JUDGMENT M.R. Shah, J. 1. AS common question of law and facts arise in both these tax appeals they are disposed by this common order. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income-tax Appellate Tribunal, Ahmedabad "D" Bench (hereinafter referred to as "the Tribunal") dated October 17, 2014, in I.T.A. No. 190/Ahd/2011 for the assessment year 2007-08, the Revenue has preferred Tax Appeal No. 192 of 2015 with the following substantial questions of law: "(A) Whether, in the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in law in deleting the addition of Rs. 56,96,645 made by the Assessing Officer as confirmed by the Commissioner of Income-tax (Appeals) under section 41(1) of the Income-tax Act? (B) Whether, in the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in law and on facts in restoring the ground relating to giving the benefit of telescoping effect to the addition of Rs. 56,96,641 made under section41(1) and Rs. 11,01,381 under section 68 of the Act against the addition of unexplained labour charges of Rs. 25,65,634? (C) Whether, in the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in law and on facts by restoring the grounds raised by assessee to the file of the Commissioner of Income-tax (Appeals) for deciding afresh on the issues of-- (i) the addition of Rs. 25,65,634 being 15 per cent of the labour charges legitimately incurred and debited to the profit and loss account and confirmed by the Commissioner of Income-tax (Appeals); (ii) the Commissioner of Income-tax (Appeals) giving the benefit of telescoping of the additions of Rs. 56,96,645 and Rs. 11,01,381 against the addition of Rs. 25,65,634?" 2. Feeling aggrieved and dissatisfied with the impugned judgment and order dated October 17, 2014, passed by the learned Tribunal in I.T.A. No. 362/Ahd/2011 for the assessment year 2007-08, the Revenue has preferred Tax Appeal No. 193 of 2015 with the following proposed substantial questions of law: "(A) Whether, in the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in law in restoring the ground raised by the Revenue to file of the Commissioner of Income-tax (Appeals) for deciding afresh on issue of deleting the addition of Rs. 25,65,634 made by the Assessing Officer under section 41(1) and under section 68 of the Act? (B) Whether, in the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal has erred in law in not allowing the appeal of the Department against the order of the Commissioner of Income-tax (Appeals) directing to give telescoping effect to additions made under sections 41(1) and 68 of the Act against the addition of unexplained labour charges of Rs. 25,65,634?" 3. The assessee filed the return of income for the assessment year 2007-08 showing the total income of Rs. 3,95,580. The return was duly processed under section 143(1) of the Income-tax Act (hereinafter referred to as "the Act"). The case was selected for scrutiny and notice under section 143(2) of the Act was issued. Thereafter, notice under section 142(1) of the Act along with a detailed questionnaire was issued and duly served upon the assessee. On verification of the balance-sheet, it was noticed that the assessee had shown sundry creditors amounting to Rs. 1,97,72,289. The assessee was required to furnish a copy of the ledger account of the last three years of the persons against whom sundry creditors were appearing in the balance-sheet along with complete name, address, PAN and conformation thereof. The assessee failed to produce the break up of the amounts appearing in the balance-sheet. The assessee did not furnish the details asked for and, therefore, show-cause notice came to be issued on November 20, 2009, as under: "Vide point No. 3 of this office show-cause notice dated November 3, 2009, you were required to furnish confirmation, name, address and PAN of the persons against whom sundry creditors of Rs. 1,97,72,289 were reflected in your balance-sheet as on March 31, 2007. Thereafter, your authorised representative, Shri Omkar Mishra, attended before the undersigned on November 3, 2009, November 12, 2009, and November 17, 2009, but failed to produce the details as called for. Please note that if you failed to produce the details as called for on the next date of hearing, the credit of Rs. 1,97,72,289 appearing in the balance-sheet will be added to your total income as unexplained credit." 3.1 It was found by the Assessing Officer that in the case of 10 sundry creditors the outstanding liability of the sundry creditors was very old. 1,97,72,289 appearing in the balance-sheet will be added to your total income as unexplained credit." 