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 : Tribunal held that deduction for bad debts is allowable in the year in which the debts are actually written off in the books of ac...
Income Tax : The ITAT Raipur held that additions for cessation of liability cannot be made merely because creditor confirmations were not filed...
Income Tax : High Court held that consideration received on transfer of self-generated trademarks before 1 April 2002 was not taxable as capita...
Income Tax : The Tribunal held that addition under Section 41(1) cannot be made without proof of actual cessation of liability. It found that m...
Income Tax : The Tribunal held that mere non-payment or expiry of limitation does not amount to cessation of liability. In absence of actual be...
Custom Duty : Stay updated with the latest amendment to the Sea Cargo Manifest and Transhipment Regulations, 2018 by the Central Board of Indire...
The ITO Vs Shri Radhey Shyam Agarwal (ITAT Jaipur) Once, there is an impending dispute between assessee and M/s. Laxmi Carpet Enterprises then it cannot be assumed that liability for payment has ceased
ACIT vs Advert Communication ( ITAT Delhi) 1.If addition has to be made for bogus purchases then sales should also be disturbed ; 2.Until and unless both parties don’t confirm the cessation of liability then addition cannot be made u/s 41(1); 3.
ITAT Jaipur held In the case of M/s Brothers Pharma Pvt. Ltd. vs. ITO that the case laws referred by the CIT (A) are squarely distinguishable on the ground that there was a written off either by the assessee or bilaterally
Smt. Sumitra Devi Agarwal Vs. ITO (ITAT Jaipur)- The AO has questioned the genuineness of the liability and in absence of the requisite confirmation, has held the same to be a bogus liability. Where the liability itself has been held to be a bogus liability, where is the question of remission or cessation thereof.
ITAT Delhi has held in the case of Perfect Paradise Emporium Pvt. Ltd vs. ITO that If creditors are found bogus then the amount can be added back to income u/s 68 as unexplained cash credits or us 41(1) as business income.
The Supreme Court in CCIT vs. Kesaria Tea Co. Ltd. (2002) 20 SITC 172 (SC) has laid down that the resort to section 41(1) can be taken only if the liability of the assessee can be said to have ceased finally and there is no possibility or reviving it. Also, it has held that an unilateral action on the part of the assessee by way of writing-off the liability in its accounts does not necessarily mean that the liability ceased in the eye of law.
Section 41 (1) of the act provides treating of trading liability on cessation as deemed profit in business or profession. But section has to apply when there is benefit upon such cessation in form of any remission.
In the case of The Commissioner of Income Tax vs. V. S. Dempo & Company Ltd, Goa High Court has held that the principal amount of loan taken for purchase of capital assets was on capital account and therefore on cessation of its repayment there is no occasion to apply Section 41 (1) of the Act. And resultant income should only be treated as capital receipt.
CIT Vs. M/S Mcdowell & Co Ltd Now Known As United Spirits Ltd (Karnataka High Court) In the instant case, as per the scheme he was allowed to retain the sales tax as determined by the competent authority and pay the same 15 years thereafter. The tax collected was deemed to have been paid and, […]
The Tribunal was justified in taking the view that the assessee had continued to show the admitted liabilities in its balance sheet, the same could not be treated as cessation of liabilities. Merely because the liabilities were outstanding for last many years, it could not be inferred that the said liabilities has ceased to exist.
