“Section 41(1)”

Section References (mined)Section 41Section 41(1)883 judgments

The decision most relied on for Section 41(1) is Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT (227 ITR 172), cited in 621 judgments on BharatTax.

Leading authorities on Section 41(1)

Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT

227 ITR 172 · 1997 · Supreme Court

621

citing judgments

Interest income earned on deposits, particularly before the commencement of business operations or as a requirement for business licensing, is taxable as "income from other sources" under Section 56, and cannot be treated as business income or set off against interest on borrowed funds.

CIT v. T.V. Sundaram Iyengar & Sons Ltd.

222 ITR 344 · 1996 · Supreme Court

223

citing judgments

Unclaimed deposits received in the course of trading transactions and sundry credit balances written back are taxable as business income under Section 41(1) of the Income-tax Act, 1961, as they constitute a cessation of trading liability.

CIT v. Indo Nippon Chemicals Co. Ltd.

261 ITR 275 · 2003 · Supreme Court

204

citing judgments

A liability recognized in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI) is an allowable expense for income tax purposes.

CIT v. Sugauli Sugar Works (P) Ltd.

236 ITR 518 · 1999 · Supreme Court

203

citing judgments

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.

CIT v. Mahindra & Mahindra Ltd.

404 ITR 1 · 2018 · Supreme Court

164

citing judgments

The waiver of a loan taken for acquiring capital assets is considered a capital receipt and is not taxable as income under Section 28(iv) of the Income Tax Act. The ruling distinguishes between the waiver of trading liabilities and capital liabilities for tax purposes.

Mahindra & Mahindra Ltd. v. CIT

261 ITR 501 · 2003 · High Court

147

citing judgments

Section 41(1) of the Income-tax Act cannot be invoked if the assessee has not been granted a deduction for the relevant liability in earlier years.

Prakash Cotton Mills Pvt. Ltd. v. CIT

201 ITR 684 · 1993 · Supreme Court

133

citing judgments

Compensatory interest or damages paid for a breach of contract, arising in the normal course of business, are allowable as a deduction under section 37(1) as wholly and exclusively incurred for business purposes. This principle extends to indirect taxes paid in the course of business, which are admissible as business expenditure.

CIT v. Oswal Agro Mills Ltd.

341 ITR 467 · 2012 · High Court

108

citing judgments

The Legislature abolished terminal depreciation under section 32(1)(iii) and the taxing of balancing charge under section 41(2), replacing these provisions with the requirement to reduce sale proceeds of depreciable assets from the block of assets.

Judgments citing Section 41(1)

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

The appeals of the assessee are disposed of as below:

ITA 2910/CHNY/2024[2016-2017]Status: DisposedITAT Chennai26 Aug 2025AY 2016-2017

Bench: Shri Aby T Varkey & Shri S. R. Raghunatha

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

ory sicia efter, ‘wv arais, tag IN THE INCOME TAX APPELLATE TRIBUNAL ‘f’ BENCH, CHENNAI Hu A aol, ats wae

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

In the result the appeals of the assessee are disposed of as below:

ITA 2853/CHNY/2024[2015-2016]Status: DisposedITAT Chennai26 Aug 2025AY 2015-2016

Bench: Shri Aby T Varkey & Shri S. R. Raghunathaआयकर अपील सं./Ita Nos.: 2850,2851,2852 & 2853/Chny/2024, 2910, 2911 & 2912/Chny/2024 धनिाारण वर्ा / Assessment Years: 2012-13, 2013-14, 2014-15, 2015-16, 2016-17, 2017-18 & 2018-19 Sundaram Sankar Anand, The Assistant Commissioner Of No.63-B-7, Mayanur, Vs Income Tax, M Kaspa Sandai Peatai, . Central Circle – 2, Coimbatore. Krishnarayapuram Taluk, Karur – 639 102 [Pan:Bvips-1149-E] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant By : Shri. V. Alagappa, C.A. प्रत्यथी की ओर से/Respondent By : Mr. M.Murali, Cit (Virtual) सुनवाई की तारीख/Date Of Hearing : 25.06.2025 घोर्णा की तारीख/Date Of Pronouncement : 26.08.2025 आदेश /O R D E R Per S. R. Raghunatha, Am:

