“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)

Shri Rajan Sharma C/O Meek Enterprises, Phagwara vs. Income Tax Officer, Phagwara

In the result, appeal of the assessee is allowed

ITA 53/ASR/2023[2014-15]Status: DisposedITAT Amritsar17 Jul 2023AY 2014-15

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 129Section 133(6)Section 143(2)Section 143(3)Section 250rSection 41(1)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE

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

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

ITA 5671/DEL/2018[2010-11]Status: PendingITAT Delhi17 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

M/S. Bridgestone India Pvt. Ltd., Pune vs. The ACIT NFAC, Delhi

In the result, appeal of assessee is partly allowed

ITA 84/IND/2022[2017-18/]Status: DisposedITAT Indore17 Jul 2023

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanibridgestone India Pvt. Ltd. Acit (Nfac) Plot No.A-43, Phase-Ii, Delhi Midc Chakan, Village Vs. Sawardari, Taluka Khed, Pune (Appellant / Assessee) (Respondent/ Revenue) Pan: Aabcb 2304 E Assessee By Shri Sukhsagar Syal, Ar Revenue By Shri P.K. Mishra, Cit-Dr Date Of Hearing 23.05.2023 Date Of Pronouncement 17.07.2023

Section 143(3)Section 144C(13)Section 144C(5)Section 43(1)

आयकर अपील"य अ"धकरण, इंदौर "यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY

Bhuramal Rajmal Surana & Sons Pvt. Ltd., Delhi vs. Commissioner of Income Tax (Appeals)-4, Jaipur

In the result, this appeal of the assessee is allowed

ITA 254/JPR/2023[2017-18]Status: DisposedITAT Jaipur17 Jul 2023AY 2017-18

Bench: Her; (B) No Proceedings Were Directed To Be Initiated In Original Appeal Order Dt. 28.02.2022 And/Or; (C) It Has Been Passed In Haste Without Affording Reasonable Opportunity To The Appellant.

For Appellant: Shri S.R. Sharma, CAFor Respondent: Mrs. Manisha Choudhary (Addl.CIT)

Section 115BSection 142(1)Section 143(2)Section 143(3)Section 154Section 270ASection 271ASection 41(1)Section 68

same to tax @ 60% under section 115BBE of the IT Act. The AO further made addition of Rs. 71,35,200/- under section 41(1) of the I.T. Act, 1961 holding that appellant failed to show genuineness of the amount shown as outstanding balance in respect ... after making addition of Rs. 32,91,000/- under section 68 of the Act and Rs. 71,35,200/- under section 41(1) of the Act. The AO in the assessment order also initiated penalty proceedings under section 271AAC of the Act on account of addition

Uretek India Private Limited, New Delhi vs. ACIT Circle-27(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 8240/DEL/2019[2015-16]Status: DisposedITAT Delhi14 Jul 2023AY 2015-16

Bench: Shri Kul Bharat & Shri M.Balaganesh[Assessment Year : 2015-16] Uretek India Pvt.Ltd., Vs Acit, C/O-Rohit Malik & Associates, Circle-27(1), 1212A, Chiranjiv Tower, 43, New Delhi. Nehru Place, New Delhi-110019. Pan-Aaacu9168L Appellant Respondent Appellant By Dr. Rakesh Gupta, Adv. & Shri Somil Agarwal, Adv. Respondent By Shri Gurpreet Shah Singh, Sr.Dr Date Of Hearing 08.06.2023 Date Of Pronouncement 14.07.2023 Order

Section 143(1)Section 41(1)Section 68

treating the said sum of Rs. 2,07,29,190/- as remission or cessation of trading liability by invoking the provisions of Section 41(1) of the Income Tax Act, 1961. The said addition of Rs. 2,07,29,190/- sustained by the Commissioner of Income Tax (Appeals) by invoking ... provisions of section 41(1) of the Income Tax Act, 1961 being illegal, erroneous and without jurisdiction, deserves to be deleted. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 2. The only

M/S Shri Balaji Builders, 1/43, Rhb Colony, Bhiwadi, Alwar vs. ACIT, Circle-1, Alwar

In the result, the appeal of the assessee is allowed

ITA 192/JPR/2023[2013-14]Status: DisposedITAT Jaipur12 Jul 2023AY 2013-14

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri P.C. Parwal (C.A)For Respondent: Shri A.S. Nehara (Addl.CIT)

Section 133ASection 142(1)Section 143(3)Section 41(1)Section 68

above facts and circumstances of the case, the amounting difference in the said creditor’s account is clearly covered under the terms of section 41(1) of the Act as cessation of such liability to the tune of Rs.10,96,237/- and the same is hereby added to its total ... documents regarding the issue, it has transpired that the assessee firm has remitted or ceased the said liability. Hence, the provision of Section 41(1)(a) of the Act is clearly applicable in the case of the assessee firm, it reads below:- Profit chargeable to tax 41(1) Where

Deputy Commissioner of Income Tax, Circle 1(1), Bhilai vs. Mesers Shree Arihant Traders, Bhilai

In the result, appeal of the revenue and cross objection of the assessee, both are allowed for statistical purposes

ITA 187/RPR/2019[2014-15]Status: DisposedITAT Raipur05 Jul 2023AY 2014-15

Bench: SHRI RAVISH SOOD (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

For Appellant: Shri Ravi Agrawal, CAFor Respondent: Shri V.K.Singh, CIT-DR

Section 2(22)(e)Section 40A(3)Section 41(1)