3.1 It was found by the Assessing Officer that in the case of 10 sundry creditors the outstanding liability of the sundry creditors was very old. The particulars of the same are under: List of sundry creditors 2006-2007 No. Name Year since pending/payable Amount (Rs.) 1. H.R. Enterprise 2002-03 6,44,282 2. Jay Construction 2002-03 45,213 3. Rane Builders 2002-03 63,808 4. Rent received in advance Not furnished 2,17,350 5 Sharddha Construction 2004-05 12,97,477 6 Sigma Electrical 2005-06 8,36,805 7 S.J. Communication 2002-03 2,55,509 8 S.J. Communication 2002-03 13,24,825 9 Torrent Communication 2001-02 1,10,277 10 Deversh Associates 2001-02 8,56,099 Total 56,51,645 The assessee was asked to furnish complete identity, creditworthiness of the creditors. However, the assessee failed to furnish any details regarding the above. The Assessing Officer found that some of the balances were pending from the financial years 2001-02 and 2002-03. As the assessee failed to produce the address, PAN and conformation of the aforesaid parties, the Assessing Officer found that the aforesaid amount of Rs. 56,51,645 was no longer payable and the payment has reached at cessation stage and, therefore, long standing sundry creditors amounting to Rs. 56,51,645 was treated as no longer payable/cessation of liability under section 41(1) of the Act and the same was added to the total income. During the course of the assessment, it was noticed by the Assessing Officer that the assessee had debited the amount of Rs. 1,71,04,226, being the labour charges. The assessee was called upon to produce the evidences in support of the expenditure debited in the profit and loss account, 'which the assessee failed to produce. The Assessing Officer disallowed 15 per cent of the labour charges of Rs. 1,71,04,766 by observing that it is quite possible that the assessee had not executed the major portion of the alleged work but it was only as accommodating contract entity for inflation of the expenses of one of the main contractors and, consequently, added Rs. 25,65,634 to the total income of the assessee. 3.2 Feeling aggrieved and dissatisfied with the order passed by the Assessing Officer in making the addition of Rs. 56,96,645 under section 41(1) of the Income-tax Act and the addition of Rs. 25,65,634 to the total income of the assessee. 3.2 Feeling aggrieved and dissatisfied with the order passed by the Assessing Officer in making the addition of Rs. 56,96,645 under section 41(1) of the Income-tax Act and the addition of Rs. 25,65,634, being 15 per cent of the labour charges as unexplained expenditure/the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals) and the learned Commissioner of Income-tax (Appeals) partly allowed the appeal, however, confirming the action of the Assessing Officer in making the addition of Rs. 56,96,645 by invoking section 41(1) of the Act and also confirming the action of the Assessing Officer in making the addition of Rs. 11,01,381 under section 68 of the Income-tax Act in respect of capital account from sale of mango orchard affected by an independent partnership firm in which the assessee was one of the partners. The learned Commissioner of Income-tax (Appeals) has also confirmed the action of the Assessing Officer in making the addition of Rs. 25,65,634, being 15 per cent of the labour charges, which comes to Rs. 1,71,04,226, however, the learned Commissioner of Income-tax (Appeals) deleted the addition of Rs. 25,65,634 made by the Assessing Officer under section 41(1) and section68 of the Act. 3.3 Feeling aggrieved and dissatisfied with the order passed by the learned Commissioner of Income-tax (Appeals), both the Revenue as well as the assessee preferred appeals before the learned Tribunal. By the impugned judgment and order, the learned Tribunal has partly allowed the appeal of the assessee by deleting the addition of Rs. 56,96,645 in respect of the outstanding credit balances of certain parties brought forward from earlier years by invoking section 41(1) of the Act. So far as the order passed by the learned Commissioner of Income-tax (Appeals) confirming the action of the Assessing Officer in making the addition of Rs. 25,65,634, being 15 per cent of the labour charges is concerned, the learned Tribunal restored the issue to the file of the learned Commissioner of Income-tax (Appeals) with a direction to decide the same afresh in accordance with law and after providing reasonable opportunity of hearing to the assessee. Consequently, the learned Tribunal also disposed of the appeal preferred by the Revenue/allowed the appeal preferred by the Revenue for statistical purpose. Consequently, the learned Tribunal also disposed of the appeal preferred by the Revenue/allowed the appeal preferred by the Revenue for statistical purpose. 