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

आयकर अपीलीय अधिकरण, ‘ए’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI श्री एबी टी वर्की, न्यायिर्क

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

In the result the appeals of the assessee are disposed of as below:

ITA 2851/CHNY/2024[2013-2014]Status: DisposedITAT Chennai26 Aug 2025AY 2013-2014

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

In the result the appeals of the assessee are disposed of as below:

ITA 2850/CHNY/2024[2012-2013]Status: DisposedITAT Chennai26 Aug 2025AY 2012-2013

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

Yogesh Raghavji Mehta, Mumbai vs. Income Tax Officer Ward 41(4)(4), Mumbai

In the result, appeal filed by the assessee is allowed for statistical purposes

ITA 4494/MUM/2025[2012-13]Status: DisposedITAT Mumbai21 Aug 2025AY 2012-13

Bench: Shri Om Prakash Kant & Shri. Raj Kumar Chauhanyogesh Raghavji Mehta Vs. Ito Ward 41(4)(4) Opp. Devi Mandir, Devi Gully, Kautilya Bhavan, Carnac Bunder, Mumbai-400 009 Mumbai-400 051 Pan: Aabpm4679A (Appellant) (Respondent)

Section 142(1)Section 143(2)Section 143(3)Section 250Section 41(1)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI. RAJ

Dy Commissioner of Income Tax Circle 7 Pune, Pune vs. Kumar Housing Corporation Private Limited, Pune

In the result, both the appeals filed by the assessee are allowed and the appeal filed by the Revenue is dismissed

ITA 341/PUN/2025[2013-14]Status: DisposedITAT Pune18 Aug 2025AY 2013-14

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2013-14

For Appellant: Shri Nikhil S PathakFor Respondent: Shri Ramnath P Murkunde

Section 143(2)Section 32Section 36(1)(iii)

transactions were eight to nine years old, Assessing Officer erred in treating amount due to creditors as assessee's income and added under section 41(1). In view of the binding decision of the jurisdictional High Court cited (supra), the order of the Ld. CIT(A)/ NFAC in our opinion

Kumar Urban Development Pvt. Ltd (Successor Kumar Housing Corpn. Pvt Ltd), Pune vs. DCIT Circle 14, Pune

In the result, both the appeals filed by the assessee are allowed and the appeal filed by the Revenue is dismissed

ITA 2875/PUN/2024[2013-14]Status: DisposedITAT Pune18 Aug 2025AY 2013-14

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2013-14

For Appellant: Shri Nikhil S PathakFor Respondent: Shri Ramnath P Murkunde

Section 143(2)Section 32Section 36(1)(iii)

Kumar Urban Development Pvt. Ltd (Successor Kumar Housing Corporation Pvt Ltd), Pune vs. DCIT Circle 14, Pune

In the result, both the appeals filed by the assessee are allowed and the

ITA 2874/PUN/2024[2014-15]Status: DisposedITAT Pune18 Aug 2025AY 2014-15

Bench: Shri R. K. Panda & Ms. Astha Chandra

For Appellant: Shri Nikhil S PathakFor Respondent: Shri Ramnath P Murkunde

Section 143(2)Section 32Section 36(1)(iii)

Upendra Kumar Soni, Kota vs. ACIT, Central Corcle-Kota, Kota

In the result, both the appeals of the assesee are allowed for statistical purposes

ITA 827/JPR/2025[2018-19]Status: DisposedITAT Jaipur11 Aug 2025AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

For Appellant: Shri Saurav Harsh, AdvocateFor Respondent: Mrs. Alka Gautam, CIT-DR

Section 144Section 145(3)Section 153ASection 68Section 69A

year under consideration. Further, argument of the assessee was that there was no remission or cessation of liability as required under section 41(1) and, thus, the Assessing Officer was not justified in adding those amounts. As rightly highlighted by the Commissioner (Appeals), the assessee had provided a balance sheet ... year under consideration. Further, argument of the assessee was that there was no remission or cessation of liability as required under section 41(1) and, thus, the Assessing Officer was not justified in adding those amounts. As rightly highlighted by the Commissioner (Appeals), the assessee had provided a balance sheet

