TMI Blog2021 (9) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... er of income as envisaged in section 41(1) of the I.T. Act. In this context, we rely on the judgment in the case of CIT v. Shri Vardhman Overseas Ltd. [ 2011 (12) TMI 77 - DELHI HIGH COURT] wherein it was held that the liability appearing in the Balance Sheet tantamount to acknowledgement of debt. Therefore, it was held by the Hon'ble High Court that the liability has neither ceased to exist nor there is a remission of liability in terms of section 41(1) of the I.T. Act. In view of the judgment of the Hon'ble High Court of Delhi (supra) and aforesaid reasoning, we uphold the order of the CIT(A). - Decided against revenue. - ITA No. 1223/Bang/2017 - - - Dated:- 2-9-2021 - Chandra Poojari, Member (A) And George George K., Membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added under Section 41(1) of the Act. 4. In the above circumstances, we recall the impugned order of the Tribunal in the case on hand in ITA No. 1223/Bang/2017 dt. 31.1.2018 for Assessment Year 2012-13 for the limited extent of adjudication of grounds 4 5 (supra) raised before the Tribunal as they were not adjudicated therein. 5. The Registry is directed to refix the hearing of the case, in due course, by issue of notice to both parties. 6. In the result, Revenue's Miscellaneous Petition for Assessment Year 2012-13 is allowed as indicated above. 2. Brief facts of the case are as follow: An amount of ₹ 6,03,90,079 was disallowed u/s. 41(1) of the I.T. Act and added to the total income by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred an appeal to the first appellate authority. Before the first appellate authority it was contended that the assessee had received this advance prior to 2003 against sales/services rendered by the assessee. It was submitted that major portions have been received from the Government Departments. It was stated that these advances were outstanding due to non-adjustment of receivables on account of closure of assessee-company and the same has been adjusted to receivables after reconciliation during the subsequent assessment years. It was stated that the advances received against sales amount is `Nil' as per Balance Sheet as on 31.03.2016. The assessee also filed details with regard to how the advances were adjusted against the receiva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). The Appellant contends that, this being the actual status, the disallowance made by the learned Assessing Office is not justifiable. It clearly emanates from the above details that the impugned amounts, under question were live credits, in respect of which the liabilities remained intact. In these facts and circumstances, the impugned liabilities cannot be construed to have extinguished, and much less, to have assumed the character of income as envisaged u/s. 41(1) of the I.T. Act. The Assessee has placed reliance on the judgments of Delhi High Court in the case of CIT Vs. Shri. Vardhman Overseas Ltd 343 ITR 408, in which it is held that, liabilities appearing in the B/S are tantamount to acknowledgement of debt, which neither ceased to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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