“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)

Aadharshilla Contractors Private Limited, Shahdara, Delhi vs. Deputy Commissioner of Income Tax, Circle 1(1), Delhi

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

ITA 4137/DEL/2024[2017-18]Status: DisposedITAT Delhi06 Aug 2025AY 2017-18

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

Sotc Travel Limited, Mumbai vs. DCIT Circle 3(3)(1), Mumbai

In the result, the ground is allowed for statistical purposes

ITA 3758/MUM/2025[2023-24]Status: DisposedITAT Mumbai05 Aug 2025AY 2023-24

Bench: Shri Vikram Singh Yadav & Shri Sandeep Gosainassessment Year : 2023-24 Sotc Travel Limited, Dcit, Circle-3(3)(1), 13Th Floor, Aayakar Bhavan, Marathon Futurex, Vs. Maharshi Karve Road, Nm Joshi Marg, New Marine Lines, Delisle Road, S.O., Mumbai-400020. Lower Parel, Mumbai-400013. Pan : Aagcs6725D (Appellant) (Respondent) Assessee By : Ms. Pratiksha P.Jain Revenue By : Shri Swapnil Choudhary Date Of Hearing : 31-07-2025 Date Of Pronouncement : 05-08-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Order Of The Learned Addl/Jcit(A)-2, Kolkata [„Ld.Cit(A)‟], Dated 29-03-2025, Pertaining To Assessment Year (Ay) 2023-24. 2. During The Course Of Hearing, The Ld.Ar Taken Us Through Ground No.2 Of The Assessee‟S Appeal & Submitted That The Addl/Jcit(A) Has Erred In Sustaining The Action Of The Ao/Cpc, In Making The Addition Of Rs.18,11,71,802/- U/S. 41(1) Of The Act, Without Appreciating That The Said Amount Has Already Been Considered By The Assessee While Filing Its Return Of Income & The Same Resulted In Double Taxation. In This Regard, Our

For Appellant: Ms. Pratiksha P.JainFor Respondent: Shri Swapnil Choudhary

Section 143(1)(a)Section 41(1)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “G” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SANDEEP

Dy..C.I.T., Bangalore vs. M/S State Bank of Mysore, Bangalore

In the result, the appeal of the Revenue Ground-3 is dismissed

ITA 683/BANG/2015[2010-11]Status: DisposedITAT Mumbai05 Aug 2025AY 2010-11

Bench: Shri Narendra Kumar Billaiya, Account Member & Shri Anikesh Banerjee

For Appellant: Shri Ketan Ved & Ninad PatadeFor Respondent: Shri P.C. Chhotaray, Spl. Counsel

Section 143(3)Section 250Section 36(1)(vii)Section 36(1)(viia)Section 41(1)Section 41(4)

erred in upholding the addition of the recoveries from bad debts written off in earlier years amounting to Rs.13,01,85,558 under section 41(1) of the Income-tax Act, 1961 ('the Act'). b) The learned CIT(A) ought to have appreciated that the Appellant bank has not claimed ... past years. c) The learned CIT(A) ought to have appreciated that in order to tax the recovery of the bad debts under section 41(1) of the Act, the condition ought to be satisfied is that the said bad debts should have been claimed as deduction (in the year

State Bank of Mysore, Bangalore vs. JCIT, Bangalore

In the result, the appeal of the Revenue Ground-3 is dismissed

ITA 660/BANG/2015[2010-11]Status: DisposedITAT Mumbai05 Aug 2025AY 2010-11

Bench: Shri Narendra Kumar Billaiya, Account Member & Shri Anikesh Banerjeestate Bank Of India Vs Joint Commissioner Of Income-Tax, (Erstwhile State Bank Of Large Tax Payers Unit, Bangalore Mysore Prior To Merger) Local Head Office Compliance Department, 4Th Floor, 65, St. Marks Road, Bangalore-560 001 Pan: Aaccs0155P Appellant Respondent Deputy Commissioner Of Vs State Bank Of Mysore Income-Tax, Ltu, Circle-1, Head Office, Finance & Accounts Bangalore Department, Kg Road, Bangalore- 560 009 Pan: Aaccs0155P Appellant Respondent

For Appellant: Shri Ketan Ved & Ninad PatadeFor Respondent: Shri P.C. Chhotaray, Spl. Counsel