Upendra Kumar Soni, Kota vs. ACIT, Central Circle-Kota, Central Circle, Kota

In the result, both the appeals of the assesee are allowed for statistical purposes

ITA 826/JPR/2025[2017-18]Status: DisposedITAT Jaipur11 Aug 2025AY 2017-18

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

For Appellant: Shri Saurav Harsh, AdvocateFor Respondent: Mrs. Alka Gautam, CIT-DR

Section 144Section 145(3)Section 153ASection 68Section 69A

Peach Tree Investments Pvt Ltd, Mumbai vs. Income Tax Officer-3(2)(4), Mumbai

In the result, appeal of the assessee is allowed for statistical purposes

ITA 2000/MUM/2024[2012-13]Status: DisposedITAT Mumbai11 Aug 2025AY 2012-13

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Sandeep Singh Karhail, Hon’Ble

For Appellant: Shri Rajkumar Singh, A/RFor Respondent: Mr. Virabhadra S. Mahajan, Sr. D/R

Section 143(3)Section 147Section 148Section 41(1)

never been claimed as deduction from income or receipt in any earlier years. The said addition does not come under the purview of section 41(1) as the amount is in fact a financial liability and was never claimed by or allowed to the Assessee Company as expenses or loss

Dy. Commissioner of Income Tax Circle 10(1), Delhi, Cr Building vs. Indus Towers Limited, Gurgram

ITA 2805/DEL/2023[2011-12]Status: DisposedITAT Delhi08 Aug 2025AY 2011-12

Bench: Shri Yogesh Kumar U.S & Shri Manish Agarwal

Section 142Section 143(3)

ITA Nos.2607 & 2805/Del/2023 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “C” BENCH: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL

Indus Towers Ltd., Gurugram, Haryana vs. Deputy Commissioner of Income-Tax, Circle 12(1), New Delhi

ITA 2607/DEL/2023[2011-12]Status: DisposedITAT Delhi08 Aug 2025AY 2011-12

Bench: Shri Yogesh Kumar U.S & Shri Manish Agarwal

Section 142Section 143(3)

ITA Nos.2607 & 2805/Del/2023 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “C” BENCH: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL

Shri Giriraj Ply N Board Industries Ltd., Ahmedabad vs. The ITO, Ward-2(1)(1) Now Ward-4(1)(1), Vadodara

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 1234/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad07 Aug 2025AY 2016-17

Bench: Dr. B.R.R. Kumar, Vice-Shri Siddhartha Nautiyalshri Giriraj Ply N Board Income Tax Officer, Vs. Industries Ltd., Ward-2(1)(1), G-6, Word Business House, Vadodara. Near Parimal Garden, (Now Ward-4(1)(1)) Elis Bridge, Ahmedabad. Ahmedabad-380006. [Pan :Aabcg2319 Q] (Appellant) .. (Respondent) Appellant By : Shri Anil Kshatriya With Shri Alay Anil Kshatriya, Ars Respondent By: Shri Prateek Sharma, Sr. Dr Date Of Hearing 06.08.2025 Date Of Pronouncement 07.08.2025

For Appellant: Shri Anil Kshatriya with Shri Alay Anil Kshatriya, ARsFor Respondent: Shri Prateek Sharma, Sr. DR

Section 250Section 41(1)

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER

Indian Overseas Bank, Chennai vs. DCIT, Non Corporate Circle-8(1), Chennai

ITA 3084/CHNY/2024[2021-22]Status: DisposedITAT Chennai07 Aug 2025AY 2021-22

Bench: Ms Padmavathy S, Am & Shri Manu Kumar Giri, Jm

For Appellant: Mr. C. Naresh, C.A

Section 143(3)Section 263

approved amount for expenditure without having balance liability on account of such expenditure in the Balance sheet, the question of applying section 41(1) of the Act based on the write off made by the vendors does not arise. 6.8 Therefore, the findings of the ld.PCIT on these two issues

