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“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)

ACIT 6(3), Mumbai vs. Grasim Industires Ltd, Mumbai

In the result Revenue's appeal is dismissed

ITA 6758/MUM/2011[2008-09]Status: DisposedITAT Mumbai21 May 2025AY 2008-09

Bench: Shri Saktijit Dey, Vp & Shri N.K. Billaiya, Am

Section 36(1)(va)

receipt. The Special Bench of ITAT in the case of M/s. Suzler India Limited (supra) in similar set of facts has held that section 41(1) has no application. In the case of Malabar Industrial Co. Ltd. (supra), the Hon'ble Supreme Court observed as under : "A bare reading

Sree Hari Agro Industries Limited, Adm. Off. at Alwar vs. ACIT, Central Circle, Alwar

In the result, appeal of the assessee is allowed

ITA 1236/JPR/2024[2009-10]Status: DisposedITAT Jaipur13 May 2025AY 2009-10

Bench: Shri Gagan Goyal & Shri Narinder Kumar

For Appellant: Mr. P. C. Parwal, CA, Ld. ARFor Respondent: Mr. Manoj Kumar, JCIT, Ld. DR
Section 250

assessee. It is only when the purpose of the loan is ascertained it can be decided as to whether the provision of section 41(1) of the Act will be attracted or not. We therefore set aside the order of the CIT (A) in so far as the addition ... made above. The assessee is at liberty to file the required documents to substantiate its case regarding non applicability of the provision of section 41(1) of the Act or section 28(iv) of the Act.” 4. In pursuance to the above directions of Hon’ble ITAT

Bhagyalaxmi Steel Rolling Mill, Mehsana vs. The ITO, Ward-1, Mehsana

In the result, appeal filed by the assessee is allowed

ITA 360/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad09 May 2025AY 2018-19

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), SHRI T.R. SENTHIL KUMAR (Judicial Member)

For Appellant: Shri Rushin Patel, A.RFor Respondent: Shri Ravindra, Sr. DR
Section 250Section 253Section 270A

assessee. In view of the above discussion, the amount of Rs. 5,45,347/- is brought to tax by applying the provisions of section 41(1) of the I.T. Act. Penalty proceedings u/s 270A(2)(a) are separately initiated for under reporting of total income.” 13. Ld. DR, however, vehemently ... sundry creditors amounting to Rs.5,45,347/- as having ceased to exist and added to the income of the assessee in terms of Section 41(1) of the Act. As rightly pointed out by the Ld. Counsel for the assessee, the impugned parties have admittedly confirmed the outstanding balance

Shyam Sunder Gupta, Kanpur vs. Dy. Commissioner of Income Tax-1, Kanpur

ITA 168/LKW/2017[2012-13]Status: DisposedITAT Lucknow06 May 2025AY 2012-13

Bench: Shri Kul Bharat & Shri Nikhil Choudhary

For Appellant: Respondent byFor Respondent: Date of hearing
Section 150Section 150(1)Section 153(3)(ii)Section 2(22)(e)Section 251(2)Section 41(1)

Because the CIT(A) has erred on facts and in law in upholding the disallowance of Rs.13,26,600/- under section 41(1) of the Act, payment outstanding be made to M/s. Scrap Tin Enterprises without appreciating the facts and circumstances of the case and without giving the assessee ... fact, that the liability being outstanding and payable, cannot cease to exist by any unilateral act of the creditor. The provision of section 41(1) have been wrongly applied the addition made be deleted. 7. Because the CIT(A) has failed to appreciate the explanation as well as the confirmation

Vishal Plastomers Pvt. Ltd., Ahmedabad vs. The Jt.CIT, Range-8, Ahmedabad

The appeal of the Revenue is dismissed

ITA 1782/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad06 May 2025AY 2009-10

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), Ms. SUCHITRA KAMBLE (Judicial Member)

