2014 (5) TMI 656

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....a firm engaged in the business of running restaurants 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 ....

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....) to support the contention that mere non-availability 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....

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....Members Association Ltd. in the books of Shri Sudhir Chaddha filed by the assessee shows that on various dates in 2009 amounts have been paid in cash, however, there is no evidence regarding the name/signature of the recipient to support the fact that such payment is in fact made to Sujash Member Association Ltd. The Ld.CIT(A) has further observed that from the entry known as "To DD Rs.6,12,500/-", it is not ascertainable as to in which name the DD has been issued and encashed by whom. It is relevant to state that the Ld.CIT(A) has noted that if the assessee is able to make payment in cash, or deliver a DD, it is certain that it would definitely know the address of the party, however the same is not furnished. Considering the entirety of fa....