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TMI Blog2020 (9) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... essee obtains some benefit in respect of such trading liability etc. by way of remission or cessation thereof, the amount of benefit obtained by the assessee becomes income u/s. 41(1). It is evident that obtaining of any benefit by the assessee in the form remission or cessation is sine qua non for invoking section 41(1). If the liability continues to exist, the factum of delay in payment does not ipso facto requires addition u/s. 41(1). We are confronted with a situation in which the assessee categorically stated before the AO that all the creditors were genuinely payable and there were some transactions in their accounts as well. CIT(A) was justified in coming to the conclusion that addition was not called for u/s.41(1) of the Act p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xisting liability in respect of which addition was made by the AO, the assessee submitted that the AO wrongly invoked section 41(1) of the Act in respect of all the 45 creditors appearing in the books of account. It was also stated that periodical transactions were taking place on account of purchases and payments made through cheques in these accounts. The assessee also furnished confirmation of ledger extracts of sundry creditors. The ld. CIT(A) sent such additional evidence to the AO with a direction to submit a remand report. The AO objected to admission of the additional evidence vide his remand report dated 27-04-2015. He, however, admitted the assessee s point of view that all the expenses were disallowed and all the sundry creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the ld. CIT(A) confirmed the addition in respect of that account amounting to ₹ 2,22,400/-. The assessee is not in appeal against the confirmation of additions by the ld. CIT(A) in respect of both the parties to the extent noted above. Except for these two parties, the AO, in the remand proceedings, did not point out any inconsistency calling for the applicability of section 41(1) of the Act. This section, in turn, states that where an allowance or deduction has been made in the assessment for any year in respect of loss or expenditure or trading liability incurred by the assessee and subsequently the assessee obtains some benefit in respect of such trading liability etc. by way of remission or cessation thereof, the amount of benef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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