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TMI Blog2018 (6) TMI 1611X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of such creditors can be taken as either having been remitted or no longer in existence. This approach was not correct in law and the CIT(Appeals) has rightly deleted the addition on the basis that there should be evidence to show either remission of liability or cessation of liability and in the absence of such evidence, no addition can be made u/s. 41(1). It is no doubt true that the assessee filed evidence before the CIT(Appeals) to show some payments were made even in respect of some of the outstanding creditors during the previous year whose liability was considered as income u/s. 41(1) by the AO. CIT(Appeals) has, however, not deleted the addition on the basis of any additional evidence. The grievance projected by the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bharath Blue Metals Sale of Jelly 14,59,747 c. B.T. Nagaraj Stone Crusher Works 52,44,166 d. Bharath Cements Products Cement Blocks 28,00,000 e. B.T.N. Transports 34,64,751 Total 2,52,71,577 3. The AO was of the view that wherever there were payments made to the creditors dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of which loss or expenditure was incurred by the first-mentioned person or some benefit in respect of the trading liability referred to in clause (a) by way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year. Explanation 1 .- For the purposes of this 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the CIT(A). The CIT(A) has, however, deleted the addition not on the basis that even during the previous year payments were made by the assessee. He deleted the addition made by the AO on the ground that there was no material evidence to show that liability of the assessee in respect of the aforesaid creditors was either remitted or ceased to exist. The following were the conclusions of the CIT(Appeals):- Having considered the details furnished and the Written submissions made by the Assessee and the after hearing the arguments of the AR I am of the opinion that the decision of the Hon'ble Supreme Court in the case of CIT v/s. Sugali Sugar Works Pvt Ltd., (1999) 236 ITR 518 (SC) followed by the Juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case, the Ld CIT (A) has failed to appreciate that by not giving opportunity to the AO has violated the provision of Rule 46A of the I T Rule. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT (A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 5. The appellant craves leave to add, alter, amend and / or delete any of the grounds that may be urged. 7. The ld. DR relied on the order of the AO and reiterated the stand of the revenue as reflected in the grounds of appeal before the Tribunal. 8. The ld. Counsel for the assessee sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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