2021 (10) TMI 278

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....e CIT(A)-15,Mumbai has erred in confirming addition made by the Ld.AO [ACIT -8(2)(1), Mumbai u/s 41(1)] of Rs. 2,08,19,001, on the ground that "liability outstanding for a long period of time is assessable as income even if no write-back of liabilities in its books of accounts made and further if the assessee is unable to prove genuineness of liability". The Hon'ble CIT(A)-15 failed to consider the fact that a) In remand report dated 01.10.2018 the Ld AO confirmed that the confirmation letters of the creditors were submitted by the assessee company during the assessment proceedings and are on the record. b) The company did not write off the said liability of Rs. 2,08,19,001/- in his books and confirmed that the said liability i....

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.... confirmed in the impugned order. The Ld. DR submitted that the appeal is liable to be dismissed. 3. Having heard rival submissions and after careful consideration of material on record, our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 4. The material facts are that the assessee being resident corporate assessee is state to be engaged as builder. An assessment was framed for the year u/s 143(3) on 23/03/2015 wherein certain additions were made in the hands of the assessee and the same are the subject matter of appeal before us. Remission / Cessation of Trading Liability u/s 41(1) 5.1 It transpired that the assessee had long outstanding sundry creditors aggregating to Rs. 208.19 Lacs as detail....

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....ry creditors and the amounts were shown as payable in the books of accounts. There was no write-back of the amounts either by the assessee or by the sundry creditors. This is further fortified by the fact that certain payments / adjustments have been done in subsequent financial year and the balance amount has been offered to tax when the liability has actually ceased. Therefore, the facts of the case do not convince us to confirm the impugned addition u/s 41(1). By deleting the same, we allow this ground of appeal. Addition on account of alleged on-money 6.1 The assessee sold 6 flats during the year as detailed in para 5.1 of the order. The sale occurred evenly throughout the year. Though the area of the flats was quite similar, however....

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.... remand report, submitted that sale consideration of each of the flat was higher than fair market value. The fact of affidavit of three buyers was also confirmed. However, finding large variation in the sale price, Ld. CIT(A) chose to confirm the addition. Aggrieved the assessee is in further appeal before us. 6.3 From the factual matrix as enumerated hereinabove, we find that all the flats sold by the assessee has been sold at much higher prices than the stamp duty value of each of the flat and therefore, the provisions of Sec.50C were not applicable to the facts of the case. The assessee has sold the flats evenly throughout the year in price range of 4428 per square feet to 6958 square feet. The factors leading to variation in the sale p....