Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (10) TMI 699 - AT - Income TaxApplicability of section 41(1) of the Income Tax Act – Held that:- Section i.e. 41(1) would be applicable where the assessee has obtained some benefit in respect of any trading liability by way of remission or cessation thereof - Merely because a liability has become time barred or is outstanding for a longer period, it cannot be presumed that there is a remission or cessation of the liability - Explanation (1) to Section 41(1) is a deeming provision by which remission or cessation of liability would be presumed in the year in which the debtor has written off the liability in his books of account - Explanation (1) to Section 41(1) would be squarely applicable for the FY 2012-13 - There cannot be cessation of liability twice - Therefore, when as per Explanation (1) there would be cessation of liability in the FY 2012-13 i.e. relevant to the assessment year 2013-14, the addition for the same cannot be made by presuming remission or cessation of liability in the year under consideration i.e. AY 2007-08 – Decided in favor of Assessee.
|