Loan Liability Not a Trading Liability: No Section 41(1) Addition

ITO Vs J L G Developers Ltd. (ITAT Delhi) Loan Liability ≠ Trading Liability: No 41(1) Addition Even if Company Struck Off AO made addition of Rs.8.22 crore u/s 41(1) alleging cessation of liability, on the ground that assessee-company had been struck off by ROC u/s 248 of Companies Act & therefore liability towards M/s Sethi Housing Pvt Ltd had ceased. CIT(A) deleted the addition, holding that amount was a loan/advance used to repay Bank of India loan, never claimed as expenditure, never written back in P&L & continued to appear as outstanding liability. ITAT upheld CIT(A)’s o...