TaxTMI 
TaxTMI 
2016 (2) TMI 75
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....e by the Assessing Officer u/s. 41(1) of the Act amounting to Rs. 81,60,350/- 2. The Ld. CIT(A)-XIV, Ahmedabad has erred in law and on facts in deleting the addition of unaccounted purchase and sale of shares of Rs. 14,727/-." 2. Assessee is engaged in the business of trading of shares and securities. Assessment has been completed determining total income of Rs. 79,17,988/- as against returned total loss of Rs. 1,37,176/- by making addition of Rs. 81,60,350/- on account of cessation of liability u/s. 41(1) of the Act and Rs. 14,7,47/- on account of unaccounted purchase and sale of shares. Thus, first issue is against the addition of Rs. 81,60,350/- on account of cessation of liability u/s. 41(1) of the Act. As per Assessing Offi....
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....aised on behalf of the asessee and having considered the same CIT(A) deleted addition that of disallowances of cessation of liability made by Assessing Officer u/s. 41(1) of the Act amounting to Rs. 81,60,350/-. The same has been opposed on behalf of the revenue interalia submitting that CIT(A) was not justified in deleting the addition of disallowance of cessation of liability. Accordingly, order of the CIT(A), be set aside and that of AO be restored. On the other hand, Ld. AR supported the order of CIT(A). 2.1 After going through rival submissions and material on record, we find that assessee-company had purchased shares from various parties and the same were delivered to company in physical form. Since the same could not be subsequent....
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....n existence in that year or not; OR (b) the successor in business has obtained, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first mentioned person or some benefit in respect of the liability, referred to in clause(a) by way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits & gains of the business or profession and accordingly chargeable to income-tax as the income of that previous year. [ Explanation 1 - For the purposes of this subsection, the expression "loss or expenditure or some benefit in respect of any such trading ....
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.... any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation of thereof, the amount obtained by such person or value of benefit accruing to him shall be deemed to be profit and gain of business or profession and accordingly chargeable to income tax as the income of that previous year. In case before us it is not the case of Assessing Officer that assesseecompany has received any cash or benefit in respect of trading liability by way of remission or cessation thereof as envisaged in the said section. Assessee has filed various details and explanation in respect of outstanding creditors in the form of complete list of creditors, copy of le....
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....f disallowance of cessation of liability made by AO u/s. 41(1) of the Act amounting to Rs. 81,60,350/-. 3. Next issue is with regard to addition of Rs. 14,727/- on account of alleged unaccounted sale. 4. The said addition was made in two parts; (a) unaccounted sale of shares 14,490/- and (b) unaccounted purchase of Rs. 237/-. Assessing Officer stated that on verification of transaction of various share trading account it was noticed that assessee had purchased 1,21,483 shares of Spectra and had sold 59211 shares which implies that assessee should have shown a balance of 62272 shares as closing stock. After taking into consideration the total holding in demat account of 4791 and pool account holding of 56981 shares, it was concluded th....