AI Drafter 
TaxTMI 
TaxTMI 
2017 (3) TMI 387
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITA No. 399 /PNJ/2 014 for the Assessment Year 2010-11. 2. The issue involved in the present case according to the learned counsel appearing for the Revenue, Mr. Y.V. Raviraj, is that the learned Tribunal has wrongly deleted the addition made under Section 41(1) of the Act made in the hands of the assessee, on account of the remission/ cessation of the liability of the various transporters, who transported the minerals for the assessee during the relevant period. He submitted that the assessee failed to produce these transporters/Trade creditors before the Assessing Authority, despite the summons issued to them under Sections 131 and 133(6) of the Act and since, the parties were not produced, the learned Assessing Authority was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has been debited by journal entry, which was made by RTGS to Vinayak Enterprises, which has also given confirmation letter. In respect of confirmation letter when the assessee paid this amount through banking channel, we are of the view that this party do exists at a relevant time. The Department has also accepted the written off for the same party. Therefore, in our opinion, no addition can be made u/S. 41(1) of the Act. 9) In respect of Aniketh Enterprises, the assessee has produced copy of ledger account at page Nos. 20 and 21, which reveals that amount has been paid by the assessee through RTGS. The assessee has filed the confirmation letter of the said party and also filed copy of income tax return. Therefore in our opinion, no addi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enditure or trading liability incurred by the assessee and subsequently during any previous year, persons has obtained whether in cash or in 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 thereof, the amount obtained by such persons or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income as the income of that previous year. If any expenditure allowed as the deduction in any of the earlier years and if the amount claimed is recovered subsequently, it is chargeable to tax. The recovery of such expenditure, loss or liability is taxable on the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he respondent-assessee, Mrs. Jinita Chatterjee, relied upon the decision of the Division Bench of this Court in the case of The Commissioner of Income Tax and Others V/s. M/s. Alvares & Thomas (ITA No. 658/2015), decided on 24.03.2016. She has submitted before us that, the Division Bench of this Court, in turn relying upon the decision of the Delhi High Court, in the case of The Commissioner of Income Tax-III V/s. Shri. Vardhman Overseas Ltd. reported in (2012) 343 ITR 408 (Delhi), has rightly set-aside the additions made in the hands of the respondent-asses see under Section 41(1) of the Act. As the assessee in the present case has produced ample documentary evidence in the form of ledger account and the payments made to the transporters t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at, an y benefit in respect of such trading liability was ta ken by the assessee but, the Revenue contends that since the burden was not discharged of existence of the liability, it be treated as cessation of the liability and therefore, Section 41(1) could be invoked. Further, stand of the Revenue is that, when in respect of debt in question, confirmation was called for, a letter was produced of the creditor with its address but, when the same was verified, the report was that, party could not be traced and therefore, it was not verifiable. 9. In our view, even if we accept the contention of the Revenue that the party could not be traced and therefore debt could not be verified then also, by no stretch of imagination can it be held t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pinion that the burden lies upon the Revenue to establish, before applying Section 41(1) of the Act, to make additions or disallow the deduction under Section 41(1) of the Act to establish that the liability of the respondent-assessee towards such creditors has seize d in law or so has been remitted by the creditors finally. 9. In the present case, we find that the Tribunal has clearly recorded the evidence and findings of facts in favour of the respondent-assessee that the assessee has produced the documentary evidence in the form of ledger accounts and proof of payments made through Bank channel and PAN numbers also. In our opinion that prima facie, ought to have satisfied the learned Assessing Authority, about the existences of the tr....