Liquidator, Mysore Agencies (P.) Ltd. v. CIT)

114 ITR 853High Court1978#8694 most cited

What is Liquidator, Mysore Agencies (P.) Ltd. v. CIT) authority for?

For Section 41(1) to apply, the department must prove that the assessee obtained an amount or benefit by way of remission or cessation of a prior expenditure or trading liability in a subsequent year. Merely showing that a liability has become time-barred does not automatically prove its cessation for the purpose of Section 41(1).

12

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2010 to 2024.

Also referred to as

Liquidator Mysore Agencies · CIT v. Mysore Agencies · Section 41(1) · cessation of liability · remission of liability · time-barred debt · sundry creditors · trading liability · assessment year · income tax act

Sections most often in play

Section 133(6)Section 142(1)Section 143(3)Section 271(1)(c)Section 41(1)

Issues it is cited on

section 41(1)section 41disallowance of interest expenditurebusiness expediencysundry creditorssection 44asection 40a(3)section 36(1)(iii)commercial expediencysection 44abdisallowance under section 14asection 40a

Judgments citing Liquidator, Mysore Agencies (P.) Ltd. v. CIT)

Dy. Commissioner of Income Tax, Pune vs. Indus Biotech Private Limited, Pune

Appeal is dismissed

ITA 863/PUN/2023[2018-19]Status: DisposedITAT Pune22 Oct 2024AY 2018-19

Bench: Shri R.K. Panda & Shri S.S. Godara"नधा"रण वष" / Assessment Year : 2018-19 Dcit, Vs. Indus Biotech Pvt. Ltd. Circle-1(1), 1, Rahul Residency, Pune Plot Nos.6 & 7, Off Salunke Vihar Road, Kondhwa, Kondhwa Bk B.O., Pune – 411048 Maharashtra Pan: Aaaci5708E Appellant Respondent

Section 143(3)Section 250Section 41(1)

…med or credit balance has been remitted, addition cannot be made u/s 41 (1) in view of the following decisions: • Steel and General Mills Co. Ltd vs CIT 96 ITR 438 (Del) • CIT vs Nathubhai Desha Bhai 130 ITR 238 (MP) • Liquidator, Mysore Agencies P Ltd vs CIT 114 ITR 853(Karn) • K.V. MoosaKoya & Co vs CIT 175 ITR 120,124 (Ker) • CIT vs Pranlal P Doshi 201 ITR 756 (Guj) 8.4 The third burden which was on A.O. was to establish that cessation if at all has happened, has happened in the year under appeal. After all, liability to tax can be fixed in the year to which it pertains and to no other year. Merely because A.…

Saket Agarwal, Jaipur vs. ITO Ward 2(3) Jaipur, Jaipur

In the result appeal filed by the assessee is allowed

ITA 646/JPR/2024[2014-15]Status: DisposedITAT Jaipur01 Oct 2024AY 2014-15

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Ms. Satwika Jhan, AdvFor Respondent: Ms. Alka Gautam (CIT) a
Section 143(2)Section 143(3)Section 271(1)(c)Section 41(1)

…assed by the ITAT and, therefore, no substantial questions of law arose from the order of the ITAT. [Para 5] In the result, the revenue's appeal was to be dismissed. [Para 6]  Hon’ble Karnataka High Court inLiquidator, Mysore Agencies (P.) Ltd. v. CIT [1978] 114 ITR 853 (Karnataka)has held: A reading of section 41(1) shows that where any amount has been treated as an expenditure or trading liability in the assessment for any year and in a subsequent year the assessee has obtained any amount or benefit either in cash or in any other manner in respect of such expenditure or liability by way of remission or cessati…

Assistant Commissioner of Income-Tax, Circle-2(1)(1), Vadodara vs. Oriental Enterprises Private Limited, Pcc Notified Area

