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No addition u/s 41(1) merely because some liabilities are outstanding at year end
Case Law Details
- Case Name
- Shri Ahmedabad Flexible Tube Mfg. & Yarn Proc. Co. P. Ltd. Vs. ITO (ITAT Ahmedabad)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2008- 2009
- Courts
- All ITAT, ITAT Ahmedabad
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Liabilities are still outstanding in the balance sheet as on the last date of relevant accounting period in the statement of account submitted with the department. There is no material on record to prove that the said liabilities have ceased to exist.
The assessee has not written off the said outstanding liability in its books of accounts. In these facts of the case, I hold that the ratio of the decision of the Hon’ble jurisdictional high Court in the case of CIT Vs. Nitin S. Garg (supra) applies to the facts of the case of the assessee, and respectfully following the decision of the Hon’b...
The ITAT Bombay in the case of Shelesh D Shah vs ITO held that the assessee was unable to give the addresses and labour bills of the labourers and also failed to prove the genuineness of the liability hence tribunal decided the case in favour of the department and held that Liability outstanding for long period of time is assessable as income (despite no write-back in A/cs)u/s 41(1) of the Income Tax Act.
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH “E”, MUMBAI
BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND
SHRI SANJAY GARG, JUDICIAL MEMBER
ITA No.7012/M/10
Assessment Year:2007-08 I case of D Satish Shah is totally opposite to the case law mentioned above.