Section 143(3)Section 250Section 36(1)(vii)Section 36(1)(viia)Section 41(1)Section 41(4)

upholding the addition of the recoveries from bad debts written off in earlier years amounting to Rs. 13,01,85,558 under section 41(1) of the Income-tax Act, 1961 ('the Act'). b) The learned CIT(A) ought to have appreciated that the Appellant bank has not claimed ... past years. c) The learned CIT(A) ought to have appreciated that in order to tax the recovery of the bad debts under section 41(1) of the Act, the condition ought to be satisfied is that the said bad debts should have been claimed as deduction (in the year

Indur Thanwerdas Dadlani, Mumbai vs. The Principal Commissioner of Income Tax PCIT, Mumbai-42, Mumbai

In the result, the appeal filed by the assessee stands allowed without any order as to cost

ITA 2476/MUM/2025[2020-21]Status: DisposedITAT Mumbai04 Aug 2025AY 2020-21

Bench: Hon’Ble Shri Sandeep Gosain & Shri Prabhash Shankarindur Thanwerdas Dadlani Vs. Pr. Cit Flat No. 4604, The Imperial Mumbai – 42 Towers, Mp Mill Compound, Room No. 741, Aayakar Bb Nakashe Marg, Mardeo, Bhavan, Mk Road, Mumbai – 400034. Mumbai Pan/Gir No. Aacpd5262D (Applicant) (Respondent)

Section 142(1)Section 143(2)Section 263Section 57Section 74

present case, must be decided with reference to the principles which have been laid down by the Supreme Court and by this Court. Section 41(1) provides that where an allowance or deduction has been made in the assessment for any year in respect of a loss, expenditure or trading ... issue on which a possible view was that there was no final or irrevocable remission or cessation of liability, within the meaning of section 41(1) of the Act, during assessment year 1982-83. This view could not, by any stretch of logic, be regarded as being unsustainable

M/S. Douceur Sportswear Mfg. Co. Pvt Ltd, Mumbai vs. Assistant Commissioner of Income Tax -15(1)(2), Mumbai

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

ITA 1909/MUM/2025[2012-13]Status: DisposedITAT Mumbai31 Jul 2025AY 2012-13

Bench: Shri Sandeep Gosain & Shri Girish Agrawalassessment Year: 2012-13 Douceur Sportwear Mfg. Co Assistant Commissioner Of Income Tax-15(1)(2) Pvt Ltd. Aaykar Bhavan, C-96, Ttc Industrial Estate, Vs. Mumbai-400020. Area Midc Turbhe, Navi Mumbai-400705. (Pan: Aaacd1753G) (Appellant) (Respondent) Present For: Assessee : Shri Swapnil Newaskar, Advocate Revenue : Shri Annavaram Kosuri, Sr. Dr Date Of Hearing : 14.07.2025 Date Of Pronouncement : 31.07.2025

For Appellant: Shri Swapnil Newaskar, AdvocateFor Respondent: Shri Annavaram Kosuri, Sr. DR

Section 143(3)Section 144Section 147Section 41(1)

creditors. He further noted that there cannot be any exceptions which can be granted to the assessee and thus invoked provisions of section 41(1) to make the addition. Ld. CIT(A) confirmed the said addition and dismissed the appeal of the assessee against which assessee has come up before

Assistant Commissioner of Income Tax-19(1), Mumbai vs. Jaswant Jayantilal Shah, Mumbai

In the result, appeal of the revenue is dismissed

ITA 1479/MUM/2025[2012-13]Status: DisposedITAT Mumbai31 Jul 2025AY 2012-13

Bench: Shri Saktijit Dey, Hon'Ble & Shri Narendra Kumar Billaiya, Hon'Blei.T.A. No. 1479/Mum/2025 Assessment Year: 2012-13

For Appellant: Shri Lavanya Rajouhrohit, A/RFor Respondent: Shri Vivek Perampurna, CIT D/R

Section 143(1)Section 14ASection 23Section 23(4)(a)Section 23(4)(b)Section 250(4)Section 41(1)

case and in law, the Ld. CIT(A) was justified in deleting the disallowance on account of cessation of liability under Section 41(1) of the Act amounting to 16,58,56,095/-, in the absence of necessary supporting evidences against the claim of loan and only a part ... findings of the ld. CIT(A). This ground is accordingly dismissed. 7. The next issue relates to the deletion of disallowance made under Section 41(1) of the Act. The underlying facts in this issue are that, during the course of the assessment proceedings, the assessee was asked to furnish

