CIT v. Sugauli Sugar Works (P) Ltd.

236 ITR 518Supreme Court of India1999#449 most cited

What is CIT v. Sugauli Sugar Works (P) Ltd. authority for?

For the purpose of Section 41(1) of the Income-tax Act, a liability is considered to have ceased only when the creditor actively releases or writes off the amount, or when the liability ceases to exist in the assessee's books; mere expiry of the limitation period for recovery does not constitute cessation of liability.

203

judgments rely on this decision, according to BharatTax’s citation analysis of 367,368 Indian tax judgments — from 2002 to 2026.

Also referred to as

CIT v. Sugauli Sugar Works · 236 ITR 518 · Supreme Court · Section 41(1) · cessation of liability · remission of liability · deemed income · limitation period · creditor write-off · liability ceased to exist in books

Also reported as

102 Taxmann 713

Sections most often in play

Section 41(1)Section 143(3)Section 68Section 133(6)Section 142(1)Section 1961Section 37(1)Section 69C
Read the full judgment

Issues it is cited on

recognised provident fundapproved gratuity fundsection 50bsection 43b(f)section 40a(9)section 211section 41(1)wholly and exclusively for businesssection 35dsection 41slump salesection 32(1)(ii)

Judgments citing CIT v. Sugauli Sugar Works (P) Ltd.

Commissioner of Income Tax-V vs. M/S Radhika Creation

The appeal is dismissed

ITA-692/2009HC Delhi30 Apr 2010
For Appellant: Mr Sanjeev SabharwalFor Respondent: Mr Anuj Agarwal with Mr Sumit Batra
Section 142Section 158Section 41(1)Section 69Section 69CSection 80

…oth the parties, perused the records and considered the matter carefully. Liability does not get extinguished merely because the period of limitation for enforcing the claim has expired as held by the Hon‟ble Supreme Court in case of Sagauli Sugar Works (236 ITR 518). There is no material brought on record by the A.O. to show that liability had ceased to exist during the relevant year. Moreover, this is a case of block assessment in which undisclosed income can be determined only on the basis of material found during search. There was no material found during search to show that liability was either…

Commissioner of Income Tax-V vs. M/S Radhika Creation

The appeal is dismissed

ITA/692/2009HC Delhi30 Apr 2010
For Appellant: Mr Sanjeev SabharwalFor Respondent: Mr Anuj Agarwal with Mr Sumit Batra
Section 142Section 158Section 41(1)Section 69Section 69CSection 80

…oth the parties, perused the records and considered the matter carefully. Liability does not get extinguished merely because the period of limitation for enforcing the claim has expired as held by the Hon‟ble Supreme Court in case of Sagauli Sugar Works (236 ITR 518). There is no material brought on record by the A.O. to show that liability had ceased to exist during the relevant year. Moreover, this is a case of block assessment in which undisclosed income can be determined only on the basis of material found during search. There was no material found during search to show that liability was either…

Chief Commnr. of Income Tax, Cochin vs. M/S. Kesaria Tea Co. Ltd

C.A. No.-001581-001581 - 2001Supreme Court19 Mar 2002
For Respondent: M/S. KESARIA TEA CO. LTD
Section 256(1)Section 41(1)

…unilateral action on the part of the assessee by way of writing-off the liability in its accounts does not necessarily mean that the liability ceased in the eye of law. In fact, this is the view taken by this Court in CIT vs. Suguli Sugar Works (P) Ltd. [236 ITR 518]. We, therefore, find no substance in the contention advanced on behalf of the appellant. Incidentally, we may mention that the controversy relates to the period anterior to the introduction of Explanation 1 to Section 41(1). The decision of this Court in Commissioner of Income Tax Vs. T.V. Sundaram Iyengar and Sons Ltd. [2…