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TMI Blog2010 (7) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... self confer any benefit on the debtor as contemplated by the section - Section 41(1) of Act, 1961 was not attracted as there was neither remission nor cessation of liability in the present case. - 833/2010 - - - Dated:- 15-7-2010 - Through: Mr. N.P. Sahni with Mr. P.C. Yadav, Advocates. Through: None CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN MANMOHAN, J CM 11723/2010 This is an application for condonation of delay of 107 days in re-filing the appeal. For the reasons stated in the application, delay of 107 days in re-filing the appeal is condoned. Accordingly, application stands disposed of. ITA 837/2010 1. The present appeal has been filed under Section 260A of Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or cessation of the liability. The remission of the liability arises when the creditor voluntarily gives up the claim. The cessation of such liability arises only when it ceases to exist in the eye of law for all intents and purposes. When a debt becomes barred by time the creditor would not be able to recover the amount by enforcing his right in a court. But the right will not come to an end nor does the liability cease." 7. The principles stated above are applicable to the facts of the case although there has been amendment of Section 41(1) of the I.T. Act. Even under the amended Act, the revenue has to show with reference to material on record that liabilities have ceased to exist and that assessee has received some benefit. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or (b) the successor in business has obtained, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first-mentioned person or some benefit in respect of the trading liability referred to in clause (a) by way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee of an amount either in cash or in any other manner whatsoever or a benefit by way of remission or cessation and it should be of a particular amount obtained by him. Thus, the obtaining by the assessee of a benefit by virtue of remission or cessation is sine qua non for the application of this section. The mere fact that the assessee has made an entry of transfer in his accounts unilaterally will not enable the Department to say that section 41(1) would apply and the amount should be included in the total income of the assessee. The principle that expiry of period of limitation prescribed under the Limitation Act could not extinguish the debt but it would only prevent the creditor from enforcing the debt, has been well settled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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