3.4 Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned Tribunal in I.T.A. No. 190/Ahd/2011 and I.T.A. No. 362/Ahd/2011 for the assessment year 2007-08, the Revenue has preferred the present tax appeals with the aforesaid proposed substantial questions of law. 4. Shri Varun Patel, learned advocate appearing on behalf of the Revenue, has vehemently submitted that the learned Tribunal has materially erred in deleting the addition of Rs. 56,96,645 made by the Assessing Officer confirmed by the learned Commissioner of Income-tax (Appeals) under section 41(1) of the Act. 4.1 It is submitted that in the present case during the course of the assessment proceedings, the Assessing Officer observed certain liabilities (sundry creditors) amounting to Rs. 56,96,645 in the balance-sheet of the assessee, which were very old. It is submitted that though the assessee was given an opportunity to furnish complete identity, creditworthiness of the creditors, etc., by the Assessing Officer and the Commissioner of Income-tax (Appeals), the assessee had failed to do so. It is submitted that even the assessee also failed to produce the address, PAN and conformation of the said sundry creditors. It is submitted that under the circumstances when the Assessing Officer made the addition of Rs. 56,96,645 under section 41(1) of the Act the learned Tribunal is not justified in deleting such addition. 4.2 It is submitted that the learned Tribunal has materially erred in relying upon the decision of this court in the case of CIT v. Nitin S. Garg [2012] 22 taxmann.com 59 (Guj) as well as the decision dated February 4, 2014, in the case of CIT v. Bhogilal Ramjibhai Atara (Tax Appeal No. 588 of 2013) since the facts and circumstances of the present case are completely different than that of the aforesaid cases. It is submitted that as such there is no absolute proposition of law in the aforesaid decision. The addition under section 41(1) of the Act cannot be made if the assessee had written off the credit balance of the party brought forward from the earlier years. It is submitted that, therefore, the impugned judgment and order passed by the learned Tribunal is erroneous and untenable in law. The addition under section 41(1) of the Act cannot be made if the assessee had written off the credit balance of the party brought forward from the earlier years. It is submitted that, therefore, the impugned judgment and order passed by the learned Tribunal is erroneous and untenable in law. 4.3 It is further submitted by Shri Patel, learned advocate appearing on behalf of the Revenue, that in the facts and circumstances of the case, the learned Tribunal has erred in law and on facts in restoring the ground relating to giving benefit of telescopic effect to the addition of Rs. 56,96,645 made under section 41(1) of the Act and Rs. 11,01,381 under section 68 of the Act against the addition of unexplained labour charges of Rs. 25,65,634. It is submitted that as such the learned Tribunal has failed to give independent reasons for restoring the same to the file of the Commissioner of Income-tax (Appeals) with a direction to decide the same afresh in accordance with law. Making the above submissions, it is requested to admit/allow the present tax appeals. 5. Heard Shri Varun Patel, learned advocate appearing on behalf of the Revenue at length. We have perused and considered the assessment order, the order passed by the learned Commissioner of Income-tax (Appeals) as well as the impugned judgment and the order passed the learned Tribunal. 5.1 At the outset, it is required to be noted that the Assessing Officer made the addition of Rs. 56,96,645 invoking section 41(1) of the Income-tax Act by doubting certain sundry creditors amounting to Rs. 56,96,645 appearing in the balance-sheet of the assessee since past several years. However, it is required to be noted that as such those sundry creditors mentioned in the balance-sheet of the assessee were shown as sundry creditors since past several years from the relevant assessment year and at no point of time earlier the Assessing Officer doubted the creditworthiness and/or identity. In any case the addition on the aforesaid ground under section 41(1) of the Act cannot be made unless and until it is found that there was remission and/or cessation of the liability that too during the previous year, relevant to the assessment year in question, there cannot be any addition invoking the provisions of section 41(1) of the Act. In any case the addition on the aforesaid ground under section 41(1) of the Act cannot be made unless and until it is found that there was remission and/or cessation of the liability that too during the previous year, relevant to the assessment year in question, there cannot be any addition invoking the provisions of section 41(1) of the Act. Identical question came to be considered by the Division Bench of this court in the case of Nitin S. Garg (supra) and in the similar set of facts and circumstances of the case when the addition was made invoking section 41(1) of the Act by doubting the creditworthiness and/or identity of the sundry creditors mentioned in the balance-sheet and it was found that those sundry creditors were very old and no interest had been paid on those loans, the Division Bench has deleted such addition made under section 41(1) of the Act. In paragraph 15, the Division Bench has observed and held as under: "15. In