Section 41

Tax on Remission of Trading Liability for Assessee under Presumptive Taxation

Income Tax - Whether Remission Of Trading Liability Separately Taxable Where Income From Business Has Been Declared On Presumptive Basis U/S 44AD, 44ADA Or 44AE of Income Tax Act, 1961...

Liability to deduct section 194R TDS on Benefit or Perquisite in Business or Profession

Income Tax - Any person being Individual/HUF/Company/Firm/LLP etc. providing any benefit or perquisite whether convertible into money or not, is liable w.e.f. 1-7-2022 to deduct TDS U/s 194R @ 10% on the value or aggregate value of such benefit or perquisite....

Impact of Waiver of Loan or Liability on Depreciation Claim

Income Tax - ISSUE FOR CONSIDERATION When a loan taken for acquiring a depreciable capital asset or a part of the purchase price of such capital asset is waived in a year subsequent to the year of acquisition, an issue that arises with respect to waiver of loan or part of the purchase price is whether the depreciation […]...

Waiver of Loan And Its Consequent Tax Implications

Income Tax - Waived off loan means a situation wherein the lender voluntarily relieves a borrower of the obligation or liability to repay loan. This means that there is a surplus of cash/money in the hands of borrower and thus, a receipt in the hands of the borrower/assessee. Now the question is whether such waived off loan shall […]...

Analysis of Section 41(1) of Income Tax Act, 1961

Income Tax - In business there are circumstances where a person might have incurred a liability but later on he need not have to pay it for one or other reason. The Income Tax Act brings to tax such liabilities which are no more payable. ...

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Parameters on cessation of liability to be taxed u/s 41(1) of Income Tax Act

PCIT Vs Soorajmul Nagarmull (Calcutta High Court) - What are the parameters to consider the cessation of liability to be taxed u/s 41(1) of Income-tax Act,1961 and relation with limitation Act 1963?...

Mere difference in Balance Sheet of Assessee & Creditor cannot be treated as cessation of liability

Nandini V. Kalgutkar Vs ITO (ITAT Bangalore) - Nandini V. Kalgutkar Vs ITO (ITAT Bangalore) On perusal of section 41 of the IT Act, it is evident that it is a sine qua non that there should be an allowance or deduction claimed by the assessee in any assessment in respect of loss, expenditure or trading liability incurred by the assessee. Then, s...

No addition u/s 41(1) in absence of Evidence of Remission or Cessation of Liability

ITO Vs Schoeller Technologies India Pvt. Limited (ITAT Mumbai) - Unless, there is an evidence of remission or cessation of liability, provisions of Section 41(1) of the Act does not apply....

Sundry creditors cannot be treated as bogus on mere personal belief & imagination of AO

ACIT Vs Pradip Mullick (ITAT Kolkata) - ACIT Vs Pradip Mullick (ITAT Kolkata) Assessee submitted that owing to business of manufacturing and sale of sweets and confectioneries, he has to regularly purchase different types of raw materials from different vendors for his day to day business requirement. The number of vendors are large as th...

Section 41(1) addition not justified for loan creditors

Shri K A Rame Gowda Vs ACIT (ITAT Bangalore) - In the instant case, admittedly, it is loan creditors and not a trading liability. So, the assessee has not obtained allowance or deduction in computing the profits and gains of business or profession in respect of assessment of any year....

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Recent Posts in "Section 41" | Total 78 Posts

Tax on Remission of Trading Liability for Assessee under Presumptive Taxation

Whether Remission Of Trading Liability Separately Taxable Where Income From Business Has Been Declared On Presumptive Basis U/S 44AD, 44ADA Or 44AE of Income Tax Act, 1961...

Posted Under: Income Tax | Articles, Featured

Parameters on cessation of liability to be taxed u/s 41(1) of Income Tax Act

PCIT Vs Soorajmul Nagarmull (Calcutta High Court) -

What are the parameters to consider the cessation of liability to be taxed u/s 41(1) of Income-tax Act,1961 and relation with limitation Act 1963?...

