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TMI Blog2015 (7) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks in the name of Shri Amir Mohammad (wrongly written as Amit Chand in this year). Ld. CIT(A)'s observation that appellant has written back liability in the name of Shri Amir Mohammad and created new liability in the name of Shri Amit Chand is a fig of imagination without any basis and without any evidence." 3. Briefly stated the facts giving rise to this appeal are that the assessee filed his return for AY 2007-08 on 31.07.2007, declaring an income of Rs. 68,780/- and the case was selected for scrutiny. After allowing due opportunity of hearing to the assessee, the AO held that neither any supporting documents relating to transaction held with Shri Amir Mohd nor any confirmations of the same have been filed till completion of assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is completely satisfied that the due amount will not be claimed by the relevant creditor Shri Amir Mohd or any other person then there was no question of presuming that the liability has ceased. Ld. counsel further took us through paper book of the assessee containing 12 pages and submitted that the assessee shown Shri Amir Mohd as creditor in the balance sheet write from FYs 2004-05 to 2006-07 which is relevant to assessment year under consideration 2007-08. Therefore, the authorities below were not correct and justified in holding that the liability has been ceased during the relevant financial period. The Ld. counsel further pointed out that this liability of Rs. 6,94,272/- was offered to tax by the assessee in AY 2013-14 and tax has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n AY 2013-14 and tax has been paid thereon. The Ld. DR fairly accepted that in the similar set and circumstances in the case of Shri Sunil Kumar Bhatia ITAT Delhi 'G'Bench in the order dated 11.10.2013 (Supra) has allowed the appeal of the assessee on the similar issue. 9. On careful consideration of above submission, at the very outset, we observe that the ITAT Delhi 'G'Bench in the case of Shri Sunil Kumar Bhatia (Supra) has held as under:- "3. At the time of hearing before us, it is stated by the learned counsel that the Assessing Officer made the addition of `7,94,592/- in respect of the liability shown by the assessee in the name of Shri Banarsi Lal S/o Shri Laxman Das in its balance sheet. He submitted that the liability is with reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the Assessing Officer rightly treated that the liability has already ceased. By writing of the liability in the FY 2012-13, the assessee himself has admitted the cessation of liability but the assessee is only trying to postpone the payment of tax on such liability. She, therefore, submitted that the order of learned CIT(A) should be sustained. 5. We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the arguments of both the sides and the facts of the case, it is evident that now the controversy is very narrow because it is the stand of both the parties that the liability has ceased. The only dispute is with regard to the year of cessation of liability. As per Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year. [Explanation 1.-For the purposes of this sub-section, the expression "loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessation of any liability by a unilateral act by the first mentioned person under clause (a) or the successor in business under clause (b) of that sub-section by way of writing off such liability in his accounts.] [Explanation 2].-For the purposes of this sub-section, "successor in bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2007-08. We, therefore, delete the addition of `7,94,592/- made by the Assessing Officer." 10. In view of above, we are inclined to hold that when the assessee has shown this liability as creditor in the previous assessment year in the name of Shri Amir Mohd then this inadvertent mistake in the entry of name cannot create any doubt about the existing liability of assessee during the relevant period under consideration. We further observe that in the similar set of facts and circumstances, the ITAT Delhi 'G'Bench has allowed appeal of Shri Sunil Kumar Bhatia by order dated 11.10.2013 (Supra) and the present case is squarely covered in favour of the assessee by this order. We may also point out that when the assessee has offered impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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