Section 41(1) addition not justified for loan creditors

Shri K A Rame Gowda Vs ACIT (ITAT Bangalore) Admittedly in this case, the addition has been made by invoking the provisions of section 41(1) of the I.T.Act. A plain reading of section 41(1) of the I.T.Act make it clear that the said section will have application only if the following conditions are satisfied:- (i) an allowance or deduction had been made, in the computation of profits and gains of a business or profession, in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and (ii) subsequently during any previous year the assessee had ...