TMI Blog2020 (10) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... account of balance appearing in the name of concerned two creditors was made by him u/s. 68 of the Act by treating the same as unexplained cash credit because of the failure of assessee to establish mainly the genuineness of said creditors. This position clearly apparent from record, we are of the view that recourse at this stage cannot be made to sub-section (1) of section 41 to confirm the addition made by the AO u/s. 68 as sought by the ld. DR. Uphold the impugned order of CIT(A) restricting the addition made by the AO u/s. 68 thereby giving a which represented the opening balance and pertained to transactions of earlier year. - Appeal of Revenue dismissed. - ITA No.1354/PUN/2017 - - - Dated:- 28-8-2020 - Shri P.M. Jagtap, Vice P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard, he required the assessee to furnish ledger account extracts and confirmations from certain sundry creditors. Although the assessee furnished ledger account extracts of the creditors, he failed to file their confirmations. The AO, therefore, issued summons u/s. 131 of the Act calling for the relevant details from the said creditors relating to the assessee as appearing in their books of account. Although some of the creditors complied with the requirements of AO, there was no response from other creditors. In the case of some creditors, even the summons issued by the AO through postal authority were returned back unserved . The AO, therefore, deputed the Inspector of Income Tax to make necessary enquiries in case of such creditors. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation represented opening balance while out of the total credit balance of ₹ 2,82,35,355/-, a sum of ₹ 2,49,84,315/- represented opening balance which had been carried forward from the earlier year. Since, these opening balances pertained to the transactions entered into by the assessee in the earlier years, the ld. CIT(A) held that the same could not be added u/s. 68 of the Act in the year under consideration as unexplained cash credits. He accordingly, deleted the addition made by the AO u/s. 68 of the Act to the extent of ₹ 3,47,65,734/- and restricted the addition of ₹ 3,80,16,774/- made by the AO to ₹ 32,51,040/-. He also directed the AO to consider the credits to that extent pertaining to earlier year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration u/s. 68 of the Act. He, however, has contended that the addition made by the AO on account of credit balance appearing in the accounts of concerned two creditors having been found to be bogus can be confirmed alternatively by recourse to sub-section (1) of section 41 of the Act. We are unable to accept the contention of ld. DR. It is well settled that the provisions of section 41(1) can be invoked only when trading liability incurred by the assessee is subsequently found to have seized to exist in the relevant year and the onus in this regard is on the AO to establish on evidence that there was indeed remission or cessation of such liability. In the present case, this onus was not discharged by the AO and addition on account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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