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Loan Liability Not a Trading Liability: No Section 41(1) Addition
Case Law Details
- Case Name
- ITO Vs J L G Developers Ltd. (ITAT Delhi)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2016-17
- Courts
- All ITAT, ITAT Delhi
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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.
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