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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)

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

Appeals are disposed of as under:

ITA 12/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

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

Appeals are disposed of as under:

ITA 11/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

DCIT 2(1), Mumbai vs. Chennai Continer Terminal P.Ltd, Mumbai

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

ITA 894/MUM/2013[2009-10]Status: DisposedITAT Mumbai11 Aug 2023AY 2009-10

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Ble

Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80Section 92C

that asset, as per explanation 10 to section 43(1) of the Act Duty credit entitlement is not taxable even as per section 41(1) of the Act 6. should have appreciated that Duty credit entitlement is not some benefit in respect of trading liability by way of remission ... cessation of thereof and hence it is not even chargeable to tax as per section 41(1), the duty credit entitlement received is not taxable and hence the same should be treated as capital receipt: Treating duty credit entitlement as income from other sources 7. Without prejudice to ground

DCIT 2(1), Mumbai vs. Chennai Continer Terminal P.Ltd, Mumbai

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

ITA 893/MUM/2013[2008-09]Status: DisposedITAT Mumbai11 Aug 2023AY 2008-09

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Ble

Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80Section 92C

that asset, as per explanation 10 to section 43(1) of the Act Duty credit entitlement is not taxable even as per section 41(1) of the Act 6. should have appreciated that Duty credit entitlement is not some benefit in respect of trading liability by way of remission ... cessation of thereof and hence it is not even chargeable to tax as per section 41(1), the duty credit entitlement received is not taxable and hence the same should be treated as capital receipt: Treating duty credit entitlement as income from other sources 7. Without prejudice to ground

Chennai Container Terminal P. Ltd, Mumbai vs. ACIT 2(1), Mumbai

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

ITA 1119/MUM/2013[2009-10]Status: DisposedITAT Mumbai11 Aug 2023AY 2009-10

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Ble

Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80Section 92C

that asset, as per explanation 10 to section 43(1) of the Act Duty credit entitlement is not taxable even as per section 41(1) of the Act 6. should have appreciated that Duty credit entitlement is not some benefit in respect of trading liability by way of remission ... cessation of thereof and hence it is not even chargeable to tax as per section 41(1), the duty credit entitlement received is not taxable and hence the same should be treated as capital receipt: Treating duty credit entitlement as income from other sources 7. Without prejudice to ground

Chennai Container Terminal P. Ltd, Mumbai vs. DCIT 2(1), Mumbai

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

ITA 1118/MUM/2013[2008-09]Status: DisposedITAT Mumbai11 Aug 2023AY 2008-09

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Ble

Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80Section 92C

that asset, as per explanation 10 to section 43(1) of the Act Duty credit entitlement is not taxable even as per section 41(1) of the Act 6. should have appreciated that Duty credit entitlement is not some benefit in respect of trading liability by way of remission ... cessation of thereof and hence it is not even chargeable to tax as per section 41(1), the duty credit entitlement received is not taxable and hence the same should be treated as capital receipt: Treating duty credit entitlement as income from other sources 7. Without prejudice to ground

Luxor Writing Instruments Pvt. Ltd., New Delhi vs. DCIT Circle-4(1), New Delhi

The appeals are dismissed

ITA 6898/DEL/2019[2002-03]Status: HeardITAT Delhi02 Aug 2023AY 2002-03

Bench: Sh. N. K. Billaiya & Ms. Astha Chandraassessment Year: 2002-03

Section 28Section 36Section 41Section 41(1)

confirming the addition of Rs.33485700/- on account of waiver of liability treating the same as cessation of liability invoking the provision of section 41 (1) of the Act. 3. Representatives of both the sides were heard at length. Case records carefully perused. We find that in the first round ... that the waiver of loan basically constituted capital receipts and that the waiver was by the holding company of the share holder, hence section 41(1) of the Act is inapplicable irrespective of the manner of utilization of loan. The AO observed as under :- “However, it is correct that when

Vijubha Jitubha Jadeja, Rajkot vs. The Principal Commissioner of Income Tax - 1, Rajkot

