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TMI Blog2012 (8) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A). It is affirmed - Decided against assessee. Extinguishment of liability - addition u/s 41(1) - Held that:- Admittedly, from the AY 2002-03 the assessee had been showing these liabilities in the books of accounts and in spite of laps of mandatory period of three years after which debt cannot be recovered in the absence of part payment or acknowledgement and the assessee has also changed line of business i.e. from India made foreign liquor to country liquor and no payment of any sort was made to any of the parties mentioned in the assessment order, one undisputed fact is emerging that there is no intention on behalf of the assessee to repay the impugned amounts or any part thereof. Hence we find no merit in this ground - Decided a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and Shri Arun Dewan, ld. Sr. DR. The crux of arguments on behalf of the assessee is that the assessee is dealing in country liquor whereas the ld. Assessing Officer applied the facts of Indian made foreign liquor. It was pleaded that stringent and excise duty check is applicable on the assessee and the dispute is with regard to certain conditions. It was argued that even the ld. Assessing Officer has not doubted the quantity but the sale price. Quantity was also claimed to be governed by the Excise Rules and the only allegation levelled by the Assessing Officer is that the sale was made below the stated/agreed price. The crux of arguments is that it is a matter of estimation, therefore, a reasonable estimation may be made. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42/- 21/- 16.10.07 to 31.1.08 88/- 44/- 22/- 68/- 34/- 17/- 1.2.08 to 31.3.08 96/- 48/- 24/- 76/- 38/- 19/- 3.1 In view of the above, the learned Assessing Officer was of the view that the sale rate from the month of October, 2007 onwards was significantly low, therefore, in the absence of satisfactory explanation from the assessee and the letter of the excise department dated 12.11.2010 stating that there was no permission for sale of liquor below minimum rates to the assessee and also in the absence of sale vouchers, the books were rejected under the provisions of section 145(3) of the Act and the sales were estimated at Rs.1,40,28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Rs.8,20,628/- on account of extinguishment of liability u/s 41(1) of the Act. The crux of arguments on behalf of the assessee is that the learned CIT(A) is quite unjustified in confirming the addition without considering the full facts and the legal position, therefore, it was pleaded that the conclusion drawn in the impugned order is quite illegal. It was also pleaded that the liabilities are outstanding in the balance sheet, therefore, the limitation period does not apply. On the other hand, the learned Sr. DR strongly defended the impugned order by submitting that the said liabilities are outstanding for the last so many years and even a show cause notice was issued to the assessee to which no evidence regarding actual existence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT; 81 ITR 400 (All) and CIT v. Sandersons Morgans; 75 ITR 433 (Cal). We are usefully quoting the relevant portion from the aforesaid decision of the Hon ble Apex Court in Karamchand Thapar Others; 222 ITR 112 :- In the instant case, the assessee collected the amounts of under-charges in advance even before any claim was lodged. He realised the amounts from the colliery company not because any demand was made against him but possibly in order to protect himself from the eventuality of any demand being made against him as the del credere agent of the seller. The second important feature is that there is no finding as in the case of Tattersall (1939) 7 ITR 316 (CA) that when the assessment was made, there was still an existing li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A), therefore, this ground of the Revenue is having no merit . 6. The last ground pertains to deleting the addition of the addition of Rs.1,12,000/ - u/s 40A(3) of the Act wherein i t was held that the cash payment was made as per the direct ions of the excise authorities. 6.1 The crux of arguments on behalf of the revenue is in support of the assessment order whereas the learned counsel for the assessee defended the impugned order. 6.2 We have considered the rival submissions and perused the material available on the record. The facts, in brief , are that the assessee made purchases of Rs.1,12,000/ - from other liquor contractors which was disallowed and added to the income by the Assessing Officer on the plea that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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