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| The Tax Publishers2020 TaxPub(DT) 2039 (Kol-Trib) INCOME TAX ACT, 1961
Section 41(1)
Where assessee failed to explain as to how the liability was increased as shown by assessee in its balance-sheet and he had also failed to point out any communication received from the private limited company during the period of last more than 10 years to show that loan liability in question sold by Bank was ever claimed by said company from assessee, therefore addition under section 41 was rightly made by AO.
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Business income - Unsecured loan taken from Bank by treating the same as liability, which ceased to exist - Assessee failed to Shaw any evidence or record -
Assessee was engaged in business of wholesale trading of medicines. In balance-sheet filed, unsecured loan taken from the Bank was shown by assessee. In response to the notice issued by AO under section 133(6), bank, however, confirmed the outstanding balance payable by assessee. Since assessee could not explain this difference, AO treated the same as the bogus liability and an addition was made by him to the total income of assessee. Held: Assessee had invited my attention to the copy of statement issued by Bank to show that loan liability representing mainly the interest and penal interest charged by Bank was sold to M/s. S. On a query raised by assessee, he, however, failed to explain as to how the said liability was increased as shown by assessee in its balance-sheet. He had also failed to point out any communication received from M/s. S during the period of last more than 10 years to show that loan liability in question sold by Bank was ever claimed by M/s. S Limited from the assessee. Therefore, addition made by AO was justified.
REFERRED :
FAVOUR : Against the assessee
A.Y. :
INCOME TAX ACT, 1961
Section 133
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