2019 (2) TMI 1724

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....short 'the Act'. Heard both the parties. Case file perused   2. The sole substantive question that arises for our apt adjudication in the instant appeal is as to whether both the lower authorities have rightly invoked cessation of liability addition u/s 41(1) of the Act regarding the sum of Rs. 65.50 lac claimed as sundry creditors liability in books of account since 2009-10. Then is no dispute between the parties the very amount stood allowed as a liability in the past very many assessment years involving both summary as well as regular assessments.  The assessee's books have also not indicated the impugned sum as a case of cessation of liability. We notice in this backdrop of facts that tribunal's co-ordinate bench decisio....

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....r the first time followed by similar treatment in the intervening assessment years without any change relevant in facts. Its case was that none of its creditors had ever remitted their respective sums so as to attract section 41(1) of the Act. It highlighted the fact that above random creditors had supported its case as per their written replies in response to the respective summons. All this failed to convince the Assessing Officer. He noticed that one of the said written replies did not contain even concerned party's signatures. He thereafter narrated the entire backdrop and quoted four of the tested check parties statements to conclude that the impugned liability was not genuine one so as to be taken as subsisting upto impugned assessmen....

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.... Learned Departmental Representative vehemently argues in the light of Assessing Officer's findings that assessee's impugned liability is not a genuine one first of all as per the four parties's directors' statements. He thereafter submits that it can be safely assumed that the liability in question as ceased u/s. 41(1) of the Act. We do not find merit in either of these two arguments. Case file revealed that the assessee has throughout been claiming the impugned liability for a time span of almost three decades without any such objection from department. Relevant sundry creditors list runs into 96 parties; amount and address-wise, particularly in paper book pages 55 to 56 as on 31.03.2001. The assessee partly paid the sum in case of five o....