For Appellant: Shri Bandish Soparkar, ARFor Respondent: Shri Prathvi Raj Meena, CIT.DR &
Section 143(3)Section 14ASection 234ASection 250(6)Section 36(1)(va)Section 37(1)Section 40Section 41(1)

under the provisions of sec. 41(1) of the Act. Ld. CIT (A) erred in not appreciating that provisions of section 41(1) are not applicable to amount considered as income in earlier years though waived by arbitration award. Ld. CIT (A) ought to have deleted disallowance ... GROUND NO. 3 & 4 pertains to the addition made to the income of the assessee on account of cessation of liability as per section 41(1) of the Act. 19. Brief facts relating to the issue are that during assessment proceedings the AO noted credit balances outstanding in the books

The ITO, Ward-8(4), Ahmedabad vs. Vishal Plastomers Pvt. Ltd., Ahmedabad

The appeal of the Revenue is dismissed

ITA 1776/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad06 May 2025AY 2009-10

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), Ms. SUCHITRA KAMBLE (Judicial Member)

For Appellant: Shri Bandish Soparkar, ARFor Respondent: Shri Prathvi Raj Meena, CIT.DR &
Section 143(3)Section 14ASection 234ASection 250(6)Section 36(1)(va)Section 37(1)Section 40Section 41(1)

under the provisions of sec. 41(1) of the Act. Ld. CIT (A) erred in not appreciating that provisions of section 41(1) are not applicable to amount considered as income in earlier years though waived by arbitration award. Ld. CIT (A) ought to have deleted disallowance ... GROUND NO. 3 & 4 pertains to the addition made to the income of the assessee on account of cessation of liability as per section 41(1) of the Act. 19. Brief facts relating to the issue are that during assessment proceedings the AO noted credit balances outstanding in the books

Prakash Dhudalal Sanghvi, HUF, Ahmedabad vs. The ITO, Ward-1(2)(1) Previously Ward-5(2)(5), Ahmedabad

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

ITA 90/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad30 Apr 2025AY 2017-18

Bench: Ms. Suchitra Kamble & Shri Narendra Prasad Sinhaassessment Year: 2017-18

Section 115BSection 144Section 250Section 40A(2)(b)Section 41(1)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD

N.K. Industries Ltd., Ahmedabad vs. The Dy.CIT, Circle-3(1)(1), Ahmedabad

In the result, the appeal of the assessee on this ground is allowed

ITA 448/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad25 Apr 2025AY 2013-14

Bench: Dr. B.R.R. Kumarms. Suchitra Kamble

For Appellant: NK Industries Ltd (Cross Appeals)
Section 250

speaks about the receipt of a benefit in respect of a trading liability, by way of remission or cessation of the liability. Section 41(1) requires to be extracted and hence, it is extracted as follows: "Section 41: (1) Where an allowance or deduction has been made in the assessment ... capital receipt and was not claimed as deduction from the taxable income as expenses and hence, it did not come under Section 41(1). The Assessing Officer held that the credit balances written back was the income of the assessee that arose out of the business activity and hence, liable

N.K. Industries Ltd., Ahmedabad vs. The Dy.CIT, Circle-3(1)(1), Ahmedabad

In the result, the appeal of the assessee on this ground is allowed

ITA 447/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad25 Apr 2025AY 2010-11

Bench: Dr. B.R.R. Kumarms. Suchitra Kamble

For Appellant: NK Industries Ltd (Cross Appeals)
Section 250

speaks about the receipt of a benefit in respect of a trading liability, by way of remission or cessation of the liability. Section 41(1) requires to be extracted and hence, it is extracted as follows: "Section 41: (1) Where an allowance or deduction has been made in the assessment ... capital receipt and was not claimed as deduction from the taxable income as expenses and hence, it did not come under Section 41(1). The Assessing Officer held that the credit balances written back was the income of the assessee that arose out of the business activity and hence, liable

The Dy.CIT, Circle-3(1)(1)., Ahmedabad vs. N.K. Industries Ltd., Ahmedabad

In the result, the appeal of the assessee on this ground is allowed

ITA 443/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad25 Apr 2025AY 2013-14

