TMI Blog2013 (9) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act on 2.12.2009. The survey was conducted in a group of concerns, which apart from the assessee, consisted of his father Shri T.P. Kathirvel (Indvl.), Shri T.P. Kathirvel (HUF), and Shri K. Gokul, assessee s brother. During the course of survey, assessee s father in a statement recorded from him mentioned that for the total sundry creditors of balance ₹ 1,96,69,348/- appearing in the books of the four assessees, name and address could not be furnished. According to him, such amount was to be offered as undisclosed income for assessment year 2009-10 as unproved sundry creditors. The amount of such sundry creditors in the books of the assessee was ₹ 43,29,009/-. However, when return of income was filed, no such income was ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(Appeals) was not impressed. He was of the opinion that assessee had himself admitted the credit balance to be not existing. According to him, there was no liability towards any such persons. Assessee could not prove the creditors though he had given the names. According to ld. CIT(Appeals), there was a cessation of liability for the sum of ₹ 43,29,009/-. He, therefore, confirmed the addition. 5. Now before us, Adv. S. Sridhar, appearing for the assessee, strongly assailing the order of authorities below, submitted that the addition itself was based on a surrender of income made during the survey. According to him, by virtue of the decision of Hon'ble jurisdictional High Court in the case of CIT v. S. Kader Khan (300 ITR 157) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were repaid, the liability no more existed. When the liability no more exited and assessee was unable to give explanation with regard to source from which the liability was squared off, as per learned D.R., addition was rightly done. The creditors itself were bogus. Relying on the decision of Bangalore Bench of this Tribunal in the case of Suresh Kumar T. Jain v. ITO (128 ITD 74), learned D.R. submitted that when brought forward trade creditors were not genuine and assessee never reconciled the difference, an addition under Section 41(1) could be done. 7. In reply, learned A.R. submitted that if the Revenue was relying on the statement recorded from assessee, then it could not ignore part of the affidavit which clearly mentioned that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 41(1) of the Act treating as cessation of the liability. No doubt, as pointed out by the learned A.R., a surrender of income admitted in the statement recorded during the survey under Section 133A, may not have much evidentiary there. Leaving this aspect apart, without doubt, even during the course of assessment proceedings, assessee had time and again mentioned that the creditors balance, which were appearing in his books, were not actually there. Though the assessee stated that such amounts were paid about eight years back, no evidence in this regard was filed. Therefore, if the Assessing Officer presumed that the amounts would have been squared off only during the previous year relevant to impugned assessment year, we cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or (b) the successor in business has obtained, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first-mention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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