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TMI Blog2022 (5) TMI 1551X X X X Extracts X X X X X X X X Extracts X X X X ..... lity as mentioned u/s 41(1) of IT Act, 1961 which is applicable to the case of the assessee. 2. Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts of the case in deleting the addition of Rs.4,73,03,16/- made by the AO on account of fact that the assessee had failed to discharge its onus of proving its genuineness of the Sundry Creditors which were outstanding liabilities since many years." 3. When the appeal was called up for hearing, neither the assesseerespondent or his authorized representatives appeared nor any adjournment application has been filed. On perusal of the relevant appellate record, we are of the considered opinion that this appeal can be heard and disposed off in the absence of the assessee after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity due to financial crunches therefore, the same was existing since several years. It was also explained before the First Appellate Authority that the assessee has submitted PAN and other details pertaining to 33 creditors out of total 42 creditors and amount pertaining to these 33 creditors is approximate to 90% of total outstanding amount. It was also contended that the AO has not made any necessary inquiry by invoking either provision of section 133(6) of the Act or provision of section 131 of the Act. To examine and verify the amount of liabilities/creditors showing in the balance sheet and in the absence of such exercise, no addition can be made in the hands of the assessee u/s 41(1) of the Act as the appellant has not written of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y years as appellant has not written off in their books of account. It is held by Hon'ble Delhi High Court in the case of CIT Delhi Vs New World Synthetics Ltd. [2018] 97 taxmann.com 399 (Delhi) that Non-payment of outstanding liability which is admitted and acknowledged as due and payable by an assessee does not indicate remission or cessation of liability. 6.4. In the case of Smt. Sudha Loyalka Vs ITO [2018] 97 taxmann.com 303 (Delhi - Trib.), it is held by Hon'ble ITAT that "Section 41(1) of the Income-tax Act, 1961 - Remission or cessation of trading liability (Cessation of liability) - Assessment year 2012-13 - Whether in view of facts stated under heading 'Unexplained expenditure', impugned addition could not be sust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16/- u/s 41(1) is not sustainable and it is hereby deleted." 7. In view of the above conclusion of Ld.CIT(A) and after considering the stand of the AO for invoking the provision of section 41(1) of the Act and submissions of the assessee before the First Appellate Authority, we are of the considered view that undisputedly the liabilities were outstanding since many previous year in the balance sheet of the assessee and the assessee has not written off the outstanding liabilities/creditors in its audited books of accounts and thus, it has to be presumed that the impugned outstanding liabilities/creditors were existing at the end of the Financial Year 2012-13 pertaining to Assessment Year 2013-14. As per mandatory requirement of section 41(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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