Bench: Dr. B.R.R. Kumarms. Suchitra Kamble

For Appellant: NK Industries Ltd (Cross Appeals)
Section 250

speaks about the receipt of a benefit in respect of a trading liability, by way of remission or cessation of the liability. Section 41(1) requires to be extracted and hence, it is extracted as follows: "Section 41: (1) Where an allowance or deduction has been made in the assessment ... capital receipt and was not claimed as deduction from the taxable income as expenses and hence, it did not come under Section 41(1). The Assessing Officer held that the credit balances written back was the income of the assessee that arose out of the business activity and hence, liable

The Dy.CIT, Circle-3(1)(1)., Ahmedabad vs. N.K. Industries Ltd., Ahmedabad

In the result, the appeal of the assessee on this ground is allowed

ITA 442/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad25 Apr 2025AY 2010-11

Bench: Dr. B.R.R. Kumarms. Suchitra Kamble

For Appellant: NK Industries Ltd (Cross Appeals)
Section 250

speaks about the receipt of a benefit in respect of a trading liability, by way of remission or cessation of the liability. Section 41(1) requires to be extracted and hence, it is extracted as follows: "Section 41: (1) Where an allowance or deduction has been made in the assessment ... capital receipt and was not claimed as deduction from the taxable income as expenses and hence, it did not come under Section 41(1). The Assessing Officer held that the credit balances written back was the income of the assessee that arose out of the business activity and hence, liable

ACIT 1, Gwalior vs. Pankaj Advertising Pvt Ltd, Gwalior

The appeal stand dismissed

ITA 29/AGR/2020[2013-14]Status: DisposedITAT Agra23 Apr 2025AY 2013-14

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं. / Ita No.28/Agr/2020 (िनधा"रणवष" / Assessment Year: 2010-11) & 2. आयकरअपील सं. / Ita No.29/Agr/2020 (िनधा"रणवष" / Assessment Year: 2013-14) Acit, Circle-1, M/S. Pankaj Advertising Pvt. Ltd. बनाम/ Gwalior. Parakh Home, Bachchraj Ka Bada, Vs. Sarafa Bazar, Lashkar, Gwalior. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaccm-2597-D (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Shailender Shrivastava, - Ld. Sr. Dr ""थ"कीओरसे/Respondent By : Sh. Mahesh Agarwal, Ca – Ld. Ar सुनवाईकीतारीख/Date Of Hearing : 21-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 23-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeals By Revenue For Assessment Years (Ay) 2010-11 & 2013-14 Arise Out Of Separate Orders Of First Appellate Authority. First, We Take Up Appeal For Ay 2010-11 Which Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals), Gwalior [Cit(A)] On 26- 11-2019 In The Matter Of An Assessment Framed By Ld. Assessing Officer [Ao] U/S. 143(3) Of The Act On 28-03-2013. Having Heard Rival Submissions, The Appeal Is Disposed-Off As Under. 2. In The Assessment Order, Ld. Ao Observed That There Was Difference In Sundry Creditor Balances For Rs.232.04 Lacs Which Is Tabulated On Page No.4 Of The Assessment Order. The Same Was Added To The Income

For Appellant: Sh. Shailender Shrivastava, - Ld. Sr. DRFor Respondent: Sh. Mahesh Agarwal, CA – Ld. AR
Section 143(3)Section 41(1)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE

