COMMISSIONER OF INCOME TAX Vs. SITA DEVI JUNEJA

JUDGEMENT

(1.) THE Revenue has filed this appeal under s. 260A of the IT Act, 1961 (hereinafter referred to as 'the Act'), against the as 'the Tribunal') in ITA No. 18/Del/2008, pertaining to the asst. yr. 2004 -05, while raising the following substantial questions of law :

(2.) IN the present case, the AO made an addition of Rs. 1,47,71,696 on account of outstanding sundry credit balances as become liable to be treated as deemed income under s. 41(1), Expln. 1 of the Act. On appeal filed by the assessee, the CIT(A) partly allowed the appeal and the aforesaid addition was deleted, while coming to the conclusion that in the facts and circumstances of the case, the AO has wrongly invoked the provision of s. 41(1), Expln. 1 of the Act. It has been observed that in the instant case, there was no unilateral cessation or remission of liabilities of Rs. 1,47,71,696, therefore, the provision of Expln. 1 to s. 41(1) of the Act is not attracted. It was further observed that if the income is to be assessed under s. 41(1) of the Act, the burden is on the Revenue to prove this income, whereas the AO has failed to give any finding in his assessment order regarding the mandatory requirement of s. 41(1) of the Act. The AO has also not given any finding regarding obtaining of any benefit of these trading liabilities in the earlier year.

(3.) AGAINST the order of the CIT(A), the Revenue filed appeal, which has been dismissed by the Tribunal, while observing as under :