TaxTMI 
TaxTMI 
2014 (2) TMI 794
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....ts of section 41(1) of the Act are not satisfied in the instant case? B. Whether in the facts and circumstances of the case and in law, the Appellate Tribunal is justified in deleting the addition of Rs.37,52,752/- made by the A.O. under section 41(1) of the IT Act?" Briefly stated, the facts are that for the assessment year 2007-08, the assessee filed return of income which showed, besides others, a sum of Rs.37.52 lacs by way of his debt. The Assessing Officer inquired into such outstanding dues of the assessee. The assessee supplied details of 27 different creditors. The Assessing Officer issued summons to all these so called creditors and questioned them about the alleged credit to the assessee. In detail, the Assessi....
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....ra is squarely applicable. In this view of the matter ground No.1 taken by the assessee is allowed. 8. On the facts of the case, we do not consider it appropriate to restore the matter to the file of the CIT (A)/AO so as to give them second inning in order to establish the applicability or nonapplicability of section 41(1). It is a settled principle of law that a statutory provision can be invoked only when the conditions stipulated by it are established. In the present case, conditions of section 41(1) are not satisfied. It is the policy of law to ensure that the litigations are brought to an end expeditiously. In this view of the mater, matters under appeal cannot be restored at the request of the parties so as to give sec....
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....en after expiry of the normal period of limitation as provided in the Limitation Act." (ii) In the case of CIT v. Nitin S. Garg, (2012) 208 Taxman 16 (Guj.), it was observed as under: 15. In the case before us, it is not been established that the assessee has written off the outstanding liabilities in the books of account. The Appellate Tribunal is justified in taking the view that as assessee had continued to show the admitted amounts as liabilities in its balance sheet the same cannot be treated as assessment of liabilities. Merely because the liabilities are outstanding for last many years, it cannot be inferred that the said liabilities have seized to exist. The Appellate Tribunal has rightly observed that the Assessi....
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.... in view of the insertion of Explanation 1. However, at the cost of repetition it may be stated that in this case there is no unilateral act on the part of the debtor so as to bring about a cessation of its liability. Therefore, the other part of the decision would still apply to the facts of the present case, namely that the cessation of liability has to be either by reason of operation of law, i.e., on the liability becoming unenforceable at law by the creditor and the debtor declaring unequivocally his intention not to honour his liability when payment is demanded by the creditor, or a contract between the parties, or by discharge of the debt - the debtor making payment thereof to his creditor. In the present case, admittedly there in no....