2010 (10) TMI 170

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..... 3. The Assessing Officer while carrying out the assessment noticed that the appellant had shown in its balance sheet certain sundry creditors. In the financial year, this amount was shown as Rs. 39,96,951/-. The Assessing Officer was of the opinion that the creditors shown appeared to be bogus. In support of this opinion, following instances were given by the assessing Officer:- "In the Balance Sheet for financial year ending 31.03.2002 assessee has given a detail of this amount of Rs. 39,96,951/- as outstanding since 1982-83 onwards. Surprisingly, these details show the name of one "Banssa Lal" who had outstanding recoverable from assessee in 1982-83 for Rs. 5.56 lacs. Banssa Ram again claimed to have supplied material in A.Y. 19....

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....s is upon the department to show that these conditions are satisfied:- "i) For the relevant year, an allowance or deduction has been made in respect of any loss, expenditure or trading liability incurred and secondly the assessee must have  subsequently (1) obtained any amount in respect of such loss or expenditure or (ii) obtained any benefit in respect of such trading liability by way of remission or cessation thereof. In the case of the appellant, the first condition stands satisfied in as much as it is not the case of the department that the liabilities in question have not been allowed in the preceding assessment year in which they have been incurred. The second condition is however not satisfied inasmuch as the appellant during t....