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TMI Blog2021 (2) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) has deleted the addition holding that the opening and closing balance of the sundry creditors remain intact through of the years - HELD THAT:- We notice that the AO made the disallowance in question holding that the assessee had made payments in cash to 24 parties. However, the Ld. CIT (A) noted that the opening balance of most of the parties remained unchanged as on 01.04.2012 and 31.03.2013, which shows that no payments were made by the assessee. Hence, we do not find any infirmity in the order of the Ld. CIT(A). We accordingly uphold the findings of the Ld. CIT (A) and dismiss this ground of appeal of the revenue. - ITA No. 7442/MUM/2018 - - - Dated:- 7-12-2020 - Shri Shamim Yahya (AM) And Shri Ram Lal Negi (JM) For the Assessee : Ms. Dinkle Hariya For the Revenue : Shri Rakesh Ranjan (DR) ORDER PER RAM LAL NEGI, JM This appeal has been filed by the revenue against the order dated 27.09.2018 passed by the Commissioner of Income Tax (Appeals)-36 (for short the CIT(A), Mumbai, for the assessment year 2013-14, whereby the Ld. CIT(A) has partly allowed the appeal filed by the assessee, against the assessment order passed u/s 143 (3) of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of the Act. The Ld. Departmental Representative (DR) submitted before us that the Ld. CIT (A) has erred in deleting the addition in question without appreciating the fact that the assessee has not brought anything on record to show that the creditors have been following up for payments due to them. The Ld. DR further submitted that the Ld. CIT (A) has failed to refer the additional evidence produced by the assessee under Rule 46A of the Income Tax Rules, to AO for verification. The Ld. DR further pointed out that in some of the cases, the creditors have filed civil suits for recovery against the assessee, however, the assessee failed to produce documentary evidence before the AO. Since, the documents were produced before the CIT (A) under rule 46A of the Income Tax Rules, the Ld. CIT (A) ought to have forwarded the same to the AO for verification of the additional evidence placed on record. The Ld. DR accordingly submitted that the order passed by the Ld. CIT(A) may be set aside and the findings of the AO may be restored. 5. On the other hand, the Ld. counsel for the assessee supporting on the order passed by the Ld. CIT (A), submitted that since the AO had passed the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a conclusion that the debt was barred and had become unenforceable. There may be circumstances which may enable the creditor to come with a proceeding for enforcement of the debt even after expiry of the normal period of limitation as provided in the Limitation Act. The principle that expiry of period of limitation prescribed under the Limitation Act cannot extinguish the debt but it will only prevent the creditor from enforcing the debt is well-settled. Mere entry in the books of account of the debtor made unilaterally without any act on the part of the creditor would not enable the debtor to say that the liability had come to an end. Apart from that that would not by itself confer any benefit on the debtor as contemplated by the section. Therefore, the High Court was right in holding that the assessee 's unilateral entry in the accounts transferring the amount to the capital reserve account would not bring the, matter within the scope of section 41. 4.2.3 The Ld. AR stated that in spite of submitting the details of the payments made to the sundry creditors as appearing in the books as on 31st March 2013 along with details of payments being made to the sundr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to be bogus or that the liability payable by the appellant to the sundry creditors has been extinguish. Hence, the disallowance made of ₹ 1,88,96,549/- u/s. 41(1) is against the provisions of law and is therefore deleted. The ground of appeal no.2 is Allowed. 7. The Ld. CIT (A) has considered the plea of the assessee that since it had furnished the details of payments made to the sundry creditors appearing in the books as on 31st March, 2013, the AO should have issued notices u/s 133 (6) and called the details of the outstanding balances. Further, the Ld. CIT (A) has pointed out that seven creditors have filed suits for recovery against the assessee. Further, the Ld. CIT (A) has relied on the judgment of the Hon ble Supreme Court in the case of CIT vs. Sugauli Sugar Works Pvt. Ltd. 236 ITR (SC) , Hence, in our considered view, the findings of the Ld. CIT (A) are based on the evidence on record and in accordance with the settled principles of law. We therefore do not find any infirmity in said order to interfere with. Accordingly, we dismiss this ground of appeal of the revenue. 8. Vide Ground No. 3, the revenue has challenged the action of the Ld CIT (A) in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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