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2012 (10) TMI 861 - ITAT MUMBAIPenalty u/s 271(1)(c) - disallowance including addition of sundry creditors u/s 41(1) - Held that:- As it is not in dispute that the outstanding liabilities in the accounts of sundry creditors was added by the A.O. u/s 41(1) without considering the fact that such amount was payable by the assessee from October, 1999, 2000, 2001 & 2003. Thus merely because the assessee did not file the appeal before the CIT(A) against the addition made u/s 41(1) does not mean that the said liability is false or untrue or the assessee has concealed the particulars of its income. As it is not the case of the Revenue that the assessee has unilaterally written back the accounts of the sundry creditors in its P&L account as a matter of fact the liability was shown in the balance sheet as on 31-3-2007. The assessee being a limited company, this amounted to acknowledging the debt in favour of the creditors for the purposes of section 18 of the Limitation Act, 1963. The assessee’s liability to the creditors, thus, subsisted and did not cease nor was it remitted by the creditors and the liability was enforceable in a court of law. This being no concealment on the part of the assessee which may call for levy of penalty u/s 271(1)(c) - in favour of assessee.
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