| |
The Tax PublishersITA No. 222/Ran/2019 & Cross Objection No. 12/Ran/2019
2020 TaxPub(DT) 5456 (Ranchi-Trib)INCOME TAX ACT, 1961
Section 41(1)
Once AO had allowed assessee's corresponding material purchases claim in revenue account as a regular head of expenditure, the same very amount could not have been added as a bogus sundry creditor liability under section 41(1). More so, when there was no indication about any cessation or remission of liability.
|
Business income under section 41(1) - Remission or cessation of trading liability - Addition of liability towards sundry creditors treated as bogus - Corresponding material purchases claim stood allowed by AO
AO treated assessee's sundry creditors liability as bogus and made addition under section 41(1). Held: Once AO had allowed assessee's corresponding material purchases claim in revenue account as a regular head of expenditure, the same very amount could not have been added as a bogus sundry creditor liability under section 41(1). More so, when there was no indication about any cessation or remission of liability.
Relied:Smt. B. Jayalakshmi v. Jt.CIT (2018) 90 Taxmann.com 480 (Mad-HC) : 2018 TaxPub(DT) 4908 (Mad-HC) and ITO Ward 12(1), Kolkata v. Standard Leather (P) Ltd. ITA No. 2620/Kol/2013 decided on 7-9-2016 : 2016 TaxPub(DT) 5060 (Kol-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, RANCHI BENCH
 SUBSCRIBE FOR FULL CONTENT
|