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TMI Blog2017 (12) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... nd question (B). 2. Heard Mrs.Mauna M. Bhatt, learned senior standing counsel for the appellant. 3. ADMIT. The following substantial questions of law arise for consideration. (1) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in deleting the addition of Rs. 23,04,369/- by considering the same to be service tax? (2) Whether on the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 41(1) of the Income Tax Act? 5. The Assessing Officer on verification of ledger accounts of the respondent-assessee noticed certain persons appearing as sundry creditors and found that the balances were pending for long. The total amount of such balances came to Rs. 33,85,907/-. The Assessing Officer was of the opinion that no party would wait indefinitely, especially when a substantial a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could have been added to the total income of the assessee, if the same is written off by the assessee; and that till the assessee recognizes such liability, it cannot be held that such liability has ceased. 6. Section 41(1)(a) of the Income Tax Act, 1961 provides that where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on "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 (a) or the successor in business under clause (b) of that sub-section by way of writing off such liability in his accounts. Therefore, to attract the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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