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TMI Blog2013 (5) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... g the provisions of section 41(1) of the Income-tax Act, 1961. The Ld. AO did not appreciate that the provisions of section 41(1) of the Act, are not at all applicable in this case. Similarly, the Ld. CIT(A) has grossly erred in confirming the order of the AO. That the authorities bellow did not appreciate that this case does not fall within the mischief of section 41(1) and as such the addition made may be deleted. 3. That the authorities below did not appreciate that the disallowance/addition made u/s 41(1) of the Act, comprises of the following trade creditors: i) Haszi Nassar Ullah, Zaheer, Afghanistan ii) Hazi Yarr Mohd -do- iii) Hazi Noor Mohd., iv) Bismillah, Afghanistan v) Durga Cold Store (allegedly Burnt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years and are stagnant creditors without any transaction. With regard to the confirmation filed by the assessee, there was no corroborative postal or courrier envelop to support the genuineness of the creditors. The said creditors are as under: i) Haszi Nassar Ullah, Zaheer, Afghanistan Rs.697840/- ii) Hazi Yarr Mohd -do- Rs.550464/- iii) Hazi Noor Mohd., Rs.143336/- iv) Bismillah, Afghanistan Rs.288115/- vi) Durga Cold Store (allegedly Burnt to ashes) ₹ 51240/- ------------- ₹ 1730995/- --------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extinguish the debt but it would only prevent the creditor from enforcing debt. But it will enable the debtor to say that liability has come to an end. There is nothing on record brought by any of the authorities below that any benefit in respect of such trading liability has been obtained by way of remission or cessation thereof during the impugned order. Therefore, in the facts and circumstances of the case, section 41 cannot be made applicable. Our views find support from the decision of the Hon ble Punjab Haryana High Court in the case of Commissioner of Income Tax vs. Smt. Sita Devi Juneja reported in (2010) 325 ITR 593. The Head Note of the same is reproduced for the sake of clarity as under: For the assessment year 2004-05, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion or cessation under section 41(1) of the Act and allow the relief to the assessee. Thus, grounds No. 2 3 of the assessee are allowed. 8. As regards ground No.4, the assessee has incurred traveling expenditure amounting to ₹ 1,62,087/- being foreign traveling expenditure. The assessee could not prove that the expenses have been incurred in connection with the business of party decorations and accordingly the same were disallowed. 8.1. The action of the Assessing Officer was confirmed by the Ld. CIT(A). 8.2. It was brought to our notice by the ld. counsel for the assessee, Mr. P.N.Arora, Advocate that vide assessee s letter dated 25.10.2012 available at PB 1 2, the assessee has submitted details of the foreign travel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed by the Ld. CIT(A) is excessive. In the facts and circumstances of the case and our findings hereinabove, we direct the A.O. to allow 75% of the expenditure claimed and disallow the remaining amount. We order accordingly. Thus, ground No.4 of the assessee is partly allowed. 10. As regards ground No.5, the AO made disallowance of 1/5th expenses out of Telephone, Car depreciation Car expenses amounting to ₹ 22,359/- being on account of personal and non-business element and in the absence of any evidence for incurring expenditure for the purposes of business, the ld. CIT(A) confirmed the action of the Assessing Officer. 11. We have heard the rival contentions and perused the facts of the case. There is nothing on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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