Cessation of liability U/s. 41(1) cannot be presumed, merely because liability remained unpaid for a period of 3 years

ITO Vs. Thadaram Khaldas Tolani (ITAT Mumbai) It is evident, merely on the reasoning that liability in respect of some of the sundry creditors have remained outstanding for about three years the assessing officer has concluded that they have to be treated as income of the assessee in the impugned assessment year as they have ceased to exist as per section 41(1) of the Act. However, as could be seen from the facts on record, in course of assessment proceedings, the assessee not only furnished the names and addresses of the sundry creditors but also furnished the details of outstanding liability...