Assistant Commissioner of Income Tax, Madurai vs. S. Rajendran, Chitharal

ITA 2904/CHNY/2024[2020-21]Status: DisposedITAT Chennai30 Jul 2025AY 2020-21

Bench: Shri Aby T Varkey & Shri S. R. Raghunathaआयकर अपील सं./Ita Nos.:2903 & 2904/Chny/2024 निर्धारण वर्ष / Assessment Years: 2015-16 & 2020-21 The Assistant Commissioner Of Income Tax, Central Circle -2, Madurai. (अपीलार्थी/Appellant) अपीलार्थी की ओर से/Appellant By प्रत्यर्थी की ओर से/Respondent By सुनवाई की तारीख/Date Of Hearing घोषणा की तारीख/Date Of Pronouncement S.Rajendran, Vs.13-85/42A, Parthittavillai Veedu, Chitharal Pο, Kanyakumari District, Nagercoil – 629 151. [Pan:Afqpr-2835-H] (प्रत्यर्थी/Respondent) Shri. M. Murali, C.I.T. & Shri. Kumar Chandan, J.C.I.T. Shri. T. Vasudevan, Advocate 20.06.2025 30.07.2025 आदेश /Order Per S. R. Raghunatha: These Appeals Filed By The Revenue Are Directed Against The Orders Of The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi, For The Assessment Years 2015-16 & 2020-21, Vide Order Dated 19.09.2024 Respectively. Since Facts Are Identical & Issues Are Common, Appeals Filed By The Revenue Were Heard & Are Being Disposed Of By This Consolidated Order.

Section 68

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

Assistant Commissioner of Income Tax, Madurai vs. S.Rajendran, Chitharal Po

ITA 2903/CHNY/2024[2015-16]Status: DisposedITAT Chennai30 Jul 2025AY 2015-16

Bench: Shri Aby T Varkey & Shri S. R. Raghunathaआयकर अपील सं./Ita Nos.:2903 & 2904/Chny/2024 निर्धारण वर्ष / Assessment Years: 2015-16 & 2020-21 The Assistant Commissioner Of Income Tax, Central Circle -2, Madurai. (अपीलार्थी/Appellant) अपीलार्थी की ओर से/Appellant By प्रत्यर्थी की ओर से/Respondent By सुनवाई की तारीख/Date Of Hearing घोषणा की तारीख/Date Of Pronouncement : : S.Rajendran, Vs.13-85/42A, Parthittavillai Veedu, Chitharal Pο, Kanyakumari District, Nagercoil – 629 151. [Pan:Afqpr-2835-H] (प्रत्यर्थी/Respondent) Shri. M. Murali, C.I.T. & Shri. Kumar Chandan, J.C.I.T. Shri. T. Vasudevan, Advocate 20.06.2025 30.07.2025 आदेश /Order Per S. R. Raghunatha: These Appeals Filed By The Revenue Are Directed Against The Orders Of The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi, For The Assessment Years 2015-16 & 2020-21, Vide Order Dated 19.09.2024 Respectively. Since Facts Are Identical & Issues Are Common, Appeals Filed By The Revenue Were Heard & Are Being Disposed Of By This Consolidated Order. :-2-:

Section 68

Kailash Nath Vishwanath Sharma, Mumbai vs. Asstt. Commissioner of Income Tax 27(2), Mumbai

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

ITA 3388/MUM/2025[2012-13]Status: DisposedITAT Mumbai30 Jul 2025AY 2012-13

Bench: Shri Narender Kumar Choudhryshri Prabhash Shankarassessment Year: 2012-13

For Appellant: Shri Bharat L. GandhiFor Respondent: Shri Hemanshu Joshi,Ld. Sr. D.R

Section 2(22)(e)Section 250Section 41(1)

