TaxTMI 
TaxTMI 
2022 (9) TMI 1145
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.... "1. The ld. CIT(A) has erred in law and in facts to confirm action of AO to add 19,70,374/- being the outstanding amount of Shri D.M. Moradiya as on 31/03/2014 as fictitious liability U/s 41(1). 2. The CIT(A) has erred in law and in facts to confirm action of AO without appreciating the fact that there was no cessation of liability as the payment was done in the earlier year i.e. in the financial year 2011-12 and in such a case no addition can be made for cessation of liability U/s 41(1). 3. The appellant craves leave to add, amend, alter or delete any or all the above grounds of appeal at the time of regular hearing and all grounds are without prejudice to each other." 2. Brief facts of the case are that the assessee-....
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....ss of trading of black trp. During the assessment, the Assessing Officer was asked to furnish confirmation of sundry creditors for more than three years vide notice dated 16/11/2016. The assessee filed its reply, the confirmation of Dayalbhai M. Moradia was not received as he was out of station. The assessee furnished copy of bills of the said party. The Assessing Officer without giving any further opportunity, made the addition. The assessee filed confirmation from creditor Dayalbhai M. Moradia as additional evidence which could not be furnished during the assessment due to insufficiency of time. The assessee also relied on certain case laws. The submission of assessee was forwarded to the Assessing officer for his remand report. 4. The....
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....hat I have not signed in the said confirmation. It is illegally and unfair practice has been done by Kaneriya Infotech Ltd." The creditor also submitted copy of ledger account of assessee and copy of return of income and duly audited statement of account. On perusal of such statement furnished by creditor, the Assessing Officer reported that the creditor has not shown any amount outstanding from assessee on account of sale of sand. As per balance sheet, the outstanding amount of creditor is Nil. The Assessing Officer reported that the ledger account of assessee submitted by creditor itself shows that there was no liability of assessee. The Assessing Officer issued summon to the assessee to appear on 04/10/2018, it was reported that the asse....
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....unt on behalf of company. Thus, no addition under Section 41(1) can be made. To support his submission, the ld. AR of the assessee relied upon the decision of Hon'ble Gujarat High Court in PCIT Vs Matruprasad C. Pandey (2015) 377 ITR 363 (Guj). 7. On the other hand, the ld. Sr. DR for the Revenue has supported the orders of the lower authorities. The ld. Sr. DR for revenue submits that the assessee has made a false claim of cessation of liability and filed false confirmation. The creditor himself confirmed that he has been paid against the supply of goods in F.Y. 2011-12 itself. The appeal of the assessee deserve dismissal. 8. We have considered the rival submissions of both the parties and have gone through the orders of lower author....