ACIT Circle-1, Gwalior vs. Pankaj Advertising Pvt Ltd, Gwalior

The appeal stand dismissed

ITA 28/AGR/2020[2010-11]Status: DisposedITAT Agra23 Apr 2025AY 2010-11

Bench: Hon’Ble Shri Satbeer Singh Godara, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं. / Ita No.28/Agr/2020 (िनधा"रणवष" / Assessment Year: 2010-11) & 2. आयकरअपील सं. / Ita No.29/Agr/2020 (िनधा"रणवष" / Assessment Year: 2013-14) Acit, Circle-1, M/S. Pankaj Advertising Pvt. Ltd. बनाम/ Gwalior. Parakh Home, Bachchraj Ka Bada, Vs. Sarafa Bazar, Lashkar, Gwalior. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaccm-2597-D (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Shailender Shrivastava, - Ld. Sr. Dr ""थ"कीओरसे/Respondent By : Sh. Mahesh Agarwal, Ca – Ld. Ar सुनवाईकीतारीख/Date Of Hearing : 21-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 23-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeals By Revenue For Assessment Years (Ay) 2010-11 & 2013-14 Arise Out Of Separate Orders Of First Appellate Authority. First, We Take Up Appeal For Ay 2010-11 Which Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals), Gwalior [Cit(A)] On 26- 11-2019 In The Matter Of An Assessment Framed By Ld. Assessing Officer [Ao] U/S. 143(3) Of The Act On 28-03-2013. Having Heard Rival Submissions, The Appeal Is Disposed-Off As Under. 2. In The Assessment Order, Ld. Ao Observed That There Was Difference In Sundry Creditor Balances For Rs.232.04 Lacs Which Is Tabulated On Page No.4 Of The Assessment Order. The Same Was Added To The Income

For Appellant: Sh. Shailender Shrivastava, - Ld. Sr. DRFor Respondent: Sh. Mahesh Agarwal, CA – Ld. AR
Section 143(3)Section 41(1)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE

Deputy Commissioner of Income Tax, Pune vs. Patson Agro Exports Private Limited, Pune City

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

ITA 1404/PUN/2023[2018-19]Status: DisposedITAT Pune23 Apr 2025AY 2018-19

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2018-19

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Ajay Kumar Keshari – CIT
Section 143(2)Section 41(1)

actually ceased to exist for all practical purposes as there are no more claimants towards the same. He referred to the provisions of section 41(1) of the Act and the decision of Hon'ble Supreme Court in the case of CIT vs. T V Sundaram Avenger and Sons

Ajay Bakliwal, Kota vs. ACIT, Central Circle, Kota

ITA 1276/JPR/2024[2014-15]Status: DisposedITAT Jaipur11 Apr 2025AY 2014-15
For Appellant: Shri Rajendra SisodiaFor Respondent: Shri Rajesh Ojha, CIT-DR
Section 132Section 132(1)Section 132(4)Section 139Section 143(3)Section 153ASection 250

being confirmed as per provisions of section 56(2)(vii) of the Income Tax Act, the arguments with regard to non applicability of section 41(1) are not found to be relevant. In the reply the appellant stated during the appellate proceedings dated 19.07.2024 that the total amount of Rs.16 ... been taxed in the hands of AOP. The head of income under which the AO had made the addition was Remission of liability Section 41(1). A detailed submission as to why the addition could not be made u/s 41(1) was filed before

ITO-WD1(2)(1) Ahmedabad, Vejalpur Income Tax Office vs. Bhrugesh Dineshbhai Shah, Kalupur Ahmedabad

In the result, Ground No.2 raised by the assesse is hereby allowed

ITA 1219/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad11 Apr 2025AY 2017-18

Bench: The Ao Who Made The Following Additions: I. Estimation Of Gross Profit At 5% On Purchases & Disallowance Of 25% Expenses Rs.74,85,796/-, Ii. Unexplained Credit U/S. 68 Of The Act Of Rs.18,77,688/-, Iii. Sundry Creditors & Unexplained Rs.8,83,31,369/- & Iv. Capital Work-In-Progress Rs.15,87,000/-

For Appellant: Shri Divyakant Parikh, ARFor Respondent: Shri V Nandakumar, CIT.DR &
Section 142(1)Section 143(3)Section 68Section 69

Jurisdictional High Court in the case of PCIT vs. M/s. Adani Agro Pvt. Ltd. held that the provisions of Section 41(1) of the Act 8 ITA Nos. 1214 & 1219/Ahd/2024 (Bhrugesh Dineshbhai Shah) A.Y. 2017-18 could not have been invoked as there is no remission of cessation of liability ... observing as follows: “10. As per the aforesaid provisions of Section 41(1) of the Act, 1961, there has to be remission or cessation of trading liability. Merely because the liability has remained outstanding for more than three years and the same is not written back in profit and loss

