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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)

Salgaocar Mining Industries Private Limited., Panaji vs. The Joint Commissioner of Income Tax, Margao Range., Margao

In the result, the appeal filed by the Revenue in ITA

ITA 118/PAN/2016[2011-12]Status: DisposedITAT Panaji05 Oct 2023AY 2011-12

Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI PARTHA SARATHI CHAUDHURY (Judicial Member)

For Appellant: Shri Sukhsagar SyalFor Respondent: Shri Prabhakar Anand
Section 143(3)Section 14ASection 41(1)

circumstances, the Assessing Officer inferred that there was cessation of liability in respect of above parties and invoked the provisions of section 41(1) made addition of Rs.59,03,90,714/-. Similarly, during the course of assessment proceedings, the Assessing Officer had called for the details of the provisions ... contract with each of the parties were reproduced and proceed to hold that there was no cessation of liability and the provisions of section 41(1) have no application. In respect of balance amount of Rs.33,56,62,763/- with respect to two parties i.e. party no.17 and 18, considering

DCIT, Circle, Panipat vs. Paliwal Overseas Pvt. Ltd., Panipat

In the result, Revenue’s appeal being ITA No

ITA 644/DEL/2018[2012-13]Status: DisposedITAT Delhi27 Sept 2023AY 2012-13

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaassessment Year: 2011-12

Section 36

1 ITA Nos. 5818/Del/2017 & ITA 644, 1263, 2082 & 2083/Del/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI

ACIT, Circle, Panipat vs. Paliwal Overseas Pvt. Ltd., Panipat

In the result, Revenue’s appeal being ITA No

ITA 2083/DEL/2018[2014-15]Status: DisposedITAT Delhi27 Sept 2023AY 2014-15

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaassessment Year: 2011-12

Section 36

1 ITA Nos. 5818/Del/2017 & ITA 644, 1263, 2082 & 2083/Del/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI

ACIT, Circle, Panipat vs. Paliwal Overseas Pvt. Ltd., Panipat

In the result, Revenue’s appeal being ITA No

ITA 2082/DEL/2018[2010-11]Status: DisposedITAT Delhi27 Sept 2023AY 2010-11

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaassessment Year: 2011-12

Section 36

1 ITA Nos. 5818/Del/2017 & ITA 644, 1263, 2082 & 2083/Del/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI

ACIT, Circle, Panipat vs. Paliwal Overseas P.Ltd, Panipat

In the result, Revenue’s appeal being ITA No

ITA 1263/DEL/2018[2013-14]Status: DisposedITAT Delhi27 Sept 2023AY 2013-14

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaassessment Year: 2011-12

Section 36

1 ITA Nos. 5818/Del/2017 & ITA 644, 1263, 2082 & 2083/Del/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI

Paliwal Overseas Pvt. Ltd., Panipat vs. DCIT, Circle, Panipat

In the result, Revenue’s appeal being ITA No

ITA 5878/DEL/2017[2011-12]Status: DisposedITAT Delhi27 Sept 2023AY 2011-12

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaassessment Year: 2011-12

Section 36

1 ITA Nos. 5818/Del/2017 & ITA 644, 1263, 2082 & 2083/Del/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI

M/S. Minestone, Mumbai vs. ACIT 18(2), Mumbai

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

ITA 2546/MUM/2022[2010-11]Status: DisposedITAT Mumbai22 Sept 2023AY 2010-11

Bench: Shri B R Baskaran, Am & Ms. Kavitha Rajagopal, Jm M/S. Minestone Acit-18(2) Room No. 32, 4Th Floor, Plot No. 98, Mumbai -400 020 Sagar Bhavan, Building No.2, Vs. Kantilal M Sharma Marg, Lohar Chawl, Kalbadevi, Mumbai-400 002

For Appellant: Shri K. GopalFor Respondent: Shri Soumendu Kumar Dash
Section 143(1)Section 143(3)Section 144Section 147Section 148(1)Section 250

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI B R BASKARAN, AM AND MS. KAVITHA RAJAGOPAL, JM

Hindustan Coca-Cola Beverages Company Private Limited, Gurgaon vs. ACIT, Circle-10(1), New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 975/DEL/2023[2017-18]Status: DisposedITAT Delhi14 Sept 2023AY 2017-18