Posted Under: Income Tax | Judiciary | All High Courts, Calcutta High Court

Mere difference in Balance Sheet of Assessee & Creditor cannot be treated as cessation of liability

Nandini V. Kalgutkar Vs ITO (ITAT Bangalore) -

Nandini V. Kalgutkar Vs ITO (ITAT Bangalore) On perusal of section 41 of the IT Act, it is evident that it is a sine qua non that there should be an allowance or deduction claimed by the assessee in any assessment in respect of loss, expenditure or trading liability incurred by the assessee. Then, subsequently, […]...

Posted Under: Income Tax | Judiciary | All ITAT, ITAT Bangalore

No addition u/s 41(1) in absence of Evidence of Remission or Cessation of Liability

ITO Vs Schoeller Technologies India Pvt. Limited (ITAT Mumbai) -

Unless, there is an evidence of remission or cessation of liability, provisions of Section 41(1) of the Act does not apply....

Posted Under: Income Tax | Judiciary | All ITAT, ITAT Mumbai

Sundry creditors cannot be treated as bogus on mere personal belief & imagination of AO

ACIT Vs Pradip Mullick (ITAT Kolkata) -

ACIT Vs Pradip Mullick (ITAT Kolkata) Assessee submitted that owing to business of manufacturing and sale of sweets and confectioneries, he has to regularly purchase different types of raw materials from different vendors for his day to day business requirement. The number of vendors are large as there are small vendors mostly supplying p...

Posted Under: Income Tax | Judiciary | All ITAT, ITAT Kolkata

Section 41(1) addition not justified for loan creditors

Shri K A Rame Gowda Vs ACIT (ITAT Bangalore) -

In the instant case, admittedly, it is loan creditors and not a trading liability. So, the assessee has not obtained allowance or deduction in computing the profits and gains of business or profession in respect of assessment of any year....

Posted Under: Income Tax | Judiciary | All ITAT, ITAT Bangalore

Waiver of loan amounts to cessation of liability other than trading liability

Technichem Organics Pvt. Ltd Vs ITO (ITAT Ahmedabad) -

The waiver of loan amounts to cessation of liability other than trading liability, thus, the said amount cannot fall under Section 28(iv) will not be applicable....

Posted Under: Income Tax | Judiciary | All ITAT, ITAT Ahmedabad

Liability to deduct section 194R TDS on Benefit or Perquisite in Business or Profession

Any person being Individual/HUF/Company/Firm/LLP etc. providing any benefit or perquisite whether convertible into money or not, is liable w.e.f. 1-7-2022 to deduct TDS U/s 194R @ 10% on the value or aggregate value of such benefit or perquisite....

Posted Under: Income Tax | Articles

No Section 41 Disallowance if no Cogent Evidence of Cessation of Liability

Jain Peripherals Pvt. Ltd. Vs DCIT (ITAT Delhi) -

Jain Peripherals Pvt. Ltd. Vs DCIT (ITAT Delhi) Section 41 postulates disallowance of cessation of liability for expenditure incurred in trading account earlier. In the present case, disallowance has been made by the AO and confirmed by the ld. CIT(A) on the plank that the purchases are not genuine. In our considered opinion, the issue [&...

Posted Under: Income Tax | Judiciary | All ITAT, ITAT Delhi

No section 41(1) addition if liability not stood remitted or ceased

ACIT Vs Foot Mart Retail India Pvt. Ltd. (ITAT Delhi) -

ACIT Vs Foot Mart Retail India Pvt. Ltd. (ITAT Delhi) ITAT held that that undisputedly the liabilities were outstanding since many previous year in the balance sheet of the assessee and the assessee has not written off the outstanding liabilities/creditors in its audited books of accounts and thus, it has to be presumed that the […...

Posted Under: Income Tax | Judiciary | All ITAT, ITAT Delhi