The appeal of the assessee is partly allowed as above

ITA 105/RJT/2022[2017-18]Status: DisposedITAT Rajkot02 Aug 2023AY 2017-18

Bench: Ms. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

For Appellant: Shri Vimal Desai, Ld. A.RFor Respondent: Shri Shramdeep Sinha, Ld. CIT-D.R
Section 115BSection 144Section 147Section 263Section 28Section 37(1)Section 41(1)Section 68Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH VIRTUAL COURT] Before: Ms. Annapurna Gupta, Accountant Member And

M.P.Re-Cycling Co. Pvt Ltd, Mumbai vs. Assistant Commissioner of Income Tax, Central Circle-1(4), Mumbai

In the result, appeal of the assessee is allowed

ITA 488/MUM/2023[2016-2017]Status: DisposedITAT Mumbai31 Jul 2023AY 2016-2017
Section 139(1)Section 139(9)Section 143(2)Section 143(3)Section 41(1)

erred in upholding the action of the Assessing Officer in making an addition of Rs 31,85,842 under section 41(1) of the Act. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld

ACIT, Circle-30(1), New Delhi vs. Bhushan Kumar Jain, New Delhi

In the result, the appeal of the revenue is allowed

ITA 72/DEL/2020[2016-17]Status: DisposedITAT Delhi31 Jul 2023AY 2016-17
For Appellant: Shri Kanav Bali Sr. DRFor Respondent: Shri Satish Kr. Agarwal, CA
Section 68

purpose of establishing or furthering a business, yet they were loans and not trading receipts or loss from expenditure - the other instances attracting Section 41(1). 6)Please refer to the Delhi High court judgment ITA 429/2003 CIT VS SHIV DHOOTI PEARLS & INVESTMENT LTD decided on 21/12/2015. The copy

DCIT Central Circle 28, New Delhi vs. Ginni Gold Private Limited, New Delhi

In the result, the appeal of the assessee is dismissed

ITA 1593/DEL/2021[2016-2017]Status: DisposedITAT Delhi27 Jul 2023AY 2016-2017
Section 143(3)Section 251(1)(a)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE, SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI M

Ginni Gold Private Limited, New Delhi vs. ACIT, New Delhi

In the result, the appeal of the assessee is dismissed

ITA 1200/DEL/2021[2016-17]Status: DisposedITAT Delhi27 Jul 2023AY 2016-17
Section 143(3)Section 251(1)(a)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE, SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI M

ITO, Ward-8(3), New Delhi vs. Eunite Technologies P.Ltd, `New Delhi

ITA 7330/DEL/2019[2014-15]Status: DisposedITAT Delhi27 Jul 2023AY 2014-15

Bench: Sh. N.K.Billaiya & Sh. Anubhav Sharmaita No.7330/Del/2019, A.Y. 2014-15 Ito, Vs. M/S. Eunite Technologies Pvt. Ltd. Ward-8(3), 22, Ramanuja Computer Complex, New Delhi Okhla Industrial Area, Phase-Ii, New Delhi- 110020 Pan No. Aagcs8425G (Appellant) (Respondent)

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

credit balance had not been repaid till now. Thus AO has added Rs.2,18,51,709/- as deemed income as per provisions of section 41(1) of the Act. 3. Against the order, assessee filed the appeal and Ld. CIT(A) has allowed the appeal of the assessee with following ... treated them genuine as appellant failed to produce the representative of these companies and added them as deemed income as per provisions of section 41(1) of the Act. During the course of appellate proceedings, appellant has submitted that there is nothing on record to suggest that the creditors have

Dcm Shriram Industries Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeals of the assessee are disposed off as above

ITA 375/DEL/2015[2005-06]Status: DisposedITAT Delhi26 Jul 2023AY 2005-06

Bench: Sh. G. S. Pannu & Sh. Amit Shuklaassessment Year: 2004-05 Assessment Year: 2005-06 & Assessment Year: 2006-07 Dcm Shriram Industries Ltd. The Dcit 6Th Floor, Kanchanjunga Circle 7(1), Building New Delhi 18, Barakhamba Road, New Delhi-110001 Assessee By: Sh. Pradeep Dinodia, F.C.A. Sh. R. K. Kapoor F. C. A. Department By: Sh. Dilip Singh Kothari Cit-Dr Date Of Hearing .06.2023 Date Of Pronouncement 26.07.2023 1. The Aforesaid Appeals Have Been Filed By The Assessee Against Orders Passed By Ld. Cit (A) Vide The Common Order Dated 22.09.2014 For The A. Y. 2004-05 & A. Y. 2005-06 (I.E., Appeal Nos. 409 To 410/13-14/1560 To 1561) Appeal Relating To A. Y. 2006-07, Is Against Order Dated 07.12.2011 (Appeal No. 419/08- 09/118) For The Quantum Of Assessment Passed U/S 143(3) Of The Income Tax Act. In All These Appeals Identical Grounds Of Appeals Have Been Raised Against Certain Common Issues On The Additions 1