ITA 807/AHD/2023[2018-19]Status: DisposedITAT Ahmedabad27 Aug 2024AY 2018-19

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar

For Appellant: Shri Vartik Chokshi, ARFor Respondent: Shri Ashok Natha Bhalekar, Sr.DR
Section 143(3)Section 36(1)(va)Section 37

…oking Section 41(1) of the Act. The Ld.CIT(A) noted that even when a debt becomes time-barred, the liability does not cease. The Ld.CIT(A) placed reliance on the decision(s)of the Hon’ble Kerala High Court (Liquidator, Mysore Agencies (P.) Ltd. v. CIT) [1978] 114 ITR 853 and the Hon’ble Bombay High Court (CIT v. Chase Bright Steel Ltd (No.2)) [1989] 177 ITR 128. The Ld.CIT(A) relied on the decision of Hon’ble Gujarat High Court in the case of CIT-Il v. Nitin S. Garg [2012] 22 taxmann.com 59, which supports the view that liabilities shown in the balance sheet cannot be presumed to have ceased. The Ld.CIT(A) emphas…

Assistant Commissioner of Income-Tax, Circle 2(1)(1), Vadodara vs. Oriental Enterprises Private Limited, Pcc Notified Area

ITA 732/AHD/2023[2016-17]Status: DisposedITAT Ahmedabad27 Aug 2024AY 2016-17

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar

For Appellant: Shri Vartik Chokshi, ARFor Respondent: Shri Ashok Natha Bhalekar, Sr.DR
Section 143(3)Section 36(1)(va)Section 37

…oking Section 41(1) of the Act. The Ld.CIT(A) noted that even when a debt becomes time-barred, the liability does not cease. The Ld.CIT(A) placed reliance on the decision(s)of the Hon’ble Kerala High Court (Liquidator, Mysore Agencies (P.) Ltd. v. CIT) [1978] 114 ITR 853 and the Hon’ble Bombay High Court (CIT v. Chase Bright Steel Ltd (No.2)) [1989] 177 ITR 128. The Ld.CIT(A) relied on the decision of Hon’ble Gujarat High Court in the case of CIT-Il v. Nitin S. Garg [2012] 22 taxmann.com 59, which supports the view that liabilities shown in the balance sheet cannot be presumed to have ceased. The Ld.CIT(A) emphas…

Oriental Enterprise Private Limited, Vadodara vs. The ACIT, Circle-2(1)(2), Vadodara

ITA 661/AHD/2023[2016-17]Status: DisposedITAT Ahmedabad27 Aug 2024AY 2016-17

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar

For Appellant: Shri Vartik Chokshi, ARFor Respondent: Shri Ashok Natha Bhalekar, Sr.DR
Section 143(3)Section 36(1)(va)Section 37

…oking Section 41(1) of the Act. The Ld.CIT(A) noted that even when a debt becomes time-barred, the liability does not cease. The Ld.CIT(A) placed reliance on the decision(s)of the Hon’ble Kerala High Court (Liquidator, Mysore Agencies (P.) Ltd. v. CIT) [1978] 114 ITR 853 and the Hon’ble Bombay High Court (CIT v. Chase Bright Steel Ltd (No.2)) [1989] 177 ITR 128. The Ld.CIT(A) relied on the decision of Hon’ble Gujarat High Court in the case of CIT-Il v. Nitin S. Garg [2012] 22 taxmann.com 59, which supports the view that liabilities shown in the balance sheet cannot be presumed to have ceased. The Ld.CIT(A) emphas…

ACIT Circle-7(1), New Delhi vs. Delmos Aviation Pvt. Ltd., New Delhi

In the result, Appeal filed by the Revenue is partly allowed for statistical purpose

ITA 7894/DEL/2019[2016-17]Status: DisposedITAT Delhi06 Oct 2023AY 2016-17

Bench: or during the hearing of this appeal.”

