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2017 (10) TMI 533 - AT - Income TaxAddition on account of liabilities of sundry creditors as ceased to exist u/s 41(1) - Held that:- For invoking the provisions of Section 41, there must be two conditions fulfilled (i) there should be cessation/remission of liability and (ii) it should be ceased during the previous years relevant to assessment year under consideration. Even when the amount remained unclaimed for considerable period but it remains to be payable then there is no cessation or remission of such liability. Further it is also not established that the assessee was not having intention to repay these liabilities. These liabilities were clearly reflected in the accounts of the assessee thus the assessee continued to acknowledge the liability payable by him. Therefore, merely on the fact that the liability is outstanding for many years shall not amount to cessation or remission of the liability. Liabilities in question were subsisting during the relevant period and only because payments were not made against these liabilities, therefore, provisions of Section 41(1) of the Act - Decided in favour of assessee.
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