the case before us, it is not been established that the assessee has written off the outstanding liabilities in the books of account. The Appellate Tribunal is justified in taking the view that as assessee had continued to show the admitted amounts as liabilities in its balance-sheet the same cannot be treated as assessment of liabilities. Merely because the liabilities are outstanding for last many years, it cannot be inferred that the said liabilities have seized to exist. The Appellate Tribunal has rightly observed that the Assessing Officer shall have to prove that the assessee has obtained the benefits in respect of such trading liabilities by way of remission or cessation thereof which is not the case before us. Merely because the assessee obtained benefit of reduction in the earlier years and balance is carried forward in the subsequent year, it would not prove that the trading liabilities of the assessee have become non existent." 5.2 The aforesaid decision of the Division Bench in the case of Nitin S. Garg (supra) has been considered and followed by the Division Bench of this court in the case of Bhogilal Ramjibhai Atara (supra) and the addition made under section 41(1) of the Act in the similar facts and circumstances of the case is ordered to be deleted. In paragraph 8 the Division Bench has observed and held as under (page): "We are in agreement with the view of the Tribunal. Section 41(1) of the Act as discussed in the above three decisions would apply in a case where there has been remission or cessation of liability during the year under consideration subject to the conditions contained in the statute being fulfilled. Additionally, such cessation or remission has to be during the previous year relevant to the assessment year under consideration. In the present case, both elements are missing. There was nothing on record to suggest there was remission or cessation of liability that too during the previous year relevant to the assessment year 2007-08 which was the year under consideration. It is undoubtedly a curious case. Even the liability itself seems under serious doubt. The Assessing Officer undertook the exercise to verify the records of the so called creditors. Many of them were not found at all in the given address. Some of them stated that they had no dealing with the assessee. In one or two cases, the response was that they had no dealing with the assessee nor did they know him. Of course, these inquiries were made ex parte and in that view of the matter, the assessee would be allowed to contest such findings. Nevertheless, even if such facts were established through bi parte inquiries, the liability as it stands perhaps holds that there was no cessation or remission of liability and that, therefore, the amount in question cannot be added back as a deemed income under section 41(1) of the Act. This is one of the strange cases where even if the debt itself is found to be non-genuine from the very inception, at least in terms of section 41(1) of the Act there is no cure for it. Be that as it may, in so far as the orders of the Revenue authorities are concerned, the Tribunal not having made any error, this tax appeal is dismissed." In the present case, there was no remission and/or cessation of the liability during the previous year relevant to the assessment year under consideration. As such, there is no remission and/or cessation of the liability during the year under consideration subject to the conditions contained in the statute being fulfilled. In the present case, both the aforesaid elements are missing. 6. As such, there is no remission and/or cessation of the liability during the year under consideration subject to the conditions contained in the statute being fulfilled. In the present case, both the aforesaid elements are missing. 6. Under the circumstances, as such, no error has been committed by the learned Tribunal in deleting the additions made under section 41(1) of the Act. The proposed substantial questions of law (A) and (B) with respect to deleting the addition made under section 41(1) of the Act are answered against the Revenue. 7. Now, so far as the other two questions in restoring the grounds raised by the learned Tribunal with respect to the additions made under section 68 of the Act of unexplained labour charges of Rs. 25,65,634 is concerned, it is required to be noted that as such the entire issue is remanded by the learned Tribunal to the file of the learned Commissioner of Income-tax (Appeals) and the matter is remanded to the learned Commissioner of Income-tax (Appeals). Under the circumstances, with respect to the above, no interference of this court is called for, as the entire issue with respect to the same would be at large before the learned Commissioner of Income-tax (Appeals). In view of the above and for the reasons stated hereinabove, both the appeals fail and they deserve to be dismissed and are, accordingly, dismissed.