9911796707
TMI Blog2012 (7) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... he total income for A.Y. 2007-08 should be deleted." 2. At the outset, we may state that the amount stated in the ground of appeal is not factually correct and the amount added by the AO on account of cessation of liability u/s.41(1) is ₹ 2,08,17,130, the addition of which has been confirmed by ld CIT(A) u/s.28(iv) of the Act. Therefore, the amount mentioned in the ground of appeal is not factually correct. 3. The relevant facts giving rise to this appeal are that assessee is a company and is engaged in the business of trading in shares in assessment year under consideration. The assessee filed the return of income declaring loss of ₹ 1,18,524. The AO has made the assessment u/s.143(3) of the Act vide order dated 31.12.2009 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amount is brought in as advance as against export and assessee has still not decided as to what is to be exported. Neither does the assessee have the liquidity to make any export. Further, MHL, Geneva, Switzerland is a sister concern and the facts suggest that the export was never intended as the assessee has still not arrived at a suitable goods to be exported. The assessee has also not made any effort to return the money. The assessee's application to RBI states that the directors will infuse funds, has also not happened. Considering the above facts, AO has stated that the unclaimed credit balance even after a period of 10 years has not been transferred by the company to its profit and loss account despite the fact that it has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... US$ 3,81,000 equivalent to ₹ 1,36,51,130 as advance against export. He submitted that export could not be made and the liability continues in the books of account of the assessee till date. Ld A.R. referred page 5 of PB which is schedule -7 of the balance sheet for A.Y under consideration and submitted that the sum of ₹ 2,08,17,030 is shown under the head "advance against export to MHL". He submitted that the liability is continued in the books of account of the assessee and the same has not been written off. Therefore, it cannot be added as income of the assessee u/s.41(1) of the Act or u/s.28(iv) of the Act as it does not become the money of the assessee because of efflux of time. Ld A.R. submitted that MHL vide its letter da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee received a sum of ₹ 2,08,17,130 in the assessment year 1997-98 towards exports to MHL, Geneva, Switzerland. It is also a fact that assessee neither has made exports against the said advance received nor the amount has been returned till date. Moreover, assessee has stopped export business and is dealing only in the business of trading in shares. On the other hand, the said amount is shown as advance in the balance sheet. Therefore, the liability has been acknowledged. The said amount has not been written off by the assessee from its balance sheet. Accordingly, it cannot be said that the liability has ceased to exist. Hon'ble Madras High Court has held in the case of Commissioner of Income-tax v. Tamilnadu Warehousing Corporation, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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