2012 (11) TMI 1212

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....T(A) erred in deleting the addition of Rs. 3,87,421/- on account of cessation of liability u/s.41(1) out of various creditors appearing in the books of the assessee. 2. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in deleting the disallowance of Rs. 2,90,621/- on account of exce3ss claim of diesel expenses. 2. Apropos to Ground No.1, facts in brief as also the issue emerged from the corresponding assessment order passed u/s.143(3) dated 23.11.2009 were that the assessee is a supplier of Hydro -Mobile Cranes and JCB. Out of the list of the creditors as per the balance-sheet of the assessee, it was noted by the AO that there were six sundry creditors appeared in the accounts. The assessee ....

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.... addition made by the Assessing Officer in such circumstances cannot be sustained. Thus this ground of appeal is allowed." 4. Having heard the submissions of both the sides, we are of the considered view that in the absence of any cogent evidence to believe that the liabilities in question have actually ceased to exist, it was unjustifiable on the part of the AO to assume on his own that the same have become barred by limitation being appearing in the books of accounts for more than three years. Rather, in the case of CIT vs. Silver Cotton Mills Company 125 Taxman 741(Guj.), the Hon'ble Court has held that the liabilities if appearing in the books of accounts should subsist although it might not be enforceable on account of some provisio....

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....ntioned that diesel price has increase by 7.19% as compared to the preceding year. In view of these parameters and also in view of the fact that the contention of the appellant was not countered by the Assessing Officer by cogent material the plea of the AR is acceptable. It is also a fact that no specific defects were pointed out by the Assessing Officer, where the AO has made the addition on ad hoc basis. In the given factual matrix, I am of the opinion that there is no justification for ad hoc disallowance out of diesel expenses. The addition is therefore directed to be deleted." 6. Having heard the submission of both the sides and also considering the factual aspect of the case in the light of comparative chart placed on record, we h....