MAX MEDIA TECHNOLOGIES PRIVATE LIMITED ,MUMBAI vs. ITO WARD 12(3)(1), MUMBAI

ITA 4922/MUM/2025Status: DisposedITAT Mumbai10 February 2026AY 2013-14Bench: SMT. BEENA PILLAI ( (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 41(1) requires cessation of liability, which was not established during the year under consideration. The fact that the waiver was offered to tax in a subsequent year indicated that the liability had not ceased in the year under appeal.

What were the facts?

The assessee had outstanding liabilities to foreign creditors for mobile phones and accessories purchased in earlier years. The AO treated these outstanding amounts as income under Section 41(1) on the grounds of cessation of liability, as no payment was made for a long time. The assessee contended that the liability was still outstanding and disputed, and later waived in a subsequent year.

What were the issues?

Whether outstanding trade liabilities to foreign creditors, for which no payment was made for a long period, constitute cessation of liability under Section 41(1) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 41(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SMT. BEENA PILLAI

For Appellant: Shri Raman, C.A
For Respondent: Shri Limbasiya Kavan Nareshkumar, Sr. DR
Hearing: 03.02.2026Pronounced: 10.02.2026

Per Smt. Beena Pillai, JM: Present appeal filed by assessee arises out of order dated 09/06/2025 passed by NFAC, Delhi [hereinafter “the Ld.CIT(A)”], for Assessment Year 2013-14 on the following grounds of appeal:-

“1. Violation of principles of natural justice: On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in dismissing the appeal without adequately considering the detailed submissions, documentary evidence, and case laws furnished by the appellant, thereby violating the principles of natural justice.

2.

Non-appreciation of evidence and incorrect factual findings: On the facts and in the circumstances of the case and in law, t

The order continues below.

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