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Sachit Jolly, AdvFor Respondent: Shri Vivek Kumar Upadhyay, CIT- DR
Section 32(1)(i)Section 41(1)Section 41(2)

grossly erred in applying provisions of Section 41(2) of the Act. 38. Coming to the applicability of provision of Section 41(1) of the Act which is also not applicable on the facts of the case, as twin conditions have to be satisfied (i) deduction in respect ... continued to be shown in the books of accounts of the assessee. 41. Thus, considering from all possible angles, neither provisions of section 41(1) of the Act apply [Assessing Officer fails] nor provisions of section 41(2) and 43(6) of the Act [CITA fails]. This ground

ACIT, Circle-10(1), New Delhi vs. Hindustan Coca Cola Beverages P.Ltd, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 928/DEL/2023[2017-18]Status: DisposedITAT Delhi14 Sept 2023AY 2017-18

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Sachit Jolly, AdvFor Respondent: Shri Vivek Kumar Upadhyay, CIT- DR
Section 32(1)(i)Section 41(1)Section 41(2)

grossly erred in applying provisions of Section 41(2) of the Act. 38. Coming to the applicability of provision of Section 41(1) of the Act which is also not applicable on the facts of the case, as twin conditions have to be satisfied (i) deduction in respect ... continued to be shown in the books of accounts of the assessee. 41. Thus, considering from all possible angles, neither provisions of section 41(1) of the Act apply [Assessing Officer fails] nor provisions of section 41(2) and 43(6) of the Act [CITA fails]. This ground

DCIT 5(3)(2), Mumbai vs. The Great Eastern Shipping Co.Ltd, Mumbai

In the result, appeal filed by the learned assessing officer is dismissed

ITA 3272/MUM/2015[2009-10]Status: DisposedITAT Mumbai13 Sept 2023AY 2009-10

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm The Great Eastern Shipping Co. The Dy. Commissioner Of Ltd. Income-Tax, Kalyaniwalla & Mistry Llp Range-5(3), Esplanade House, 2 Nd Floor, Vs. Room No.525B, 5Th Floor, M.K. Marg, 29, Hazarimal Somani Marg, Fort, Mumbai-400 001 Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaact1565C The Dy. Commissioner Of The Great Eastern Shipping Income-Tax, Co. Ltd. Range-5(3), Kalyaniwalla & Mistry Llp Vs. Esplanade House, 2 Nd Floor, Room No.525B, 5Th Floor, M.K. Marg, 29, Hazarimal Somani Marg, Mumbai-400 020 Fort, Mumbai-400 001 (Appellant) (Respondent)

For Appellant: Shri Jitendra Jain, AdvocateFor Respondent: Shri Manoj Mishra, CIT DR
Section 115Section 143Section 143(3)Section 144CSection 14A

rejected the contention of the assessee and noted that that forfeiture of non-commercial of warrant is a trading liability and provisions of section 41 (1) of the income tax act applies. Assessee has raised money through convertible warrants from certain promoters and non-executive director enterprise ... assessee credited the same to the capital reserve account. According to the learned assessing officer, the above sum is chargeable to tax under section 41 (1 of the act. Accordingly the learned assessing officer made an addition of ₹ 15.98 crores under section 41 (one) of the act. The learned assessing

The Great Eastern Shipping Co. Ltd, Mumbai vs. DCIT RG 5(3), Mumbai

In the result, appeal filed by the learned assessing officer is dismissed

ITA 1656/MUM/2014[2009-10]Status: DisposedITAT Mumbai13 Sept 2023AY 2009-10

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm The Great Eastern Shipping Co. The Dy. Commissioner Of Ltd. Income-Tax, Kalyaniwalla & Mistry Llp Range-5(3), Esplanade House, 2 Nd Floor, Vs. Room No.525B, 5Th Floor, M.K. Marg, 29, Hazarimal Somani Marg, Fort, Mumbai-400 001 Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaact1565C The Dy. Commissioner Of The Great Eastern Shipping Income-Tax, Co. Ltd. Range-5(3), Kalyaniwalla & Mistry Llp Vs. Esplanade House, 2 Nd Floor, Room No.525B, 5Th Floor, M.K. Marg, 29, Hazarimal Somani Marg, Mumbai-400 020 Fort, Mumbai-400 001 (Appellant) (Respondent)

