Assessee had shown in account books for assessment year 2016-17 liability of sundry creditor outstanding against purchase of machinery in assessment year 2011-12 and machinery was defective and it was never put to use and supplier was asked to take back its machinery.  Assessing Officer added amount  to assessee’s income as per provisions of section 41(1) by holding that assessee had not demonstrated that liability was on account of capital expenditure. On appeal the Tribunal held that the  lower authorities had not disputed about purchase of machinery and no adverse evidence was brought on record that liability was other than purchase of machinery which is Capital asset which was neither  put to use nor claimed depreciation. Addition is deleted.  (AY. 2016-17 )