TMI Blog2022 (9) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered to income in the subsequent year demonstrates that there was an existing liability of Rs. 8,97,893/- against the assessee as that the end of the financial year under consideration. Therefore, in our considered view, in the instant facts, CIT(Appeals) erred in facts and law in confirming the addition on the ground that the assessee has not been able to prove that the liability was actually subsisting at the end of the financial year. Appeal of the assessee is allowed. - ITA No. 142/Rjt/2014 - - - Dated:- 29-8-2022 - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Assessee by: Shri D.M. Rindani, A.R. Revenue by: Shri Aarsi Prasad, CIT-D.R. ORDER PER BENCH:- This is an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore him, that the impugned liabilities actually subsisted in the year under appeal, he will apply the judgment of Hon'ble High Court cited supra and decide the issue in favour of the assessee. In case he comes to the conclusion that the impugned liabilities did not subsist in the year under appeal or were fictitious, he, in that case, will dispose off the matter according to law including section 28 of the I. T. Act after giving reasonable opportunity of hearing to both the parties. 4. Before the Ld. CIT(Appeals) in remand proceedings, the assessee submitted that in respect of balance of Rs. 10, 21, 420/-, the liability was existing and company has to pay the same, but due to financial crisis and acute liquidity problems faced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 was of Rs. 8,97,893/-. However, out of the above outstanding balance of Rs. 8,97,893/-, the assessee repaid an amount of Rs. 6,21,182/- back to the creditors in the subsequent years and an amount of Rs. 2,76,726/- was written off in the subsequent period when it was crystallised as the sum was not payable. Accordingly, this amount of Rs. 2,76,726/- was reflected in the profit and loss account, as income of the assessee, of the concerned financial year when the same was written off by the assessee in its books of accounts. Accordingly, the ld. CIT(A) erred in facts and in law in confirming addition of Rs. 10,21,420/- by invoking provisions of section 41(1) of the Act. In response, Ld. D.R. relied upon the observations made by the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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