9911796707
TMI Blog2010 (1) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... was not included in the total income as per the provisions of Section 41(1) of the Act. Accordingly, the CIT came to the conclusion that the order passed by the Assessing Officer was erroneous, insofar as, it was prejudicial to the interest of the Revenue. The CIT issued notice under Section 263 of the Act to the assessee. The assessee contended that the said amount of Rs.100 lacs was credited to the profit and loss account, and consequently to the book profit, which was adjusted by the Assessing Officer in the assessment order and, therefore, assessment order cannot be said to be erroneous – ITAT deleted the additions made by the CIT u/s 263 – held that - Since the amount of write back of the loan liability already forms part of book prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial to the interest of the Revenue. The CIT issued notice under Section 263 of the Act to the assessee. The assessee contended that the said amount of Rs.100 lacs was credited to the profit and loss account, and consequently to the book profit, which was adjusted by the Assessing Officer in the assessment order and, therefore, assessment order cannot be said to be erroneous. It was further contended on behalf of the assessee that the provisions of Section 41(1) of the Act were not attracted in the present case. The CIT disagreed with the assessee and consequently set aside the assessment order and thereafter remitted the same to the Assessing Officer for fresh assessment. 4. The assessee went in appeal before the ITAT against the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility. Thus, the amount cannot be included as profit chargeable to tax under section 41(1) of the Act. Section 41(1) will apply only when the cessation of liability is in respect of such liability which is allowed as deduction in any of the preceding Assessment years. Thus, section 41(1) has no application in the present case." 5. In Mahindra and Mahindra Ltd. vs. Commissioner of Income Tax, 261 ITR 501, the High Court of Judicature at Bombay had held that no allowance or deduction having been allowed in respect of loan taken by assessee for purchase of capital assets, Section 41(1) was not attracted to remission of principal amount of loan. 6. In the present case, the assessee did not claim nor was allowed any deduction or benefit of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
