Goods and Services Tax : Explore the critical implications of Section 16(4) of the CGST Act, 2017 on taxpayers' Input Tax Credit (ITC) eligibility and the ...
Income Tax : Explore the intricacies of Income Tax Section 41, covering allowances, deductions, and financial transactions. Real-world examples...
Income Tax : Whether Remission Of Trading Liability Separately Taxable Where Income From Business Has Been Declared On Presumptive Basis U/S 44...
Income Tax : Any person being Individual/HUF/Company/Firm/LLP etc. providing any benefit or perquisite whether convertible into money or not, i...
Income Tax : ISSUE FOR CONSIDERATION When a loan taken for acquiring a depreciable capital asset or a part of the purchase price of such capita...
Income Tax : ITAT Delhi rules against Section 41(1) addition when no cessation of liability occurs, directing cancellation of a demand in the c...
Income Tax : Dive into the detailed analysis of Syama Prasad Mookerjee Port's case against DCIT at ITAT Kolkata regarding Section 41(1) of the ...
Custom Duty : Lovy International challenged rejection of Drawback to ROSCTL conversion. CESTAT Delhi ruled CBEC Circular time limit invalid. Det...
Income Tax : ITAT Mumbai rules in favor of Ecokrin Hygiene Pvt. Ltd., deleting additions under section 41(1) of the Income Tax Act solely based...
Income Tax : Calcutta High Court held that the provisions of old regime of Section 148 of the Income Tax Act (including TOLA) cannot be applied...
Custom Duty : Stay updated with the latest amendment to the Sea Cargo Manifest and Transhipment Regulations, 2018 by the Central Board of Indire...
Liabilities are still outstanding in the balance sheet as on the last date of relevant accounting period in the statement of account submitted with the department. There is no material on record to prove that the said liabilities have ceased to exist.
In order to attract the provisions of Section 41(1) of the Act, it is necessary that there should have been a cessation or remission of liability. As held by the Bombay High Court, in the case of J. K. Chemicals Ltd. (supra), cessation of liability may occur__ either by thereason of the liability becoming unenforceable in law by the creditor coupled with debtor declaring his intention not to honour his liability, or by a contract between parties or by discharge of the debt.
In view of the fact that the enabling conditions of sec.41(1) are not fulfilled in this case, the A.0. had not brought any material on record to indicate that the appellant had obtained any benefit against the above said liabilities and these liabilities are still existing at the end of relevant assessment year in the books of accounts of the appellant, I am inclined to agree with the contentions of the Ld. A.R. Accordingly, addition of Rs. 1,36,76,461/- made by the A. 0. u/s 41(1) is ordered to be deleted. This ground of appeal is allowed.
Time-barred unpaid dues – Unpaid dues of employees, whose recovery is time barred, cease to be employer’s liability and have to be added under section 41(1)
The Assessing Officer had asked the respondent-assessee, as to why Rs. 1,63,37,365/- should not be taxed under Section 41(1) of the Act on account of cessation of liability payable to sundry creditors. The assessee on the same date Was asked to furnish details with regard to the change in address and to furnish the proof of payment made to Makkar Traders in the following years and to explain the current status.
