No Cessation of Liability u/s 41(1) as debt not written off in books

Total Environment Building Systems Pvt Ltd Vs DCIT (ITAT Bangalore)

ITAT Bangalore held that unless the debt has been written off in the books of accounts of both the assessees, it cannot be said that “that cease to exist”. Hence, as assessee has not written off the same in its books of accounts and it cannot be said that the debt ceased to exist. Thus, amount cannot be considered as cessation of liability u/s. 41(1) of the Income Tax Act.

Facts- AO while passing asses

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