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2011 (3) TMI 574 - AT - Income TaxDeemed income - forfeiture of part payment of earnest money received against proposed sale of flats - cessation of liability - Held that:- no financial entries have been passed with regard to the amount of Rs. 1,63,20,000. - it is amply clear that the assessee never wrote off the liability of Rs. 1,63,20,000, in its books of account. - Once this was so, Explanation 1 to section 41(1) of the Act did not at all come into play, since in the absence of the writing off of the liability in the accounts, the liability subsisted and no cessation of liability could be presumed. - Decided in favor of assessee.
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