For Appellant: Sh. Pradeep Dinodia, F.C.AFor Respondent: Sh. Dilip Singh Kothari CIT-DR
Section 132Section 132(4)Section 133ASection 143(3)Section 153A(2)Section 153CSection 69C

Supreme Court in the case of Mahindra & Mahindra (404 ITR 1), wherein Hon’ble Court, after discussing the various provisions as contained in section 41(1) of the Act and also u/s 28, held that there is a difference in trading liability and other liability. The provisions of section 41 ... some trading liability is written back. If the amount of loan is utilized towards acquisition of capital assets, then the provisions of section 41(1) of the Income Tax Act are not attracted. Thus, respectfully following the judgment of Hon’ble Supreme Court, we hold that no addition

Dcm Shriram Industries Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeals of the assessee are disposed off as above

ITA 374/DEL/2015[2004-05]Status: DisposedITAT Delhi26 Jul 2023AY 2004-05

Bench: Sh. G. S. Pannu & Sh. Amit Shuklaassessment Year: 2004-05 Assessment Year: 2005-06 & Assessment Year: 2006-07 Dcm Shriram Industries Ltd. The Dcit 6Th Floor, Kanchanjunga Circle 7(1), Building New Delhi 18, Barakhamba Road, New Delhi-110001 Assessee By: Sh. Pradeep Dinodia, F.C.A. Sh. R. K. Kapoor F. C. A. Department By: Sh. Dilip Singh Kothari Cit-Dr Date Of Hearing .06.2023 Date Of Pronouncement 26.07.2023 1. The Aforesaid Appeals Have Been Filed By The Assessee Against Orders Passed By Ld. Cit (A) Vide The Common Order Dated 22.09.2014 For The A. Y. 2004-05 & A. Y. 2005-06 (I.E., Appeal Nos. 409 To 410/13-14/1560 To 1561) Appeal Relating To A. Y. 2006-07, Is Against Order Dated 07.12.2011 (Appeal No. 419/08- 09/118) For The Quantum Of Assessment Passed U/S 143(3) Of The Income Tax Act. In All These Appeals Identical Grounds Of Appeals Have Been Raised Against Certain Common Issues On The Additions 1

For Appellant: Sh. Pradeep Dinodia, F.C.AFor Respondent: Sh. Dilip Singh Kothari CIT-DR
Section 132Section 132(4)Section 133ASection 143(3)Section 153A(2)Section 153CSection 69C

Supreme Court in the case of Mahindra & Mahindra (404 ITR 1), wherein Hon’ble Court, after discussing the various provisions as contained in section 41(1) of the Act and also u/s 28, held that there is a difference in trading liability and other liability. The provisions of section 41 ... some trading liability is written back. If the amount of loan is utilized towards acquisition of capital assets, then the provisions of section 41(1) of the Income Tax Act are not attracted. Thus, respectfully following the judgment of Hon’ble Supreme Court, we hold that no addition

Dcm Shriram Industries Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeals of the assessee are disposed off as above

ITA 641/DEL/2012[2006-07]Status: DisposedITAT Delhi26 Jul 2023AY 2006-07

Bench: Sh. G. S. Pannu & Sh. Amit Shuklaassessment Year: 2004-05 Assessment Year: 2005-06 & Assessment Year: 2006-07 Dcm Shriram Industries Ltd. The Dcit 6Th Floor, Kanchanjunga Circle 7(1), Building New Delhi 18, Barakhamba Road, New Delhi-110001 Assessee By: Sh. Pradeep Dinodia, F.C.A. Sh. R. K. Kapoor F. C. A. Department By: Sh. Dilip Singh Kothari Cit-Dr Date Of Hearing .06.2023 Date Of Pronouncement 26.07.2023 1. The Aforesaid Appeals Have Been Filed By The Assessee Against Orders Passed By Ld. Cit (A) Vide The Common Order Dated 22.09.2014 For The A. Y. 2004-05 & A. Y. 2005-06 (I.E., Appeal Nos. 409 To 410/13-14/1560 To 1561) Appeal Relating To A. Y. 2006-07, Is Against Order Dated 07.12.2011 (Appeal No. 419/08- 09/118) For The Quantum Of Assessment Passed U/S 143(3) Of The Income Tax Act. In All These Appeals Identical Grounds Of Appeals Have Been Raised Against Certain Common Issues On The Additions 1

