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TMI Blog2022 (3) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) erred in deleting the addition of Rs. 251,24,000/- made on account of cessation of liability for purchase of immovable property, when in fact the payment of liability was not proved and established. 2. Whether an the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 251,24,000/- made on account of cessation of liability for purchase of immovable property, without considering the fact that in immovable property purchase the consideration is required to be paid as per registered deed, which is a legal document and the said payments were not evident in the case of assessee. 3. Whether on the facts and in circumstances of the case and in law, the Ld CIT(A) erred in consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer making an addition of Rs. 2,51,24,000/- on account of cessation of liability under section 41(1) of the Act and total income of the assessee was assessed at Rs. 2,52,71,640/-. 04. The assessee preferred the appeal before the learned CIT(A), who deleted the addition , therefore, the learned Assessing Officer is in appeal before us. 05. The brief facts of the case shows that during the year under consideration as per agreement dated 02.05.2014, assessee has purchased non-agricultural land at Karjat, Raigad for Rs. 2,61,24,000/- from M/s Tanya Infrastructure Pvt. Ltd. This agreement was registered with the Sub- registrar Karjat. The learned Assessing Officer examined the agreement. The Assessing Officer stated that assessee has purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above sum. Ld AO also issued one notice under section 133 (6) of the Act to M/s Tania Infrastructure Pvt. Ltd. That party submitted a confirmation stating that it has sold the property and also enclosed the copy of registered sale deed dated 02.05.2014. In view of this, the Assessing Officer noted that it is very unusual that seller has sold the property for Rs. 2,61,24,000/- but has received only Rs. 10 lacs towards the consideration. Therefore, he held that there is no liability on part of the assessee to pay the above amount and therefore, applying with provision of Section 41(1) of the Act made the above addition of Rs. 2,51,24,000/- on account of cessation of liability. Alternatively, he also held that the assessee company has made th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be received for the form of land from the assessee to M/s Tania Infrastructure Pvt. Ltd., however, no documents were submitted. The learned CIT(A) based on the above remand report held that there is no cessation of liability under section 41(1) of the Act accordingly, the impugned addition was deleted. 07. The learned Departmental Representative submitted that assessee has purchased the property and consideration was also shown by the seller amounting to Rs. 2,51,24,000/- as received and still in the balance sheet of the assessee a sum of Rs. 2,51,24,000/- is outstanding as creditor, clearly shows that this payment is made by the assessee from its unaccounted income. He further submitted that as nobody would sale property by keeping so muc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the parties that assessee will transfer peaceful possession of 79.9 gunthas held by assessee company at Varasoli, Alibaug to the seller equivalent to the dues of the creditor. He further stated that admittedly, the above transfer did not happen and therefore, the amount is shown as outstanding. He further stated at the time of the purchase of the property only these cheques were handed over to the buyer and the cheque of only Rs. 10 lacs were encashed and the balance cheques were never encahsed which is also confirmed by the bank statement as well as the seller of the property. Therefore, there is no question of any payment made to the buyer as unaccounted income of the assessee or the cessation of liability under section 41(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is required to pay Rs. 2,51,24,000/- to M/s Tania Infrastructure Pvt. Ltd. and therefore, the liability exists in the books of account of the assessee. Similar amount is shown to be receivable by Tania Infrastructure Pvt. Ltd. from the assessee. In view of this it is apparent that both the parties confirmed outstanding amount. Therefore, Seller has confirmed the amount receivable and the buyer has also accepted its liability for payment of the above sum. Further for the applicability of the provisions of section 41(1) of the Act there is no benefit arising in favour of the assessee. It is merely an outstanding payable to Sundry Creditors for purchase of stock in trade. On looking at the balance sheet of the assessee, it is also se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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