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER SHRI PRABHASH SHANKAR

Kailashchandra Haumanprasad Sugla, Solapur vs. ITO, Ward-1(1), Solapur

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

ITA 1555/PUN/2025[2015-16]Status: DisposedITAT Pune29 Jul 2025AY 2015-16

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपील सं. / Ita No.1555/Pun/2025 िनधा"रण वष" / Assessment Year: 2015-16 Kailashchandra Haumanprasad V The Income Tax Officer, Sugla, S Ward-1(1), Solapur. 45/15, Samrat Chowk, Budhwar Peth, Prabhakar Nagar H/S, Solapur-413001. Maharashtra. Pan: Ahsps3244B Appellant/ Assessee Respondent / Revenue Assessee By Shri Pramod S Shingte – Ar Revenue By Shri Sandeep P Sathe – Jcit(Dr) Date Of Hearing 16/07/2025 Date Of Pronouncement 29/07/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By Assessee Against The Order Of Ld.Addl./Joint Commissioner Of Income Tax(Appeal)-3, Chennai Passed Under Section 250 Of The Income Tax Act, 1961 For The A.Y.2015-16Dated 12.10.2023, Emanating From Order U/S.143(3) Of The Income Tax Act, 1961, Dated 26.12.2017. The Assessee Has Raised Following Grounds Of Appeal :

Section 143(3)Section 250Section 272A(1)(c)Section 41(1)Section 56(2)(vii)

आयकर अपीलीय अिधकरण ”एस एम सी” "ायपीठ पुणेम"। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE MS.ASTHA

Patidar Builder Pvt Ltd, Bhopal vs. AO, Bhopal

Appeal is allowed partly

ITA 557/IND/2023[2011-12]Status: DisposedITAT Indore28 Jul 2025AY 2011-12

Bench: Shri B.M. Biyani & Shri Paresh M. Joshiassessment Year:2011-12 Patidar Builder Pvt. Ltd. Assessing Officer E-4/382 Arera Colony, (Jcit-Range-2, Bhopal) बनाम/ Bhopal Vs. (Assessee/Appellant) (Revenue/Respondent) Pan: Aaacp8931A Assessee By Shri Pankaj Shah & Soumya Bumb, Ars Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 23.07.2025 Date Of Pronouncement 28.07.2025

Section 143(2)Section 143(3)Section 2(22)(e)Section 36(1)(iii)Section 40A(3)Section 41(1)

facts and circumstances of the case and in law the learned CIT(A) erred in confirming the addition made by Assessing Officer under Section 41(1) of the Act amounting to Rs. 1429710 without appreciating that the no deduction was claimed in respect of said creditors and therefore they ... filed at Pages 7-12 of Paper-Book. Having shown these factual aspects, Ld. AR made a brief submission about the provision of section 41(1) reading as under: “Profits chargeable to tax. 41.(1) Where an allowance or deduction has been made in the assessment for any year

Manoj Chadha, Delhi vs. ACIT Cir 31(1), Civic Centre

In the result, the appeal of the assessee is partly allowed

ITA 3563/DEL/2023[AY 2014-15]Status: DisposedITAT Delhi25 Jul 2025

Bench: Shri Satbeer Singh Godara & Shri M. Balaganeshmanoj Chadha, Vs. Acit, W-16/19, Western Avenue, Circle-31(1), Sainik Farms, New Delhi New Delhi (Appellant) (Respondent) Pan:

For Appellant: Shri Manoj Kumar, CAFor Respondent: Sh. Dheeraj Kumar Jain, Sr. DR

Section 133(6)Section 143(3)Section 41(1)Section 68

acknowledgement of debt due by the assessee to these sundry creditors. Hence, the liabilities does not cease to exist. Accordingly, the provision of Section 41(1) of the Act does Manoj Chadha not even apply in the facts of the instant case. Further the confirmations were given by the assessee

C.R. Textile Mills, Salem vs. ITO, Circle-1, Salem

In the result, the appeal filed by the assessee is allowed

ITA 1361/CHNY/2025[2016-17]Status: DisposedITAT Chennai24 Jul 2025AY 2016-17

Bench: Shri Manu Kumar Giri & Shri Jagadishआयकर अपील सं./Ita No.1361/Chny/2025 िनधा:रण वष: /Assessment Year: 2016-17

For Appellant: Shri T. Vasudevan, AdvocateFor Respondent: Ms. Gouthami Manivasagam, JCIT

Section 271(1)(c)Section 41(1)

आयकर अपीलीय अिधकरण, ‘बी’ "ायपीठ, चे"ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI "ी मनु कुमार िग"र