Company Proves Creditor Payments & Loan Validity; Appeal Allowed, No Liability Cessation Under Income Tax Law.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The assessee company had shown the liability as outstanding amounts payable to three disputed creditors in its balance sheet as of 31.03.2015. The assessee provided evidence that these disputed sundry creditors were discharged in full in the subsequent assessment year. When amounts are shown as payable in the balance sheet, the debt is acknowledged by the assessee, and there cannot be any remission or cessation of liability u/s 41(1) of the Act. The assessee provided confirmations from the three sundry creditors, and if any discrepancy is found with their balance sheets, action should be taken against them, not the assessee. The assessee discharged its primary onus, and Section 41(1) cannot be applied in this case, as per the New World Synt.........