Case Law Details
Green Star Corporation Vs ACIT (ITAT Kolkata)
1. AO made the addition of all outstanding liabilities except in the case of commission expenses, where both outstanding as well as current year expenses were added as income.
2. Such additions of outstanding liabilities can be made only u/s. 41(1) of the Act. This section can be invoked only when there is either cessation or remission of the liabilities.
3. It is not the case of the ld. AO or the Ld. CIT(A) that there is cessation of liability in question. It is true that on a perusal of the nature of the expenses, our conclusion is that there cannot be outstanding for these many number of years. This indicates that these expenditure is not genuine. Such expenses should not have been allowed in the year in which they were claimed.
4. The AO is correct in doubting the genuine of these expenses. But the problem is that they do not pertain to this asst. year.
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