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TMI Blog2011 (4) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal by the assessee is directed against the order dated 9.12.2009 of CIT(A) for the assessment year 2006-07. The assessee in this appeal has raised disputes on two different grounds. 2. The first dispute is regarding addition of ₹ 26,20,274/- under section 41(1) of the Income-tax Act on account of cessation of liability. The AO noted that there was outstanding credit balance of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es had been incurred by the assessee and that the liability was not a trading liability. It was also observed by him that amount had to be taxed either under section 41(1) or under section 28(iv). Accordingly he added the sum of ₹ 26,20,274/- to the total income of the assessee. 2.1 In appeal the assessee submitted that the AO was not justified in adding the amount either under section 41(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more work had been done and the company would owed the appellant a sum of ₹ 55,99,794/-. He therefore held that the provisions of section 41(1) were applicable and the addition was justified. He also held that the provisions of section 28(iv) were not applicable. Aggrieved by the decision of the CIT(A), the assessee is in appeal before the tribunal. 2.2 Before us the Learned AR for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the assessee cannot be accepted that the amount outstanding since financial year 2000-01 was not a trading liability. The provisions of section 41(1) are thus applicable. However the burden for proving that the liability had ceased to exist during the year is on the revenue. This view is supported by the decision of the tribunal in case of DCIT Vs Bhagwandas Shoberlal Jain (60 ITD 118) whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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