Section 143(3)Section 14ASection 41Section 68

…tion cannot be made u/s 41 (1) in view of the following decisions: Page 7 of 17 ACIT vs. Delmos Aviation Pvt. Ltd. • Steel and General Mills Co. Ltd vs CIT 96 ITR 438(Del) CIT vs Nathubhai Desha Bhai 130 ITR 238 (MP) Liquidator, Mysore Agencies P Ltd vs CIT 114 ITR 853(Karn) K.V. Moosa Koya & Co vs CIT 175 ITR 120,124(Ker) CIT vs Pranlal P Doshi 201 ITR 756(Guj). 6.8 The third burden which was on A.O. was to establish that cessation if at all has happened, has happened in the year under appeal. After all, liability to tax can be fixed in the year to which it pertains and to no other year. Liability to tax any…

Dharamtar Motors Services Petroleum Product, Ahmedabad vs. The ITO, Ward-6(1)(4), Ahmedabad

In the results, both the appeals of the assessee are allowed

ITA 1438/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad21 Nov 2019AY 2012-13

Bench: Shri Mahavir Prasad & Shri Waseem Ahmedआयकर अपील सं./Ita Nos. 1438 & 2534/Ahd/2017 "नधा"रण वष"/Asstt. Year: 2012-2013 M/S Dharamtar Motor Services Income Tax Officer, Petroleum Product, Vs. Ward 6(1)(4) C/O. Ketan H. Shah, Advocate 903, Ahmedabad. Sapphire Complex, C.G. Road, Navrangpura, Ahmedabad. Pan: Aabfd9182F

For Respondent: Shri L.P. Jain, Sr. D.R
Section 271(1)(c)Section 68

…22, page 18, CIT(A) has given factual aspect regarding introduction of two new partners namely Subhash Desai and Kalpesh Gilder. In para 5.24, he admits that sec. 68 is not applicable. Thereafter, in para 5.25, he applied sec. 41(1) after making reliance upon 114 ITR 853(Kar), 62 ITR 34 (Bom) and 55 CTR 218 (Cal). In para 5.26, he referred sec. 41(1) to the whole amount of Rs. 2,59,33,030/-. It is strongly stated that in view of the following judgments, sec. 41(1) is not applicable to the facts as narrated herein above. 4. The case law in reference to sec. 41(1) are as under: - • Satpal & Sons Delhi ITAT 166 ITD…

Sh. Lok Nath Narang, Prop, New Delhi vs. ITO, Gurgaon

ITA 6708/DEL/2014[2009-10]Status: DisposedITAT Delhi03 Jan 2019AY 2009-10

Bench: Shri N. K. Billaiya & Ms Suchitra Kamblelok Nath Narang, Prop. Vs Ito C/O. M/S. Rra Tax India, Ward-2(1) D-28, South Extension, Part-I Gurgaon New Delhi Pan : Adrpn8014H

Section 133(6)Section 142(1)Section 143(1)Section 143(2)Section 234ASection 41(1)Section 68

…t balance has been remitted, addition cannot be made u/s 41(1) in view of the following decisions : i. Steel and General Mills Co. Ltd. vs. CIT 96 ITR 438 (Del) ii. CIT vs. Nathubhai Desha Bhai 130 ITR 238 (MP) iii. Liquidator, Mysore Agencies P. Ltd. vs. CIT 114 ITR 853 (Karn) iv. K.V.Moosa Koya & Co vs. CIT 175 ITR 120, 124 (Ker) v. CIT vs. Pranlal P Doshi 201 ITR 756 (Guj) 7. The Ld. AR submitted that the Assessing Officer failed to establish that cessation if at all has happened, has happened in the year under appeal as held by Delhi Bench of Tribunal in the case of Madan Lal Brothers. After all, liability t…

Anil Kumar Dangayach HUF, Jaipur vs. ITO, Jaipur

In the result, appeal of the assessee is allowed

ITA 976/JPR/2016[2012-13]Status: DisposedITAT Jaipur20 Mar 2018AY 2012-13

Bench: Or At The Time Of Hearing.

