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TMI Blog2015 (10) TMI 1479X X X X Extracts X X X X X X X X Extracts X X X X ..... of the liability in question during the year under consideration. The Hon'ble Gujarat High Court in the case of CIT Vs. Ravjibhai Becharbhai Dhameliya, (2013 (7) TMI 292 - GUJARAT HIGH COURT) has held that in the absence of material to show that there was a remission or cessation of liability as contemplated under section 41(1) of the Act as well as in the absence of material to indicate deriving of any benefit in cash or otherwise by the assessee section 41 is not applicable. In the above facts of the case, in our considered view, the addition made by invoking the provision of section 41(1) of the Act is not sustainable. We, therefore, delete the addition - Decided in favour of assessee. Addition made u/s.68 - Held that:- We find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case are that the AO found that as on 31.3.2004 ₹ 40,000/- was outstanding as payable to Ahmedabad Stock Exchange. In reply to the show cause notice, the assessee submitted that the assessee-company was facing a huge financial crisis, as it had incurred huge loss for past several years, and therefore, the assessee was unable to pay the amount. It was also submitted that there was no cessation of liability and there was no remission granted to the assessee and the company intended to honour the liability. However, the AO held that there was cessation of liability and made addition of ₹ 40,000/- under section 41(1) of the Act. 4. On appeal, the CIT(A) observed that the amount was outstanding to Ahmedabad Stock Excha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught any material on record to show that the assessee was allowed deduction in respect of liability in question, and if it was allowed then in which year. Further, it is observed that the Revenue has admitted that the amount in question was shown as liability by the assessee in its balance sheet of the year under consideration. We find that no material has been brought on record to show that the liability in question ceased to exist during the year under consideration or any benefit was derived by the assessee in respect of the liability in question during the year under consideration. The Hon'ble Gujarat High Court in the case of CIT Vs. Ravjibhai Becharbhai Dhameliya, (2013) 354 ITR 533 (Guj) has held that in the absence of material t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 10,20,000/- were relatives of the Managing Director. In every case, the payment has been made in cash. In the case of the share applicants, not a single one was without a bank account. It was, therefore, surprising that despite maintaining bank account, each one of the share applicants chose to pay the application money by way of cash. Further, copies of bank account could not be furnished in spite of specific requests for doing so, and therefore, he was of the opinion that the identity and financial capacity of the applicants may not be in doubt, but the onus cast upon the assessee to establish the genuineness of the transaction has not been discharged. He, therefore, confirmed the addition of ₹ 10,20,000/-. 15. Befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. Before these additional evidences are accepted, in our considered view, it is in the interest of justice that the AO examine the same. The AR of the assessee submitted that the issue, therefore, be restored to the file of AO for examination of additional evidences now filed by the assessee. In the circumstances, it shall be in the interest of justice to restore the issue back to the file of the AO for adjudication afresh after proper verification. The assessee is also directed to cooperate with the AO and file all the materials, which it wishes to rely upon before the AO, as and when called upon by the AO. We order accordingly. Thus, this ground of appeal of the assessee is allowed for statistical purpose. 18. In the result, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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