9911796707
TMI Blog1986 (10) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Income-tax Act, 1961, at the instance of the Revenue to answer the following question of law: "Whether, on the facts and in the circumstances of the case, and on the weight of the entire record, the Tribunal was justified in holding that there was no cessation of liability of the assessee-company in respect of the two amounts, namely, Rs. 16,336 and Rs. 98,091, being unclaimed wages and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, the Tribunal accepted the assessee's contention that these amounts could not be deemed to be profits and gains of business in order to be taxable under section 41(1) of the Act. This view was taken on the basis that these amounts representing the unclaimed wages and bonus, though time-barred, had not resulted in either remission or cessation of the trading liability of the assessee without w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, since there is neither any unilateral act of the creditor amounting to remission nor any bilateral act of the parties resulting in the liability ceasing to exist in law, merely because the recovery of the same has become time-barred. It has also been held in these cases that the mere fact that the assessee has not shown such an amount as his trading liability in his account books does not aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Motor Transport Co. v. CIT [1978] 114 ITR 677 (All). In our opinion, this decision of the Allahabad High Court cannot be construed as taking a contrary view on account of the fact that this too is a decision by the Division Bench like the earlier decision and, therefore, it is reasonable to assume that a subsequent Division Bench of the same High Court would not take a view inconsistent with the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view in the assessee's favour. Following those cases, it is to be held that the Tribunal was justified in the view it has taken. Consequently, the reference is answered against the Revenue and in favour of the assessee as under : " The Tribunal was justified in holding that there was no cessation of the liability of the assessee in respect of the amounts of Rs. 16,336 and Rs. 98,091, being u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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