2021 (2) TMI 61

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....the Ld. CIT(A) erred in confirming the action of the A.O is adding an amount of Rs. 1,36,350/- towards franking charges and Rs. 7,21,406/- towards processing charges and registration fees without appreciating the fact the same were incurred towards money borrowed for business purpose. 2. On the facts and circumstances of the case in law, the CIT(A) erred in confirming the additions of the A.O of Rs. 60,375/-, being trade payables, on account of creation of liability u/s 41(1). 3. On the facts and circumstances of the case and in law, the CIT(A) erred in adding an amount of Rs. 13,15,592/- being trade payables, as unexplained credit without appreciating the fact that the liability to pay for the same has not yet been absolv....

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....t towards the franking charges and disallowed the claim being in the nature of capital expenditure. The A.O. also treated processing charges and registration charges of Rs. 8, 31,076/- as capital expenditure and made an addition. The A.O made addition of Rs. 11,57,145/- in respect of cessation of liability U/sec41(1) of the Act, which are outstanding for longer period and the A.O assumed that it is no longer necessary for assessee to make the payment. The A.O. also observed that the assessee has failed to reconcile the difference in unsecured loans and made an addition of Rs. 24,28,684/- and assessed the total income of Rs. 1,03,87,560/- and passed the u/s 143(3) of the Act dated 27.03.2015. 3. Aggrieved by the order the Assessee filed a....

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.... are that the trade liabilities are carried forwarded in the books of accounts from the earlier years and the assessee is liable for payment to the Creditors and substantiated with the details. We find the assessee has not written off the liabilities as no longer required in the books of account. Further on perusal of assessment order, we find that the A.O. has neither recorded satisfaction for making disallowance or made enquires on trade creditors nor supported with any evidence that the trade liabilities are no longer payable by the Assessee. Accordingly, we set aside the order of the CIT(A) on this disputed issue and direct the Assessing officer to delete the addition. 7. Whereas, In respect of franking, processing and registration c....