2021 (12) TMI 694

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....65,11,898 (ii) Disallowance of depreciation on motor car and revolver Rs. 8,35,388 (iii) Disallowance of interest on car loan Rs. 3,94,623 We shall adjudicate the above issues as under:- Addition u/s 41(1) of the I.T.Act - Rs. 4,65,11,898 3. Brief facts in relation to the above addition are as follows: During the year, the assessee had invested in property to the extent of Rs. 79 lakh and taken unsecured loan to the extent of Rs. 7 crore. The closing balance of the unsecured loans is shown at Rs. 20,58,62,729. The assessee was asked to furnish the confirmation from the loan creditors. The assessee did not furnish the confirmation. Therefore, the assessee was show caused by the Assessing Officer vide letter dated 0....

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....nish any further confirmation from the loan creditors. Therefore, it was concluded by the CIT(A) that he was constrained to uphold the addition made by the A.O. for want of confirmation. 5. Aggrieved, the assessee has raised the issue before the Tribunal. The learned AR filed a paper book comprising of 65 pages enclosing therein the orders of the Income Tax Authorities, the return of income along with financial statements for the relevant assessment year, the judicial pronouncements relied on, etc. The learned AR submitted that the Assessing Officer and the CIT(A) have failed to appreciate that the outstanding liability shown in the books cannot be held as ceased to exist. It was submitted that it is also a fact that the assessee has not....

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....profits and gains of a business or profession, in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and (ii) subsequently during any previous year the assessee had obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof. 7.1 In the instant case, admittedly, it is loan creditors and not a trading liability. So, the assessee has not obtained allowance or deduction in computing the profits and gains of business or profession in respect of assessment of any year. Therefore, the first condition enumerated u/s 41(1) of the I.T.Act d....