2011 (7) TMI 1327

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....l filed by the revenue: - In this appeal, the only issue raised by revenue is against CIT(Appeals) order in deleting the addition of Rs. 12,05,268/- disallowed by the AO as unconfirmed creditors u/s 69 of the Act. 3. The assessee filed its return of income on 15.11.2007 declaring total income at Rs. 16,570/-. The case was selected for scrutiny and notice u/s 143(2) was duly issued and served upon the assessee on 26.09.2008. In the course of assessment proceedings, an information u/s 133(6) was called for from the following creditors: - i) Astha Metal Rs. 4,05,258/- ii) Capital Associates Rs. 8,00,010/- Total Rs. 12,05,268/-   The notices issued u/s 133() by the AO were returned unserved. The Assessing Officer....

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....h the parties and perused the material on record. The fact that the creditors were old creditors brought forward from earlier years has not been disputed by the department. These creditors have not been introduced during the year under consideration. There is no evidence or material on record to establish that the asessee's liability to pay the amount to the creditors have been ceased during the year under consideration. We, therefore, hold that the ld. CIT(A) is justified in deleting the addition. The amount payable to these creditors can be added to the assessee's total income in the year in which the assessee's liability to pay the amount ceases or extinguished and not in the year under consideration where assessee has admittedly shown t....

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....payment of salary and interest to the partners was introduced in the year 1993. The assessee firm had come to an existence in 1983. Therefore, a supplementary deed of partnership was executed in 1993, and a certified copy of supplementary deed of partnership was submitted in the Financial Year 1993-94 relevant to the A.Y. 1994-95. The ld. Counsel for the assessee further contended that since then, the situation in every assessment year had remained the same. A copy of supplementary deed of partnership was submitted before the ld. CIT(A). 14. The ld. DR, on the other hand, supported the orders of the authorities below. 15. We have considered the rival contentions of both the parties. On perusal of assessment order, we find that Assessi....

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....rofit and loss account. 17. After hearing both the parties, the additional ground raised by the assessee was admitted in as much as the identical ground was raised by the assessee before ld. CIT(A) but the assessee has failed to take this ground before us by mistake. 18. We have heard both the parties and perused the material on record. 19. In the assessment the AO disallowed 5% of the total expenses of Rs. 72,16,907/- debited to trading/profit and loss account in the absence of books of account or bills or vouchers. 20. Being aggrieved, the assessee preferred an appeal before the ld. CIT(A) and taken a ground before him that complete set of ledgers was on record and the same was filed along with the queries of the ld. ITO and r....