2014 (5) TMI 656

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....estaurants as well as earning franchise fees by lending its expertise and technical know how, during the year under consideration, had shown an amount of Rs.15,18,077/- as outstanding against M/s. Sujash Members Association Ltd. Since the said amount had been outstanding for more than three years prior to A.Y. 2008- 09, the AO sought the assessee to file details with respect to the credit and had enquired whether the liability was discharged. The assessee was also required to file confirmation of the existence of credit if the same was not discharged till date. The assessee, in its in reply, stated that it had entered into an agreement with M/s. Sujash Members Association Ltd to run the restaurant business at an agreed royalty on sales. How....

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....ilability of creditors and lack of correspondence with them would not obliterate the debt. Besides the said contention, the assessee stated that the entire liability was paid in the immediate succeeding assessment year 2009-10 by way of assignment of the same to one of the partners, namely, Mr. Sudhir Chaddha and as far as the Assessee firm is concerned, the said liability had been paid. However, the Ld.CIT(A) did not accept the claim of the assessee as the assesee had not filed any confirmation from the concerned party to the effect that the liability remained outstanding and due from the assessee. The Ld.CIT(A) had further observed that notice issued to the party at the address furnished by the assessee also was returned back unserved. Al....