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TMI Blog2015 (9) TMI 1661X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration. It is undoubtedly a curious case. Even the liability itself seems under serious doubt. AO undertook the exercise to verify the records of the so called creditors. Many of them were not found at all in the given address except in the case of Narayan Chandra Gorai and M/s. Stesalit Limited. These inquiries were made ex parte and in that view of the matter, the assessee would be allowed to contest such findings. Nevertheless, even if such facts were established through bi-parte inquiries, the liability as it stands perhaps holds that there was no cessation or remission of liability and that, therefore, the amount in question cannot be added back as a deemed income under section 41(1) - no alternative except to delete the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editors shown by the assessee, notices/letters u/s. 133(6) of the Act were issued by the AO. In all the cases the notices received back unserved with the postal remark not known except in the case of Narayan Chandra Gorai, he confirmed Nil balance in the name of the assessee. The assessee was asked to give present whereabouts of the creditors or to produce them for verification but even after allowing opportunity to the assessee to get verified the same, they chose not to comply with the AO s notices. In such circumstances, the assessee was allowed an opportunity to show cause as to why the entire amount of ₹ 5,11,700/- out of declared sundry creditors as liability to the tune of ₹ 6,71,700/-, which remained unverifiable will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT. 4. I have heard rival submissions and gone through facts and circumstances of the case. I find from the above facts that these are trade creditors admittedly coming from earlier years being opening balance. I also find from the record that the assessee has not written-off the liability or liability has not ceased or remitted. In such circumstances, now I have to go to the provisions of section 41(1) of the Act and see the legal position. Section 41 (1) of the Act would apply in a case where there has been remission or cessation of liability during the year under consideration subject to the conditions contained in the statute being fulfilled. Additionally, such cessation or remission has to be during the previous year relev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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