9911796707
TMI Blog2023 (1) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 143(3) of the Income Tax Act is illegal and bad in law. 2. That on the facts and circumstances of the case and the provision of the law the Ld. CIT(A) has failed to appreciate that the assessment order passed is in violation of principle of natural justice and hence, the said assessment order is bad in eyes of law and liable to be quashed. 3. That the Ld. CIT(A) has failed to appreciate that the Ld. AO has erred in ignoring the explanation given, evidences and material placed and available on record. The same have not been properly considered and judicially interpreted and the same do not justify the addition made with preset mind of the Ld. AO. 4. That on the facts and circumstances of the case and the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmations, the AO has made the addition of Rs. 25,39,190/- u/s. 41(1). The pertinent fact was that upto 09.01.2007 this firm was the proprietorship firm of Smt. Dayawanti. On 09.01.2007 Smt. Dayawanti expired and as per her will capital outstanding in her account was transferred to the capital A/c of Smt. Sunita Gupta and the firm was made partnership firm with two partners being Smt. Sunita Gupta and Sh. Anoop Gupta. 6. Copies of the balance sheet as on 31.03.2007 along with relevant annexure and copy of balance sheet as on 31.03.2010 with annexures and copy of will deed executed by Late Smt. Dayawanti Devi was also submitted before the AO. 7. Further, it is submitted that while making assessment for A.Y. 2000-01, addition of same amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed its intention not to honor the liability even when demanded. The ld. AR relied on the order in the case of ACIT vs. M/s. Milroc Good Earth Property and Developers LLP, by ITAT, Panaji Bench wherein it was held that it is only where the assessee during any previous year has obtained some benefit in respect of such trading liability by way of remission or cessation thereof, the value of benefit accruing to him shall be deemed to be profit and gain of business or profession and accordingly chargeable to income tax as income of that previous year. It was argued that in the present case the AO has not brought anything on record that the amount payable to above said creditors has ceased during the year under consideration itself. So, when th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred by the first-mentioned person or some benefit in respect of the trading liability referred to in clause (a) by way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year. Explanation 1.-For the purposes of this sub-section, the expression "loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessation of any liability by a unilateral act by the first-mentioned person under clause (a) or the successo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be held to be valid argument that such proposition would be devoid of any logic and revenue cannot be expected to wait for indefinite period to receive their dues as taxes with folded hands. There was no iota of proof to demonstrate that the amounts have liable to be paid in the instant year or in the near future. The conduct of both the parties clearly demonstrates the remission of the amounts. The amounts which were hitherto remained unpaid for more than a decade cannot be treated as an existing liability. Hence, the action of the revenue authorities subjecting that amount u/s. 41(1) cannot be faulted with. The appeal of the assessee on this ground is dismissed. Ground No. 5: Advances Received 15. As on 31.03.2016, there was credit bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of the hearing before the AO, confirmed copy of the statement of account pertaining to F.Y. 2013-14, 2014-15, and 2015-16 was filed before the AO. The Assessing Officer has made the addition of the above said amount holding that the same balance is outstanding since 01.04.2014. 21. Further during the course of hearing, it was submitted that there is no truth in the contention of AO that as on 31.03.2016 same balance was outstanding which was as on 31.03.2014. In fact during F.Y. 2015-16 the assessee has made payment of Rs. 20,00,000/- against opening balance of Rs. 37,20,000/-. 22. The statement of account of M/s. Swastika Enterprises for F.Y. 2013-14, 2014-15 and 2015-16 duly confirmed along with PAN was filed. And jus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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