Long outstanding liability cannot be treated as ceased liability & added back u/s 41(1)

Advertisement HPL Additive Ltd Vs DCIT (ITAT Delhi) The issue under consideration is whether the addition made by A.O. u/s 41(1) treating the outstanding as cessation of liability is justified in law? During the course of scrutiny assessment proceedings, assessee was asked to furnish complete details of sundry creditors. After perusing the details, AO noticed that the creditors were static since long. Assessee was asked to show cause as to why these creditors be not treated as ceased liability and added back to the total income of assessee under section 41(1). Assessee stated that it was un...