Bhrugesh Dineshbhai Shah, Ahmedabad vs. The ITO, Ward-1(2)(1), Ahmedabad

In the result, Ground No.2 raised by the assesse is hereby allowed

ITA 1214/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad11 Apr 2025AY 2017-18

Bench: The Ao Who Made The Following Additions: I. Estimation Of Gross Profit At 5% On Purchases & Disallowance Of 25% Expenses Rs.74,85,796/-, Ii. Unexplained Credit U/S. 68 Of The Act Of Rs.18,77,688/-, Iii. Sundry Creditors & Unexplained Rs.8,83,31,369/- & Iv. Capital Work-In-Progress Rs.15,87,000/-

For Appellant: Shri Divyakant Parikh, ARFor Respondent: Shri V Nandakumar, CIT.DR &
Section 142(1)Section 143(3)Section 68Section 69

Jurisdictional High Court in the case of PCIT vs. M/s. Adani Agro Pvt. Ltd. held that the provisions of Section 41(1) of the Act 8 ITA Nos. 1214 & 1219/Ahd/2024 (Bhrugesh Dineshbhai Shah) A.Y. 2017-18 could not have been invoked as there is no remission of cessation of liability ... observing as follows: “10. As per the aforesaid provisions of Section 41(1) of the Act, 1961, there has to be remission or cessation of trading liability. Merely because the liability has remained outstanding for more than three years and the same is not written back in profit and loss

Naraya Securities Ltd., Delhi vs. DCIT, CC-1, Delhi

In the result, the appeal of the assessee is allowed

ITA 956/DEL/2023[2019-20]Status: DisposedITAT Delhi11 Apr 2025AY 2019-20

Bench: Shri Pradip Kumar Kedia & Shri Sudhir Kumar

Section 115JSection 250Section 28

amounts or shares to the lender, there has occurred remission of liability in the year under consideration, which results in taxation under section 41(1) of the Act; (b) However, the CIT(A) ultimately invoked the provision of section 28(iv) and held that the appellant got the ‘benefit

M/S. Shree Laxmi Developers, Silvassa vs. Income Tax Officer, Silvassa Ward, Silvassa

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

ITA 678/SRT/2024[2014-15]Status: DisposedITAT Surat08 Apr 2025AY 2014-15

Bench: Shri Siddhartha Nautiyal & Shri Bijayananda Pruseth

For Appellant: Shri Subhash Bains, A.RFor Respondent: Shri Ravi Kant Gupta, CIT DR
Section 144Section 271(1)(c)Section 41(1)Section 68

cessation of liability. As a result, outstanding creditors balance of Rs. 1,12,29,961/- were added to the total income under Section 41(1) of the Act. The Assessing Officer noted that there were certain discrepancies regarding the capital introduced by one of the partners and since the assessee ... considered a cessation of liability, and the outstanding amount of Rs. 1,12,29,961 is confirmed to the total income under Section 41(1) of the Income Tax Act. There are discrepancies found by AO in the documentation regarding the capital introduced by one of the partners, Shri Chhatrasingh

M/S. Shree Laxmi Developers, Mumbai vs. Income Tax Officer, Silvassa Ward, Silvassa

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

ITA 677/SRT/2024[2013-14]Status: DisposedITAT Surat08 Apr 2025AY 2013-14

Bench: Shri Siddhartha Nautiyal & Shri Bijayananda Pruseth

For Appellant: Shri Subhash Bains, A.RFor Respondent: Shri Ravi Kant Gupta, CIT DR
Section 144Section 271(1)(c)Section 41(1)Section 68

cessation of liability. As a result, outstanding creditors balance of Rs. 1,12,29,961/- were added to the total income under Section 41(1) of the Act. The Assessing Officer noted that there were certain discrepancies regarding the capital introduced by one of the partners and since the assessee ... considered a cessation of liability, and the outstanding amount of Rs. 1,12,29,961 is confirmed to the total income under Section 41(1) of the Income Tax Act. There are discrepancies found by AO in the documentation regarding the capital introduced by one of the partners, Shri Chhatrasingh