Case Law Details
Brief of the case
Assesse was a dealer of bakery products, filed its return. During assessment, it was found that assesse represented certain amount towards sundry creditors in its books. A.O. treated sundry creditors to tune of Rs. 65 lacs, as non-existent, and therefore added back to assesse’s income . CIT(A) upheld AO’s order. Assesse challenged said order before tribunal, on ground that neither order of A.O. , nor order of CIT (A), was clear as to whether addition was being made under Section 68 or Section 41(1). Tribunal held that since credit entries do not relate to previous year relevant to assessment year , same could not be brought to tax u/s 68. Similarly, there was nothing on record to show any cessation or remission of liability by creditor, or any unilateral act by assesse in regard to invoke provisions of Section 41(1). Thus, impugned addition was to be deleted.
There was a delay of 465 days for filing appeal before Tribunal. Assesse submitted that order of CIT(A)was received by his CA, who handed over it to his assistant , to deliver said order to assesse. However, assistant of assesse’s CA did not deliver said order .Revenue countered assesse’s submission by contending that they had issued a notice to assesse for penalty under section 271 (1) (c) and through said notice , assesse would have known fate of his appeal. Assesse raised a plea that since said letter/notice was with reference to penalty proceeding, he did not notice contents of same. Tribunal accepted assesse’s plea . It further held that by delaying proceedings assesse would not gain anything , nor there was prejudice to revenue by correct determination of tax liability .Thus, delay in filing appeal was condoned.
Issue 1- Addition Under Section 68 /41(1)
Facts of the case
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