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2006 (10) TMI 118 - HC - Income TaxCessation of liability - surrendered the Group Gratuity Scheme with LIC - Tribunal quashed the order passed by the CIT u/s 263 - HELD THAT:- From a reading of the reasoning of the Tribunal, it is clear that the assessee has continued to show the admitted amount as liability in the balance-sheet. The undisputed fact is that it is a liability reflected in the balance-sheet. Once it is shown as liability by the assessee, the CIT is wrong in holding that the same is assessable u/s 41(1) of the Act. Unless and until there is a cessation of liability, section 41 will not be pressed into service. Thus, we find the reasoning by the Tribunal was based on valid materials and evidence and hence there is no error or legal infirmity in the order of the Tribunal so as to warrant interference. Hence, no substantial questions of law arise for consideration of this court and the tax case is dismissed.
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