F. Ltd. Vs. Commissioner of Income Tax reported in 323 ITR 397 (SC). The relevant para 4 is quoted hereunder: The position in law is well-settled. After 01.04.1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. However, in the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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