TMI Blog2022 (9) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... and Assessee had filed details of purchases vis-a-vis sales, which figures of sales and purchase were not doubted by the AO - HELD THAT:- The entire basis of the AO for doubting the balance was the order of the Commissioner, Central Excise Customs, Meerut-II, and since the very said order has been set aside by the CESTAT and has become final, there can be no doubt that the finding of the AO that the purchases were bogus has no legs to stand on. The finding of the CIT(A) and ITAT that the said liability which was converted into an unsecured loan and subsequently stood repaid has not been challenged by the Revenue in the present appeal. In the facts of the present case as well as SHRI VARDHMAN OVERSEAS LTD. [ 2011 (12) TMI 77 - DELHI HIG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 6,44,29,650/- made by the Assessing Officer ( AO ) under Section 41(1) of the Income Tax Act, 1961 ( the Act ). He states that the AO had made the said addition after relying upon the order dated 29th July, 2010 passed by Commissioner, Central Excise Customs, Meerut-II wherein the said Commissioner had held that purchases made by the Assessee's firm from a sister concern M/s Ruchi Infotek Systems, were non-genuine, bogus and there was no real production or movement of goods. The AO, further, took note that the said trade credit liability of M/s Ruchi Infotek Systems appearing in the books of the Assessee's firm had been converted into a loan liability and was now shown as an unsecured loan from Mr. Suresh Chand Aro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the amount payable by the Assessee s firm to M/s Ruchi Infotek Systems was converted as a loan and this loan was admittedly repaid in the subsequent Financial Years (FYs) in the following manner:- Financial Years (FYs) Amounts (Rs.) 2013-14 3,00,000/- 2014-15 15,00,000/- 2015-16 5,91,00,000/- Balance Amount in June 2016 35,29,650/- The CIT(A) noted that in this manner the amount payable to M/s Ruchi Infotek Systems was reduced to nil. 4. The CIT(A) also noted that proprietary business carried on in the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the details of purchase vis- -vis sales produced by the assessee which were not doubted by the learned Assessing Officer, establish the case of the assessee. This finding of fact of the Ld. CIT(A) is not disputed by the Revenue. It, therefore, goes to establish that such liability as was existing as on 31/3/2013 and was repaid subsequently between 1/4/2013 and 31/3/2017, and such fact is well evidenced by the books of accounts. The ITAT held that the provisions of Section 41(1) of the Act are not applicable to the facts of the case and in this regard relied upon the judgment of this Court in CIT Vs Shri Vardhman Overseas reported in [2012] 343 ITR 408 (Del). 6. Learned Senior Standing Counsel for the appellant has contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the Commissioner, Central Excise Customs, Meerut-II, and since the very said order has been set aside by the CESTAT and has become final, there can be no doubt that the finding of the AO that the purchases were bogus has no legs to stand on. The finding of the CIT(A) and ITAT that the said liability which was converted into an unsecured loan and subsequently stood repaid has not been challenged by the Revenue in the present appeal. Further, the reliance placed by the ITAT on the judgment of this Court in Shri Vardhman Overseas (supra) is also apposite wherein the Court held as follows:- 20...If and when there is evidence in a particular later year to show that the liability has ceased or has been remitted, the same can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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