TMI Blog2023 (6) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... as not received in the current year and unsecured loans/sundry creditors were converted in the share capital . Thus, it is abundantly clear that the transfer to share capital account was only by means of transfer entries, which, obviously, cannot lead to addition u/s.68 - Decided in favour of assessee. Addition u/s 41(1) - HELD THAT:- This section gets triggered on cession of trading liability. If the amount is still payable and the assessee admits the liability to pay, no addition can be made under this provision. Here is a case in which the assessee categorically admitted before the ld. CIT(A) that the accounts with these suppliers/creditors were running and continuous. Nothing has been brought on record to controvert this submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to the assessment year 2013-14. 2. The first issue raised in the Departmental appeal through Ground Nos. 2 to 4 is against the deletion of addition of Rs.6.00 crore, which was made by the Assessing Officer (AO) u/s.68 of the Act towards unexplained share capital. 3. Briefly stated, the facts of the case are that the assessee filed its return declaring Nil income, after set off of brought forward loss of Rs.41,39,617/- against the current year s income. The AO issued various notices, which remained unresponded. Eventually, the assessment order was passed u/s.144 of the Act. The AO observed that the assessee received fresh share capital amounting to Rs.6.00 crore. In the absence of the assessee participating in the assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication money account through 7 entries passed on 31.3.2013. Page 133 is copy of account of Ganesh Trading Company, whose opening balance was Rs.1.69 crore and a sum of Rs.1.60 crore was transferred to share application money. Page 137 is a copy of account of Suresh Trading Company. The opening balance was Rs.1.26 crore and a sum of Rs.1.00 crore has been transferred from this account to share application money as on 31-03-2013. Page 134 is a copy of account of A1 Bottles Suppliers, having opening balance of Rs.1.15 crore out of which a sum of Rs.1.00 crore has been transferred to share application money on 31-03-2013. Similar is the position regarding the transfer of balances from Oriental Containers Ltd., Reliable Bottles Co., Pooja Trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Having heard the rival submissions and gone through the relevant material on record, it is seen that the addition was made by the AO u/s.41(1) of the Act. This section gets triggered on cession of trading liability. If the amount is still payable and the assessee admits the liability to pay, no addition can be made under this provision. Here is a case in which the assessee categorically admitted before the ld. CIT(A) that the accounts with these suppliers/creditors were running and continuous. Noting has been brought on record to controvert this submission of the assessee. If the accounts are running and continuous and the assessee admits the amounts still to be payable, obviously section 41(1) cannot be invoked. We, therefore, accord our ..... X X X X Extracts X X X X X X X X Extracts X X X X
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