TaxTMI 
TaxTMI 
2015 (7) TMI 275
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.... Commissioner of Income Tax (Appeals) upholding the addition made by the Assessing Officer of Rs. 31,82,258/- u/s. 41(1) of the Act. 4. The brief facts of the case are that the Assessing Officer observed that the assessee has shown sundry creditors for Rs. 31,82,258/- in the balance sheet. The Assessing Officer required the assessee to file confirmation and ID proof of the creditors. The assessee could not produce the same. Therefore, the Assessing Officer issued letter u/s. 133(6) of the I.T. Act to the creditors shown by the assessee to verify the genuineness of the assessee's claim at the addresses given by the assessee. However, except in one case of Aman Road Lines, all other letters were returned back unserved by the postal authori....
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....income found that the assessee has shown sundry creditors for Rs. 31,82,258/-. In order to verify the same, the Assessing Officer issued letters u/s. 133(6) of the Act. But except in the case of Aman Road Lines, all other letters were returned back by the postal authorities. The Assessing Officer observed that the assessee has not filed confirmation and ID proofs or PAN of the creditors and therefore, by invoking the provisions of section 41(1) of the Act, he made addition of Rs. 31,82,258/- to the income of the assessee on account of cessation or remission of liability which was confirmed in appeal by the Commissioner of Income Tax (Appeals). 9. We find from the order of the Commissioner of Income Tax (Appeals) that the creditors in que....
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....tablished through biparte inquiries, the liability as it stands perhaps holds that there was no cessation or remission of liability and that therefore, the amount in question cannot be added back as a deemed income under section 4 (c) of the Act. This is one of the strange cases where even if the debt itself is found to be non-genuine from the very inception, at least in terms of section 41(1) of the Act there is no cure for it." We find that the above quoted decision of the Hon'ble High Court squarely applies to the facts of the assessee's case. Therefore, respectfully following the same, we set aside the orders of lower authorities and delete the addition of Rs. 31,82,258/- made u/s. 41(1) of the Act on account of cessation or remissio....
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.... the appeal and that he placed reliance on the decision of the Hon'ble Gujarat High Court in the case of Bhogilal Ramjibhai Atara (supra). 15. On the other hand, the Departmental Representative supported the order of the lower authorities. 16. We have heard the rival submissions and perused the orders of lower authorities and material available on record. In the instant case, the Assessing Officer found from the balance sheet of the assessee that the assessee has shown unpaid expenses aggregating to Rs. 13,51,347/-. The assessee could not produce evidences in support of the expenses and therefore, the Assessing Officer treated the amount of Rs. 13,51,347/- as bogus expenses claimed by the assessee and added the same to the income of t....
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....ng Officer for Rs. 4,64,592/- u/s. 68 by treating the loan as unexplained cash credit. 18. We have heard the rival submissions and perused the orders of lower authorities and material available on record. In the instant case, the Assessing Officer observed that the assessee has shown loan of Rs. 4,64,592/- from six parties as under: Sr.No. From whom loan taken Amount in Rs. 1 Aman Road Lines 2,75,392/- 2 Bhupendrasingh Delalsingh Bhaktana 38,300/- 3 Jitendrasingh Delalsingh Bhaktana 38,700/- 4 Laxmanbhai A Gadegi 38,000/- 5 Mehboobbhai Malak 36,700/- 6 Rajubhai Soni 37,500/- Total 4,64,592/- He observed from the ledger account furn....