TaxTMI 
TaxTMI 
2012 (12) TMI 57
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....sessing Officer on account of disallowance under Section 40A(2)(b) of the Income Tax Act ? (II) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in confirming the order of the Appellate Commissioner in deleting the addition of Rs.2,55,110/- made by the Assessing Officer on account of unexplained creditors under Section 41(1) of the Income Tax Act ? (III) Whether, on the facts and in the circumstances of the case, the order of the Income Tax Appellate Tribunal is contrary to the evidence and material on the record of the case and suffering from utter non application of mind and hence perverse or not ?" 2. Question No.3 is merely in the nature of contention and therefore, same is....
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....invoke Section 40A(2)(b) of the Act. It was noted that Assessing Officer had made only adhoc disallowance under the said provision without pointing out how the payments made to the specified persons were excessive or unreasonable. 5. We are of the opinion that the entire issue is in the realm of appreciation of evidence and no question of law arises. 6. With respect to Question No.2, the Assessing Officer made addition of Rs.2.55 lacs (rounded off) invoking Section 41(1) of the Act. The assessee carried the matter in appeal. The CIT(A) deleted the addition primarily relying on the decision of the Apex Court in case of Commissioner of Income- Tax v. Sugauli Sugar Works (P.) Ltd., reported in 236 ITR 518. The CIT(A) observed that even afte....
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....were bogus. Even if the creditors were not genuine, addition could not be made under the year in consideration. 9. In case of Sugauli Sugar Works (P.) Ltd. (supra), the Apex Court observed as under : "... The principle that expiry of the period of limitation prescribed under the Limitation Act could not extinguish the debt but it would only prevent the creditor from enforcing the debt, has been well settled. It is enough to refer to the decision of this Court in Bombay Dyeing and Manufacturing Co. Ltd. v. State of Bombay, AIR 1958 SC 328 : (1958) SCR 1122. If that principle is applied, it is clear that mere entry in the books of account of the debtor made unilaterally without any act on the part of the creditor will not enable the debtor ....