The High Court upheld the Income Tax Appellate Tribunal's ...

High Court upholds deletion of addition u/s 41(1) where liability time-barred & no deduction claimed earlier.

July 9, 2024

Case Laws Income Tax HC

The High Court upheld the Income Tax Appellate Tribunal's decision to delete the addition made by the Assessing Officer u/s 41(1) of the Income Tax Act. The provisions of Section 41(1) require the assessee to have claimed an allowance or deduction in respect of a loan, expenditure, or trading liability, which was subsequently recovered or remitted. In the present case, the assessee had not claimed any such deduction, and the liability had become time-barred. Therefore, Section 41(1) could not be invoked merely because the payment of liability had become barred by limitation. The Tribunal correctly held that the provisions of Section 41(1) are inapplicable where the existence of liability itself is doubted, and the addition could have been made in the year the liability was claimed or treated as unexplained cash credit u/s 68.

View Source

← Previous Next →

The High Court upheld the Income Tax Appellate Tribunal's ...

High Court upholds deletion of addition u/s 41(1) where liability time-barred & no deduction claimed earlier.

July 9, 2024

Case Laws Income Tax HC

You may also like:

Addition u/s 41(1) - addition towards waiver of liability / expenditure claimed earlier - One of the essential requirements of Section 41(1) of the Act is that there...

Addition u/s 41 - Cessation of liability - Addition of amount of stale drafts not claimed for more than three years and the claim for which had become barred by...

Cessation / waiver of interest liability - addition u/s 41(1) - earlier interest was capitalized as part of cost of assets and depreciation was claimed - Depreciation...

Addition u/s 41(1) or u/s 28 - waiver of working capital loan - In respect of principal amount, though the assessee has gained the benefit by way of one time settlement...

Addition u/s 41(1) - no deduction/allowance has been made in respect of loss, exp/liability in the assessment year or in any earlier years, cessation of such liability...

Addition u/s 68 OR 41(1) - unexplained cash credit - Cessation of liability - The appellant contested additions to their income, alleging bogus sundry creditors. Despite...

Addition u/s 41(1) - Once the AO has allowed the assessee’s corresponding material purchases claim in the revenue account as a regular head of expenditure, the same very...

The assessing officer made an addition u/s 41(1) on the grounds that the assessee had ceased trading liabilities, even though the assessee did not respond to...

Addition on account of non-genuine creditors u/s 41(1) - scope of section 41(1) - the benefit which he obtains by way of remission or cessation of a trading liability in...

Addition u/s 41(1) - interest waived by the Bank - The appellant contended that the waiver of liability by the bank should not be chargeable to tax under Section 41(1)...

Addition u/s 41(1) - cessation of liability - waive of loan as part of one time settlement of loan with the banks - The benefit gained by the assessee on account of...

Cessation of liability u/s 41(1) - As per the explanation, the remission or cessation of any liability by a unilateral Act, is covered u/s.41(1) - additions confirmed - AT

Addition u/s 41(1) on account of presumed remission of liability - unless there is a cessation of liability, income cannot be added as per the provisions of Section 41(1) - AT

Addition u/s 41(1) - cessation of liability - In light of the precedent set forth in Sugauli Sugar Works, wherein the Supreme Court clarified that the mere lapse of time...

Additions u/s 41(1) - cessation of liabilities - written off / remitted liabilities - the claim has been filed before BIFR and therefore the same cannot be considered to...

Quick Updates: