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

Please become a Premium member. If you are already a Premium member, login here to access the full content.