2022 (9) TMI 106

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....f Income Tax (Appeals), Jamnagar has erred in dismissing the appeal of the assessee whereby upholding the addition of Rs. 10,21,420/- made by the Assessing Officer u/s. 41(1) of the I.T. Act is unwarranted, unjustified and bad in law. Your applicant reserve the right in addition or alteration in the grounds of appeal at the time of hearing." 3. The brief facts of the case are that the first appeal was filed by the assessee against the addition of Rs. 10, 21, 420/- made by the AO being liability towards sundry creditors, and the said appeal was dismissed by CIT (A)-I, Rajkot, vide order dated 02-01-2012. Against the said order, the assessee filed appeal before Rajkot bench of ITAT who vide order dated 30- 10-2012 set aside the order of Ld....

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....lities, it is only upon the remission or cessation that section 41(1) of the Act comes into operation. Since the liability had not ceased, AO erred in facts and in law in invoking the provisions of section 41(1) of the Act. However, Ld. CIT(Appeals) dismissed the assessee's appeal with the following observations: "Decision: 7. I have duly considered the submission of the appellant and also gone through the assessment order. 7.1 From the above it is quite obvious that the onus to prove that the liability was actually subsisting, has not been discharged by the appellant despite opportunity provided as per directions of Hon. ITAT. Hence, I have no option but to concur with the finding given by the CIT(A) in first app....