Indian Overseas Bank, Chennai vs. DCIT, Non Corporate Circle-8(1), Chennai

ITA 3083/CHNY/2024[2020-21]Status: DisposedITAT Chennai07 Aug 2025AY 2020-21

Bench: Ms Padmavathy S, Am & Shri Manu Kumar Giri, Jm

For Appellant: Mr. C. Naresh, C.A

Section 143(3)Section 263

Hollister Medical India Private Limited, Delhi vs. DCIT, Circle 10(1), Delhi

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 5352/DEL/2024[2021-22]Status: DisposedITAT Delhi07 Aug 2025AY 2021-22

Bench: Shri M. Balaganesh & Shri Sudhir Pareekhollister Medical India Pvt. Ltd, Vs. Dcit, C-8/7, Lawrence Road, Keshav Circle-10(1), Puram, Delhi New Delhi (Appellant) (Respondent) Pan:Aabch8555K

For Appellant: Ms. Anita Barur, ARFor Respondent: Shri Dharam Veer Singh, CIT (DR)

Section 143(1)Section 143(1)(a)Section 143(3)Section 144C(5)Section 154Section 234ASection 234BSection 234CSection 41Section 41(1)

addition to the tune of Rs. 1,03,05,142/-, being certain liabilities written back, and treating the same as profit taxable under section 41(1) of the Act. 2.2 The Ld. AO failed to appreciate that the said amounts were already credited to Profit & Loss account for the year

Deputy Commissioner of Income Tax, Circle-3(1)(1), Bengaluru vs. Infosys Limited, Bengaluru

In the result, appeal filed by the assessee is partly allowed and the appeal filed by the revenue is dismissed

ITA 245/BANG/2024[2019-20]Status: DisposedITAT Bangalore06 Aug 2025AY 2019-20

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2019-20

For Appellant: Sri Padam Chand Khincha – CAFor Respondent: Smt. Srinandini Das – CIT - DR

Section 1Section 10ASection 155Section 250

reimbursement thereof in the form of insurance claim and incentives from airlines are to be regarded as business income under section 41(1) of the Act and consequently these incomes are also eligible for deduction under section 10AA of the Act. Similarly, having allowed the deduction under section 10AA

Infosys Limited, Bangalore vs. Deputy Commissioner of Income-Tax, Circle-3(1)(1), Bangalore

ITA 881/BANG/2023[2019-20]Status: DisposedITAT Bangalore06 Aug 2025AY 2019-20

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

Section 1Section 10ASection 155Section 250

ITA No.881/Bang/2023 ITA No.245/Bang/2024 Infosys Limited IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT

Deputy Commissioner of Income Tax, Circle-1(1), New Delhi, Delhi vs. Aadharshilla Contractors Pvt Ltd, Delhi

In the result, the grounds raised by the Revenue are dismissed

ITA 4208/DEL/2024[2018-19]Status: DisposedITAT Delhi06 Aug 2025AY 2018-19

Bench: Shri Challa Nagendra Prasad & Shri S. Rifaur Rahmanaadharshilla Contractors Private Limited, Vs. Dcit, Circle 1 (1), 2Nd Floor, Shahdara Metro Station, Delhi. Parsvnath Tower, Delhi – 110 032. (Pan : Aaeca3452D) Dcit, Circle 1 (1), Vs. Aadharshilla Contractors Private Limited, 2Nd Floor, Shahdara Metro Station, Delhi. Parsvnath Tower, Delhi – 110 032. (Pan : Aaeca3452D) (Appellant) (Respondent) Assessee By : Shri Rajat Jain, Ca Shri Akshat Jain, Ca Revenue By : Shri Ajay Kumar Arora, Sr. Dr Date Of Hearing : 28.05.2025 Date Of Order : 06.08.2025 O R D E R

For Appellant: Shri Rajat Jain, CAFor Respondent: Shri Ajay Kumar Arora, Sr. DR

loan of Rs.3,00,00,000/- and interest payable of Rs.1,83,18,516/- aggregating to Rs.4,83,18,516/- was made under section 41(1) r.w.s. 28(iv) of the Act merely on the basis of unsigned ledger account sent by lender in response to notice ... fact that cessation of liability has not been made by the assessee company which is sine qua non for invoking provisions of Section 41(1) of the Act. 22. The ld. AR further argued that it has not written off the liability of Rs.4,83,18,516/- in respect