For Appellant: Shri Jitendra Jain, AdvocateFor Respondent: Shri Manoj Mishra, CIT DR
Section 115Section 143Section 143(3)Section 144CSection 14A

rejected the contention of the assessee and noted that that forfeiture of non-commercial of warrant is a trading liability and provisions of section 41 (1) of the income tax act applies. Assessee has raised money through convertible warrants from certain promoters and non-executive director enterprise ... assessee credited the same to the capital reserve account. According to the learned assessing officer, the above sum is chargeable to tax under section 41 (1 of the act. Accordingly the learned assessing officer made an addition of ₹ 15.98 crores under section 41 (one) of the act. The learned assessing

R M Components Private Ltd., Haryana vs. ACIT, Circle--2, Faridabad

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

ITA 9703/DEL/2019[2015-16]Status: DisposedITAT Delhi05 Sept 2023AY 2015-16

Bench: Shri N.K.Billaiya & Shri Kul Bharat[Assessment Year : 2015-16] R M Components Pvt.Ltd., Vs Acit, A-138, Sgm Nagar, Nit Faridabad, Circle-2, Faridabad, Haryana-121001. Faridabad. Pan-Aadcr5485J Appellant Respondent Appellant By Shri Vijay Singla, Ca & Ms. Airik Singla, Adv. Respondent By Shri Amit Katoch, Sr.Dr Date Of Hearing 22.08.2023 Date Of Pronouncement 05.09.2023 Order

Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 37(1)Section 41(1)

accounts;  There is no question of cessation and remission of sundry creditors liability and it is not covered by the provisions of section 41(1) of the IT Act, if the same is shown in Balance Sheet of Assessee Violation of Audi Altrem partem (ie Principles of Natural Justice

ACIT, Circle- 26(1), New Delhi vs. V C Solutions Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed and the Cross Objection of the assessee is allowed

ITA 1884/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Aug 2023AY 2014-15

Bench: Sh. Kul Bharatdr. B. R. R. Kumar

For Appellant: Sh. V. K. Agarwal, ARFor Respondent: Sh. P. Barnwal, CIT DR
Section 14ASection 36Section 36(1)

constitute income, falling under section 28(iv), being benefit arising for the business.” 3. Rollatainers Ltd. vs. CIT [2011] 339 ITR 54 (Delhi) “Section 41(1) read with Section 59 of the Act would become relevant and these provisions have been brought within the sweep of taxation even the remission ... Madras High Court in the case of Skraemeco Regent Ltd., wherein detailed discussion was made on section 28(iv) as well as section 41(1) and it was held that amount received for the purpose of acquiring capital asset did not constitute trading liability, and therefore, the same

M/S. Ahiliabai Sardessai, Panaji vs. Income Tax Officer, Ward 2(4), Panaji

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

ITA 8/PAN/2021[2014-15]Status: DisposedITAT Panaji29 Aug 2023AY 2014-15

Bench: Shri Inturi Rama Rao & Shri Partha Sarathi Chaudhuryआयकर अपील सं. / Ita No.08/Pan/2021 िनधा"रण वष" / Assessment Year : 2014-15 M/S. Ahiliabai Sardessai, Vs. Ito, Ward-2(4), Panaji. 301, Lotus Court, M. G. Road, St. Inez Junction, Panaji- 403001. Pan : Aagfa9044G Appellant Respondent Assessee By : Shri N. J. Prabhudesai Revenue By : Shri N. Shrikanth Date Of Hearing : 17.08.2023 Date Of Pronouncement : 29.08.2023 आदेश / Order Per Inturi Rama Rao, Am: This Is An Appeal Filed By The Assessee Directed Against The Order Of The National Faceless Appeal Centre, Delhi [‘Nfac’] Dated 26.03.2021 For The Assessment Year 2014-15. 2. Briefly, The Facts Of The Case Are That The Appellant Is A Partnership Firm Engaged In The Business Of Mining. The Return Of Income For The Assessment Year 2014-15 Was Filed On 30.09.2014 Declaring A Loss Of Rs.4,92,14,101/- & The Same Was Revised At Loss