For Appellant: Shri S.L. Poddar &For Respondent: Shri L.R. Meena (CIT)
Section 41(1)Section 44A

…34 (Bom.), Gannon Dunkerley & Co. Ltd. v. CIT [1976] 102 ITR 428 (Bom.), CIT v. Sadabhakti Prakashan Printing Press (P.) Ltd. [1980] 125 ITR 326 (Bom.), CIT v. V.T. Kuttappu & Sons [1974] 96 ITR 327 (Ker.), Liquidator, Mysore Agencies (P.) Ltd. v. CIT [1978] 114 ITR 853 (Kar.), CIT v. Sugauli Sugar Works (P.) Ltd. [1983] 140 ITR 286 (Cal.), Bijli Cotton Mill (P.) Ltd. v. CIT [1971] 81 ITR 400 (All.) and Bhagwat Prasad & Co. v. CIT [1975] 99 ITR 111 (All.). 4. The learned counsel for the revenue placed reliance on a decision of the Allahabad High Court in Indian Motor Transport Co. v. CIT [1978] 114 ITR 677. In o…

ITO 2(1)(2), Mumbai vs. Chemical & Alkali Distributors Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 6274/MUM/2013[2007-08]Status: DisposedITAT Mumbai20 Nov 2015AY 2007-08

Bench: Shri R.C. Sharma & Shri Amarjit Singh

For Appellant: Shri Anju KisnadwalaFor Respondent: Shri T. Roumuan Paite
Section 143(3)Section 41Section 41(1)

…y gives up the claim. It is a positive act of the creditor. The cessation of the liability arises only when such liability ceases to exist in the eye of law for all intents and purposes [Liquidator, Mysore Agencies Pvt. Ltd. VS.CIT 1978 CTR (Kar) 284 : (1978) 114 ITR 853 (Kar) The cessation of the liability may occur either by reason of operation of law, i.e., on the liability becoming unenforceable at law by the creditor and the debtor declaring unequivocally his intention not to honour his liability when payment is demanded by the creditor, or a contract between the parties or by the discharge of the debt-the d…

CIT vs. Chipsoft Technology Pvt Ltd

The appeal is allowed in the

ITA/598/2011HC Delhi20 Jul 2012

Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE R.V.EASWAR

Section 41Section 41(1)

…become time-barred. (J.K. Chemicals Ltd. v. CIT [1966] 62 ITR 34 (Bom), CIT v. Sadabhakti Prakashan Printing Press (P.) Ltd. [1980] 125 ITR 326 (Bom), CIT v. V.T. Kuttappu & Sons [1974] 96 ITR 327 (Ker), Liquidator, Mysore Agencies Pvt. Ltd. v. CIT [1978] 114 ITR 853 (Kar), and Bhagwat Prasad & Co. v. CIT [1975] 99 ITR 111 (All). It was also held in those judgments that the mere fact that the assessee did not show the amount as his trading liability in his account books did not affect the consequence since such unilateral act of the assessee was neither remission nor cessation of his trading liability.…

Income Tax vs. M/S. Dalmia Finance Ltd

Accordingly, present appeal, being devoid of merit, is dismissed

ITA/833/2010HC Delhi15 Jul 2010
Section 260ASection 41(1)

…as income of the assessee u/s 41(1) without considering nature of liability shown or without referring to any evidence or making out any case of cessation of liability in the relevant period. In the case of Liquidator, Mysore Agencies Pvt. Ltd. Vs. CIT 114 ITR 853, their lordships observed as under:- “Hence, in order to bring a case under section 41(1), it has to be shown by the department that there has been remission or cessation of the liability. The remission of the liability arises when the creditor voluntarily gives up the claim. The cessation of such liability arises only when it ceases to…

Liquidator, Mysore Agencies (P.) Ltd. v. CIT) (114 ITR 853) — Cited in 12 Judgments | BharatTax