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TMI Blog2024 (7) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... ies nor any reminders from the creditors seeking payment of the amounts due. The details of the litigation or any Court case have not been brought before us. As per CIT(A) that the liabilities brought forward from earlier years, hence, the provisions of Section 68 are not applicable is not emanating from the record. To that extent, the ld. CIT(A) erred in adjudicating on the Section which is not a subject matter of AO - Hence, matter should go back to the AO for due verification as to the existence of the parties, writing of these liabilities as bad debts in their books or not and to afford an opportunity to the assessee to file the confirmations and the relevant details before the Assessing Officer. The appeal of the Revenue on this ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,82,411/- as assessee failed to file details/confirmation during assessment proceedings. 3. The Assessing Officer made addition on account of reduction of long term liabilities, short term borrowing, trade payables and other current liabilities of Rs. 1,05,69,471/-. The Assessing Officer held that there was remission in the trading liabilities and hence the same is taxable u/s 41(1). The ld. CIT(A) deleted the addition after examining the facts and concluded that there was no cessation of liabilities during the year as assumed by the ld. CIT(A) but it was discharged the liabilities against the trade receivables. The ld. DR relied on the order of the Tribunal in the case Bharat Dana Bera Vs. ITO (56 Taxmann 388). The ld. AR relied on the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er years. Any reduction in such trade receivable even as per Assessing Officer's allegation without being any payment received will be eligible as a deduction on account of amount written off as bad debt. Thus, by no stretch of imagination such reduction in trade receivable can be considered as income of the assessee. Accordingly, this addition is directed to be deleted. The alternative contention of the AR is also justified that in case it is being assumed by the Assessing Officer that there has been a cessation of liability to the extent of reduction in liabilities/creditors during the year and the same is income under section 41(1) then there is a corresponding reduction in trade receivable which will be allowable deduction as bad de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or (b) the successor in business has obtained, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first-mentioned perso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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