For Appellant: Sh. Pradeep Dinodia, F.C.AFor Respondent: Sh. Dilip Singh Kothari CIT-DR
Section 132Section 132(4)Section 133ASection 143(3)Section 153A(2)Section 153CSection 69C

Supreme Court in the case of Mahindra & Mahindra (404 ITR 1), wherein Hon’ble Court, after discussing the various provisions as contained in section 41(1) of the Act and also u/s 28, held that there is a difference in trading liability and other liability. The provisions of section 41 ... some trading liability is written back. If the amount of loan is utilized towards acquisition of capital assets, then the provisions of section 41(1) of the Income Tax Act are not attracted. Thus, respectfully following the judgment of Hon’ble Supreme Court, we hold that no addition

Drishti Devcn P Ltd, Indore vs. The PCIT-1, Indore

Appeal is allowed partly

ITA 122/IND/2022[2017-18]Status: DisposedITAT Indore25 Jul 2023AY 2017-18

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2017-18 Drishti Devcon Private The Pcit-1, Limited, Indore 406, Pukhraj Corporate, बनाम/ Navlakha Bus Stand, Vs. Indore

Section 143(3)Section 263Section 40(3)

addition of Rs. 3,75,000/-, Ld. AR submitted that the AO has made addition on a different footing and not on section 41(1) as noted by PCIT. Therefore, Ld. AR argues that this issue raised by PCIT is also not valid. Ld. DR supports the revision-order

Royal Bombay Yatch Club, Mumbai vs. ITO Ward 17(3)(2), Mumbai

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

ITA 1602/MUM/2023[2017-18]Status: DisposedITAT Mumbai21 Jul 2023AY 2017-18
Section 143(3)Section 41(1)

resident or from any club and hence the alleged amount is purely fictitious and imaginary. b. Disallowance of amount of sundry creditors under section 41(1) unpaid for three years Rs. 15,48,309. It may be noted that subsequent to the period of three years till date, the assessee

Hubtown Ltd, Mum vs. DCIT, CC-2(4), Mum

In the result, appeal is partly allowed

ITA 3259/MUM/2022[2019-20]Status: DisposedITAT Mumbai18 Jul 2023AY 2019-20

Bench: Shri Vikas Awasthy () & Ms. Padmavathy S. ()

Section 132Section 153Section 153ASection 56(2)(x)Section 69C

Assessing Officer did not accept the submission made by the assessee as to why the amount cannot be assessed as an income under section 41(1) or under section 68 or under section 56(2)(x) in the hands of the assessee. The Assessing Officer, accordingly made an addition ... that the assessee has been repaying the loan during the year under consideration. Even otherwise to bring to tax the loan amount under section 41(1), there should be cessation of liability. However it is evident from the ledger accounts that the assessee has been repaying the loan amount during

JCIT, Special Range-4, New Delhi vs. Hindustan Coca-Cola Beverages Pvt. Ltd., New Delhi

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

ITA 5810/DEL/2018[2010-11]Status: DisposedITAT Delhi18 Jul 2023AY 2010-11

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

For Appellant: Shri Sachit Jolly, AdvFor Respondent: Shri Wasim Arshad, CIT- DR

same u/s 41(1) of the Act. 33. The assessee challenged the addition before the ld. CIT(A) and vehemently contended that section 41(1) of the Act do not apply on the facts of the case. The ld. CIT(A), though convinced that section 41(1) is not applicable ... decision of the ld. CIT(A). 35. The ld. counsel for the assessee vehemently stated that though the ld. CIT(A) accepted that section 41(1) of the Act does not apply, but grossly erred in applying provisions of section 41