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TMI Blog2021 (8) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Assessing officer. The Ld.AR of the assessee submitted that the sundry creditors are not disputed nor fictitious and the Ld.CIT(A) has considered the overall facts and relied on the judicial decisions and granted relief to the assessee. We find that the CIT(A) has passed an elaborate order covering various facts, system of accounting, provisions of law and the judicial decisions and passed a reasoned order. Accordingly, we do not find any infirmity in the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue - ITA No. 3577/Mum/2019 - - - Dated:- 13-7-2021 - Shri S Rifaur Rahman, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Shri T.S. Khalsa, Sr. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether on the facts and circumstances of the case and in Law, the CIT(A) was justified in directing the Assessing Officer to delete the addition made by the Assessing Officer under section 41(1) amounting to ₹ 5,46,13,189/-, without appreciating the fact that the though for name sake the assessee has written back the creditors in the books but has also written off equivalent amount in the books in AY 2016-17 thereby NULLIFYING the amounts written off and written back ? 5 Whether on the facts and circumstances of the case and in Law, the CIT(A) was justified in directing the Assessing Officer to delete the addition made by the Assessing Officer under section 41(1) amounting to ₹ 5,46,13,189/-, relying on the affidavit f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from time to time and furnished the details and the case was discussed. The A.O on perusal of the financial statements found that the assessee has substantial sundry creditors outstanding (trade payables) of ₹ 16,50,48,724/-. The A.O. has issued notice u/s 142(1) of the Act to furnish the information of sundry creditors i.e name, address, PAN of the parties along with copies of ledger account with details. Whereas, the assesse in compliance to the notice has furnished the details on 03.10.2017. The A.O. on perusal of the information submitted found that the liabilities are outstanding in the balance sheet for more than 3 years i.e between 6 to 11 years and consists of (i) Sundry Creditors Trade payables (ii) Expenses Payable and (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denial of outstanding balances by some of the parties and the A.O. has invoked the provisions of Sec. 41(1) of the Act and made addition of cessation of liability of ₹ 3,52,67,860/- and after setoff of brought forward business losses and unabsorbed depreciation, the A.O. has determined the total income of ₹ 3,32,76,750/- and passed order u/s 143(3) of the Act dated 26.12.2017. Subsequently the A.O. found omission of certain amount in calculation of cessation of liability u/sec41(1) of the Act and issued notice U/sec154 of the Act to the assessee proposing to rectify the mistake apparent from record and the assessee has agreed for the proposition. The A.O. calculated the correct amount of addition of cessation of liability U/sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents with the paper book and synopsis and prayed for dismissal of the Revenue appeal. 8. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue being addition of sundry creditors payable including expenses outstanding by the assessing officer under sec41(1) of the Act on cessation of liability. The contentions of the Ld. DR that the CIT(A) has erred in granting the relief to the assessee overlooking the facts that the notice u/sec133(6) of the Act issued by the assessing officer was returned unserved and the parties have not filed confirmation of outstanding balances and also few parties have denied having made any transaction with the assessee. We on perusal of the assessment order at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould altogether be a bogus and might not have existed at all except on paper. There can be many such possibilities. A field visits by inspector might have been able to throw much light on the same. However, the AO has wound up by only issuing notices u/s 133(6) without taking it to its logical conclusion. The right step should have been to take each of these proceedings to its logical conclusion either by passing a penalty order or by taking other suitable measures under the Act. He should also have confronted the appellant on the issue of non-compliance of notices issued by him u/s 133(6). Then he should have recorded the statement of the appellants as well. A finding from the books of accounts and the bank statement of the appellant could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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