Assessee, engaged in Basmati rice trading, declared sundry creditors in its balance sheet. The AO issued summons  which creditors did not respond.  The  inspection report  stated  that those entities were not found at stated addresses.  The AO   treated the entries as fictitious and made addition under section. 41 (1) of the Act. Order of the AO is affirmed by the CIT(A). On appeal the Tribunal held that  creditors had valid trading transactions with assessee in prior years, verified and accepted in previous assessment. Additionally, balance sheets, tax returns, and scrutiny orders for those creditors demonstrated continuous, genuine business relationships with assessee and liabilities were also settled in subsequent year, negating claim of cessation.  When amounts were shown as payable in balance sheet of assessee and debt got acknowledged by assessee, there couldnot be any remission or cessation of liability in terms of section 41(1). Further if any discrepancy was found with confirmation and balance sheet of those sundry creditors, suitable action should be taken in hands of those sundry creditors and no adverse inference could be drawn on assessee. Addition is deleted.   (AY.  2015-16)