TaxTMI 
TaxTMI 
2018 (12) TMI 464
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....6,06,780/-. The said return was processed under Section 143(1) of the Income Tax Act, 1961, (for short, 'the Act'). On 12-3-2007, a survey under Section 133-A of the Act was conducted in the business premises. During the course of survey, the assessee was asked to produce the books of accounts for the assessment years 2005-06 and 2006-07. He did not produce the same at the time of survey. The books produced were pertaining only to purchasers and that too partly. There was no Sales Register, Stock Register, Cash Book, etc. He stated that the books are in the Auditor's Office and would be submitted later. A physical stock was taken at the time of survey. In spite of issuing several reminders and opportunities, neither the books of accounts no....
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....ere returned unserved on the grounds of 'insufficient address', 'no such person', etc. and the total of such amount was worked out to Rs. 29,75,621/-. In view of such discrepancies, the assessee was given a show-cause letter to furnish his explanation as to why the said discrepancies in the sundry creditors' balances should not be added back to the income. In response, a reply was furnished, wherein the assessee has taken the following objections: a. To qualify for inclusion or addition of any income, investments or credit, such income, investment or credit should accrue or arise during the period from 1-04-04 to 31-3-2005. b. Although the business income is considered u/s.28, certain special item of income or investment or credit are....
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....worked out by the assessee." 3. With regard to the creditors, whose addresses were not furnished, the assessee submitted that balance of total creditors as arrived at was Rs. 29,75,621 and reducing the balance as pertaining to the period ended 31-3-2004 of Rs. 32,39,713/-. The difference was Rs. 12,06,135/-. It was argued that some of them have closed their business or have shifted to other towns. However, the assessee undertook to produce proper and cogent evidences in support of the purchasers made by those creditors. The assessee requested for the copies of the sworn statement recorded and the confirmation letters obtained by the Department from the creditors. The same was furnished to him. Thereafter, the assessee has not raised a....
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....been invoked by the Revenue. It is contended that the list of creditors having been furnished, there is cessation of liability and therefore, the findings recorded by the Assessing Officer and as confirmed by the Tribunal is incorrect. She relies on the judgment of this Court dated 24-3-2016 passed in Income Tax Appeal No.658 of 2015 with reference to paragraph No.9, wherein it was held that in legal parlance, merely because the creditor could not be traced on the date when the verification was made, the same is not a ground to conclude that there was cessation of liability. Cessation of liability has to be cessation in law, of the debt to be paid by the assessee to the creditor. The debt is recoverable even if the creditor has expired, by ....
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....Here is a case, where the creditors have confirmed the balance and provided the details as called for. 7. Therefore, on considering the contentions, we are of the view that the judgment would not come to the aid of the appellant, as the facts narrated are different to the facts of the present case. Therefore, the said judgment would not be applicable to the case on hand. 8. It is further contended that there was no opportunity granted to the appellant for cross-examination of the creditors. The appellant's counsel relies on the judgment of the Hon'ble Supreme Court in the case of M/S. ANDAMAN TIMBERS INDUSTRIES v. COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II, (Civil Appeal No.4228 of 2006), disposed off on 2-9-2015, wherein it was held ....