For Appellant: Shri N. J. PrabhudesaiFor Respondent: Shri N. Shrikanth
Section 143(3)Section 14ASection 41(1)

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI – VIRTUAL COURT BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI

S T I India Ltd., Indore vs. ACIT-5(1), Indore

Appeals are disposed of as under:

ITA 850/IND/2019[2013-14]Status: DisposedITAT Indore24 Aug 2023AY 2013-14

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

more than 3 years cannot be the reason for taxing the amount to the income of the appellant by invoking the provision of section 41(1) of the I.T. Act. Page 24 of 29 STI India Ltd. ITA Nos.11, 850, 12, 13/Ind/2019 & 22, 784, 23 & 24/Ind/2019 (A.Y.2012-13 ... understand what does section 41(1) says. The language of provision of section 41(1) of the I.T. Act read as under :- “5(1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee

ACIT-5(1), Indore vs. S T I India Ltd., Indore

Appeals are disposed of as under:

ITA 784/IND/2019[2013-14]Status: DisposedITAT Indore24 Aug 2023AY 2013-14

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

more than 3 years cannot be the reason for taxing the amount to the income of the appellant by invoking the provision of section 41(1) of the I.T. Act. Page 24 of 29 STI India Ltd. ITA Nos.11, 850, 12, 13/Ind/2019 & 22, 784, 23 & 24/Ind/2019 (A.Y.2012-13 ... understand what does section 41(1) says. The language of provision of section 41(1) of the I.T. Act read as under :- “5(1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee

ACIT-5(1), Indore vs. S T I India Ltd., Indore

Appeals are disposed of as under:

ITA 24/IND/2019[2015-16]Status: DisposedITAT Indore24 Aug 2023AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

more than 3 years cannot be the reason for taxing the amount to the income of the appellant by invoking the provision of section 41(1) of the I.T. Act. Page 24 of 29 STI India Ltd. ITA Nos.11, 850, 12, 13/Ind/2019 & 22, 784, 23 & 24/Ind/2019 (A.Y.2012-13 ... understand what does section 41(1) says. The language of provision of section 41(1) of the I.T. Act read as under :- “5(1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee

ACIT-5(1), Indore vs. S T I India Ltd., Indore

Appeals are disposed of as under:

ITA 23/IND/2019[2014-15]Status: DisposedITAT Indore24 Aug 2023AY 2014-15

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

more than 3 years cannot be the reason for taxing the amount to the income of the appellant by invoking the provision of section 41(1) of the I.T. Act. Page 24 of 29 STI India Ltd. ITA Nos.11, 850, 12, 13/Ind/2019 & 22, 784, 23 & 24/Ind/2019 (A.Y.2012-13 ... understand what does section 41(1) says. The language of provision of section 41(1) of the I.T. Act read as under :- “5(1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee

ACIT-5(1), Indore vs. S T I India Ltd., Indore

Appeals are disposed of as under:

ITA 22/IND/2019[2012-13]Status: DisposedITAT Indore24 Aug 2023AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

more than 3 years cannot be the reason for taxing the amount to the income of the appellant by invoking the provision of section 41(1) of the I.T. Act. Page 24 of 29 STI India Ltd. ITA Nos.11, 850, 12, 13/Ind/2019 & 22, 784, 23 & 24/Ind/2019 (A.Y.2012-13 ... understand what does section 41(1) says. The language of provision of section 41(1) of the I.T. Act read as under :- “5(1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee

S T I India Ltd., Indore vs. ACIT-5(1), Indore

Appeals are disposed of as under:

ITA 13/IND/2019[2015-16]Status: DisposedITAT Indore24 Aug 2023AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

more than 3 years cannot be the reason for taxing the amount to the income of the appellant by invoking the provision of section 41(1) of the I.T. Act. Page 24 of 29 STI India Ltd. ITA Nos.11, 850, 12, 13/Ind/2019 & 22, 784, 23 & 24/Ind/2019 (A.Y.2012-13 ... understand what does section 41(1) says. The language of provision of section 41(1) of the I.T. Act read as under :- “5(1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee