TaxTMI 
TaxTMI 
2017 (12) TMI 678
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....e order of the Income Tax Appellate Tribunal dated 03.01.2012 for the Assessment Year 2007-08 raising the following questions of law:- "(i) Whether the finding of the ITAT that the amount of 1 crore was never shown in the profit and loss account, hence assessee is entitle to relief without examining the fact that the assessee had suppressed the sales intentionally by not revising the price per unit fixed in the year, 2011? (iii) Whether on the facts and circumstances of the case, the Hon'ble ITAT was justified in law as well as in fact upholding the finding of the CIT (Appeals) that the transaction of Rs. 1,00,00,000/- could not be categorized as cessation of liability in terms of provisions of Section 41(1) of the Act....
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....rration 'share application money transfer' and thus adjusted the share application money to sale price realisable from M/s Widecom Group INC. While the assessing officer proceeded to make an addition of aforesaid Rs. 100,00,000/- under Section 41 of the Act, upon appeal, CIT (Appeals) called for a remand report from the assessing officer. It further appears despite several opportunities granted the assessing officer did not respond to the same. Thereafter, the CIT (Appeals) deleted the aforesaid addition with the following observation:- "6. After having carefully considered all relevant facts and circumstances of the case, my conclusions/observations are as under:- 1) The appellant's contention regarding gro....
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....ctual cessation or remission of liability and it would not apply to the present case where the amount shown deposited towards share application money has been appropriated and thus adjusted against money that the assessee was entitled to recover from M/s Widecom Group INC. He further submits that transaction of sale of goods made by the assessee to M/s Widecom Group INC during the financial year 2004-05 has not been doubted and therefore, the addition made by the assessing officer was wholly arbitrary. Having considered the arguments advanced by learned counsel for the parties, we find that the assessing officer never doubted the transaction of sale of goods made by the assessee during the financial year 2004-05. It is also not the case ....
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....e, the principle would have no application for the reason that the assessee had in the first place made sale of goods to M/s Widecom Group INC. for which it became entitled to receive money from that purchaser/entity. Then instead of receiving full value of goods sold by it to M/s Widecom Group INC., the assessee passed entries in its books of account and thus recovered its money from the said purchaser through transfer of the share application money Rs. one crore to its general account evidenced by proper entries recorded in its books of account. It thus adjusted the credit entry arising on account deposit of Rs. one crore by M/s Widecom Group INC. against share application against the price of goods sold by it to M/s Widecom Group INC. Th....