2012 (8) TMI 1033

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..... Appeals) on 12.04.2011 in relation to the assessment year 2007-2008. 2. The only issue raised in this appeal is against reducing the addition from ₹ 28.30 lakh made by the Assessing Officer u/s 41(1) of the Act to ₹ 6.14 lakh. Briefly stated the facts of the case are that the assessee had shown sundry creditors at ₹ 60,99,168. The Assessing Officer observed that there was fr .....

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..... himself claimed that the creditors had overcharged which suggested the purchases to the extent of dispute were not required to be repaid. It was further observed that during the year the assessee made total purchases to the tune of ₹ 61,41,240, and in that sense the addition could have been confirmed only in relation to sundry creditors to that extent. Considering the over all facts and circ .....

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..... hus shows that the total creditors appearing at the end of the year are less than the total purchases made by the assessee during the current year. In such circumstances no addition u/s 41(1) can be made unless it becomes apparent that the amount shown as creditor ceased to exist. As the learned CIT(A) has restricted the addition to ₹ 6.14 lakh and there is no corresponding appeal filed by t .....

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