TMI Blog2016 (2) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... ear (i.e., the assessment year in question) when the liability ceased to exist. The Tribunal having correctly applied the law and followed the decision in Shivali Construction (2013 (6) TMI 130 - DELHI HIGH COURT ), cannot be faulted in its decision which is impugned before us. A similar decision of this court is also reported in Commissioner of Income-Tax v. Tosha International Ltd, (2008 (9) TMI 31 - HIGH COURT DELHI ). Since the issue on law already stands settled by the said decisions of this court, no substantial question of law arises for our consideration. - Decided against revenue - ITA 113/2016 - - - Dated:- 15-2-2016 - Badar Durrez Ahmed And R. K. Gauba, JJ. For the Appellant : Mr Zoheb Hossain and Mr Dileep Shivpuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, the provisions of Section 41(1) of the Income-tax Act would not be attracted. However, the Assessing Officer invoked the provisions of Section 41(1) of the said Act and made an addition of ₹ 5,64,85,956/- to the income of the assessee and completed the assessment under Section 143(3) of the said Act by virtue of his order dated 28.12.2011. 4. As pointed out above, the Commissioner of Income Tax (Appeals) deleted the addition made by the Assessing Officer and found that Section 41(1) of the said Act was not attracted. Against the said decision, the revenue filed an appeal before the Income Tax Appellate Tribunal which has been dismissed by the said Tribunal by virtue of the impugned order dated 26.06.2015. The Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) CIT vs. Compaq Electric Ltd. (ITA No. 172 of 2011 dated 18.10.2011) (Karnataka HC) (v) CIT vs. Chetan Chemicals Pvt. Ltd. (267 ITR 770) (Guj.) (vi) Mahindra Mahindra Ltd. vs. CIT (261 ITR 501) (Bom.) (vii) CIT-3 vs. M/s Cipla Investments Ltd. (ITA No. 6988 of 2012, dated 07.02.2012) (HC of Bombay) 8.4 We further note that it is well settled law that where no deduction / allowance has been made in respect of loss, exp/liability in the assessment year or in any earlier years, cessation of such liability cannot be taxed under section 41(1) of the Income Tax Act. To Support this finding, we place reliance on the following judgments:- i. CIT-III vs. Shivali Constructions P. Ltd. 355 ITR 218 dated 01.05.2013, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Apart from this it has been found as a matter of fact that the respondent / assessee had not got the benefit of any allowance or deduction in the assessment for any prior year in respect of loss, expenditure or trading liability incurred by the respondent / assessee. Thus the cessation of the liability by itself would not lead to the attraction of the provisions of Section 41(1) in the subsequent year (i.e., the assessment year in question) when the liability ceased to exist. 6. The Tribunal having correctly applied the law and followed the decision in Shivali Construction (supra), cannot be faulted in its decision which is impugned before us. A similar decision of this court is also reported in Commissioner of Income-Tax v. Tosha Int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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