9911796707
TMI Blog1979 (6) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... nclaimed bonus, are taxable in this year under s. 41(1) of the IT Act, 1961, or not. 2. The learned ITO and the AAC were of the opinion that the claims became barred by time. Not only this, the amounts have already been merged in the profits of the company, and have become a part of the share-holders' profit. 3. Before the Tribunal, on behalf of the assessee, it was contended that the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the entire evidence on record. There is no dispute regarding the facts. From the facts, as found out by the learned AAC, in my opinion, there was no cessation of liability or remission under section 41 of the IT Act, 1961. On the question as to how does a time-bar act on a subsisting debt or liability, the position is that, under the law, the debt or liability subsists not withstanding that its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Kohinoor Mills Co. Ltd. vs. CIT(1), J.K. Chemicals Ltd. vs. CIT (6) Baroda Traders Ltd. vs. CIT (7), and Bhagwat Prasad Co. vs. CIT (2). There is another aspect of the matter. If the unclaimed liability is shown as a subsisting debt in the annual balance-sheet of the assessee; such action on the part of the assessee amounts to an acknowledgement by the assessee within the meaning of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her by reason of the operation of the law, i.e. on the liability becoming unenforceable at law by the debtor declaring unequivocally his intention not to honour his liability when payment is demanded by the creditor, or by a contract between the parties on by discharge of the debt-the debtor making payment thereof to the creditor. Mere transfer of an entry by the debtor does not bring about a cess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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