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2016 (7) TMI 1006 - AT - Income TaxDisallowance under Section 14A - Addition for cessation of liability under section 41(1) - Held that:- Respectfully following the findings of the Hon’ble Jurisdictional High Court in the case of Cheminvest Vs. CIT (2009 (8) TMI 126 - ITAT DELHI-B ), we hold that no disallowance under section 14A of the Act is called for in the case of the assessee as no exempt income was received or receivable during the year under consideration. - Decided in favour of assessee Addition for cessation of liability under section 41(1) - Held that:- In the facts of the instant case, we find that the assessee has not remitted the liability in its books of accounts. It is the Assessing Officer who has presumed that those parties no longer existed or have written off the amounts in their books of accounts. The Assessing Officer has not verified from those parties whether they have forgone their claim or the liability has become unenforceable at law by the creditor and the debtor declared unequivocally his intention not to honour his liability when payment is demanded by them. As we find that the assessee has not remitted the credit balances in respect of the above parties, the assessee has not obtained any benefit in respect of such trading liability and, therefore, provisions of section 41(1), are not applicable to the facts of the case in hand. Thus we hold that the assessee has not obtained any benefit in respect of the creditors by way of remission or cessation thereof and, therefore, no addition can be made in the assessment year under consideration under section 41(1) of the Act - Decided in favour of assessee
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