9911796707
TMI Blog2017 (12) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... wholly justified in holding that it cannot be said that the liability has ceased and deleting the addition ADMIT. The following substantial questions of law arise for consideration. (1) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in deleting the addition of 23,04,369/- by considering the same to be service tax? (2) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in deleting the addition of 53,600/- made under section 40(a)(ia) of the Income Tax Act, 1961? (3) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in deleting the addition of Rs,1,95,250/- on account of add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on verification of ledger accounts of the respondent-assessee noticed certain persons appearing as sundry creditors and found that the balances were pending for long. The total amount of such balances came to ₹ 33,85,907/-. The Assessing Officer was of the opinion that no party would wait indefinitely, especially when a substantial amount was due and accordingly added the amount to the income of the assessee for the year under consideration under section 41(1) of the Income Tax Act. The assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals), who confirmed the order passed by the Assessing Officer. The assessee carried the matter in further appeal before the Tribunal, which held that section 41(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r not; Explanation 1 thereto provides that for the purposes of the 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. Therefore, to attract the provisions of sub-section (1) of section 41 of the Act, the revenue has to either show that such liability has in fact ceased to exist or that the assessee has written off such liability in his accounts. In the facts of the present case the assessee continues to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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