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2012 (8) TMI 154 - HC - Income TaxDisallowance of claim of unpaid liability in respect of salaries - ITAT allowed the claim - Held that:- It would not be logical to say that a debtor or an employer, holding on to unpaid dues, should be given the benefit of his showing the amount as a liability, even though he would be entitled in law to say that a claim for its recovery is time barred, and continue to enjoy the amount. Because with effect from 1-4-1997 by virtue of Finance Act, 1996 an Explanation was added to Section 41 which spells out that “loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof” shall include the remission or cessation of any liability by a unilateral act by the first mentioned person under clause”. The expression “include” is significant as Parliament did not use the expression “means”. Necessarily, even omission to pay, over a period of time, and the resultant benefit derived by the employer/assessee would therefore qualify as a cessation of liability, albeit by operation of law - decided against assessee.
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