AI Drafter 
TaxTMI 
TaxTMI 
2017 (9) TMI 41
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....nsidering the submissions of assessee and without considering the correct provisions of law. 2 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs.90,36,451/- u/s 41(1) is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. AO in making the addition of Rs. 12,320/- on account of bogus purchases. 4. That having regards to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. AO in making various disallowances under the following heads by treating it as personal in nature. * Rs. 7,670/- on account of business promotion expenses. * Rs.3,174/- on account of telephone expenses. * Rs.19,808/- on account of car running & maintenance expenses. * Rs.27,471/- on account of electricity expenses. 5. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making the various additi....
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....arties was examined. S.No. Name Status of PAN 1. M/s Shree Jee Enterprises (AGPDV6348I) Invalid PAN 2. M/s Shiv Agro India (APRBR9138K) Invalid PAN 3. M/s Hindustan General Suppliers (AVOPK 1046D) Invalid PAN On observation of the above mentioned facts the inspector was asked to submit the report on genuineness of these parties. Inspector Report dated 23-12-2013. S.No. Name & Address Inspector report 1. M/s. Shree Jee Enterprises, (AGPDV6348I) Y-198, Loha Mandi, Naraina, Delhi. On reaching the premises no such party found. On enquiry found that no such firm is carrying on business from here since last two years. 2. M/s Shiv Agro India (APRBR9138K) 540/35, Naya Bazar Lahori Gate, Delhi On reaching the premises no such party found. On enquiry found that no such firm is carrying on business from here since last two years. 3. M/s Shree Ji Enterprises CB 243, Ring Road, Naraina New Delhi-110028 On reaching the premises no such party found. Only letter box in the name of party kept there. 4. M/s Hindustan General Suppliers (AVOPK1046D) 2522 Dharm Pura, Chawari Bazar, Delhi-110006 On reaching the premis....
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....he ld. CIT(A). The ld. CIT(A), after considering all the submissions of assessee, observations of the AO and case laws relied upon, dismissed the appeal of the assessee. Aggrieved by the order of ld. CIT(A), the assessee is in appeal before the Tribunal. 5. The ld. AR reiterated the submissions made before the ld. CIT(A). He also submitted case laws compilation which contains 63 pages and another paper book containing 22 pages. The ld. AR further submitted that all the above creditors are outstanding from F.Y. 2008-09 and no any transactions have been made since then. The Assessing Officer has alleged that the creditors are outstanding in the books of account for more than 3 years, therefore, as per limitation of three years in respect of liability, such liabilities would stand ceased. It was submitted that these creditors have been paid in the subsequent years through banking channel and therefore, the Assessing 7 Officer was not justified in making the addition u/s. 41(1) of the IT Act. In support, the assessee has relied on so many case laws as compiled in the paper book. In respect of adhoc additions, it was submitted that the Assessing Officer has not pointed out as to whic....
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....anation 1.-For the purposes of this sub-section, the expression "loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessation of any liability by a unilateral act by the first mentioned person under clause (a) or the successor in business under clause (b) of that subsection by way of writing off such liability in his accounts. Explanation 2.-For the purposes of this sub-section, "successor in business" means,- (i) where there has been an amalgamation of a company with another company, the amalgamated company; (ii) where the first-mentioned person is succeeded by any other person in that business or profession, the other person; 9 (iii) where a firm carrying on a business or profession is succeeded by another firm, the other firm; (iv) where there has been a demerger, the resulting company. A perusal of the aforesaid provision of law as contained in section 41(1), we opine that these provisions are applicable in the cases where the liability stood remitted or ceased during the year under consideration. In the instant case, it has not been....
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....ally without any act on the part creditor will not enable the debtor to say that the liability has come to an end. Apart from that, that will not by itself confer any benefit on the debtor as contemplated by the section." (ii). Hon'ble Gujrat High Court in the case of CIT vs. Bhogilal Ramjibhai Atara, 222 Taxman 313 (Guj.) has held as under : "Section 41(1) would apply in a case where there has been remission or cessation of liability during the year under consideration subject to the conditions contained in the statute being fulfilled. Additionally, such cessation or remission has to be during the previous year relevant to the assessment year under consideration. In the present case, both elements are missing. There was nothing on record to suggest there was remission or cessation of liability that too during the previous year relevant to the assessment year 2007-08 which was the year under consideration. It is undoubtedly a curious case. Even the liability itself seems under serious doubt. The AO undertook the exercise to verify the records of the so called creditors. Many of them were not found at all in the given address. Some of them stated that they had no dealing....