Delhi HC explains what constitute remission or cessation of a trading liability

CIT Vs Vardhman Overseas Ltd. (Delhi High Court) The principle behind section 41 of Income Tax Act, 1961 is simple. It is a provision intended to ensure that the assessee does not get away with a double benefit once by way of deduction in an earlier assessment year and again by not being taxed on the benefit received by him in a later year with reference to the liability earlier allowed as a deduction. In CIT, Mysore v. Lakshmamma, (1964) 52 ITR 789 Hegde, J., (as he then was) speaking for the Mysore High Court observed that Section 10(2A) of the Indian Income Tax Act, 1922, which is the fore-...