आयकर अपीलीय अधिकरण, रायपुर न्यायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR श्री रविश सूद, न्याधयक सदस्य

The ACIT, Circle-2, Jamnagar vs. Saurashtra Cement Ltd., Porbandar

In the result, appeal filed by the Revenue is dismissed and appeal filed by the Assessee is partly allowed

ITA 476/RJT/2014[2010-11]Status: DisposedITAT Rajkot05 Jul 2023AY 2010-11

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year: 2010-11

Section 14ASection 40Section 40A(9)

therefore, not covered under Section 28(iv) of the Act. The Ld. AR further submitted that the same is also not covered under Section 41(1) of the Act as not allowed earlier under any provisions of the Act. The Ld. AR relied upon the decision of Hon’ble jurisdictional

Saurashta Cement Ltd., Porbandar vs. The Joint Commissioner of Income Tax, Range-2, Jamnagar

In the result, appeal filed by the Revenue is dismissed and appeal filed by the Assessee is partly allowed

ITA 457/RJT/2014[2010-11]Status: DisposedITAT Rajkot05 Jul 2023AY 2010-11

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year: 2010-11

Section 14ASection 40Section 40A(9)

Chhattisgarh State Power Transmission Company Ltd, Raipur vs. Assistant Commissioner of Income Tax-4(1), Raipur

In the result, the appeal of the assessee in ITA No

ITA 81/RPR/2020[2011-12]Status: DisposedITAT Raipur04 Jul 2023AY 2011-12

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No.81/Rpr/2020 "नधा"रण वष" / Assessment Year : 2011-12 Chhattisgarh State Power Transmission Company Ltd. Executive Director (Fin.), Csptcl, Second Floor, Sldc Building, Cseb Office Campus, Danginiya Raipur-492 013 (C.G.) Pan : Aadcc5773E .......अपीलाथ" / Appellant बनाम / V/S. The Assistant Commissioner Of Income Tax, Circle-4(1), Raipur (C.G.) ……""यथ" / Respondent

For Appellant: Shri R.B Doshi, CAFor Respondent: Shri V.K Singh, CIT-DR

Section 143(2)Section 143(3)

आयकर अपील"य अ"धकरण "यायपीठ रायपुर म"। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH

Chhattisgarh State Power Transmission Company Limited, Raipur vs. Assistant Commissioner of Income Tax, Circle-4(1), Raipur

In the result, the appeal of the assessee in ITA No

ITA 143/RPR/2019[2012-13]Status: DisposedITAT Raipur04 Jul 2023AY 2012-13

For Appellant: Shri R.B Doshi, CAFor Respondent: Shri V.K Singh, CIT-DR

Section 143(2)Section 143(3)

आयकर अपील"य अ"धकरण "यायपीठ रायपुर म"। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH

Acc Limited, Mumbai vs. DCIT (Ltu), Mumbai

In the result, appeal filed by department is dismissed

ITA 800/MUM/2022[2013-14]Status: DisposedITAT Mumbai30 Jun 2023AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms Kavitha Rajagopal, Hon'Blem/S. Acc Limited V. Dcit (Ltu) 121, Cement House, M.K. Road 29Th Floor, Center-1 Churchgate, Mumbai-400020 World Trade Centre, Cuffe Parade Mumbai - 400005 Pan: Aaact1507C (Appellant) (Respondent) Asst. Cit – 3(4) V. M/S. Acc Limited 29Th Floor, Center-1 Cement House,121, M.K. Road World Trade Centre, Cuffe Parade Churchgate, Mumbai-400020 Mumbai-400005 Pan: Aaact1507C (Appellant) (Respondent)

Section 14A

Value against the total sales tax liability represent capital receipt and could not be a remission or cessation of a trading liability under section 41(1) of the Act, especially when the scheme under consideration, also provides for capital investment subsidy separately and in view of the decision

Asst. Commissioner of Income Tax-3(4), Mumbai-400005 vs. M/S. Acc Limited, Mumbai-400020

In the result, appeal filed by department is dismissed

ITA 1171/MUM/2022[2013-14]Status: DisposedITAT Mumbai30 Jun 2023AY 2013-14

Section 14A

Everest Industries Ltd., Noida vs. Dy CIT Circle- 1, Thane

In the result, appeals of the Revenue as well appeals of the In the result, appeals of the Revenue as well appeals of the In the result, appeals of the Revenue as well appeals of the assessee are a...

ITA 720/MUM/2020[2016-17]Status: DisposedITAT Mumbai30 Jun 2023AY 2016-17

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant ()

For Appellant: Mr. Yogesh Thar/For Respondent: Mr. Biswanath Das, CIT-DR/

cessation of e future liability cannot be classified as remission or cessation of the liability so as to attract the provisions of section 41(1) of the Act the liability so as to attract the provisions of section 41(1) of the Act the liability so as to attract ... provisions of section 41(1) of the Act and same cannot be treated as income for the purpose of the and same cannot be treated as income for the purpose of the and same cannot be treated as income for the purpose of the computation of the total income. computation

Everest Industries Ltd., Noida vs. Dy CIT Circle- 1, Thane

ITA 719/MUM/2020[2015-16]Status: DisposedITAT Mumbai30 Jun 2023AY 2015-16

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant ()

For Appellant: Mr. Yogesh Thar/For Respondent: Mr. Biswanath Das, CIT-DR/

DCIT Circle-1, Thane vs. M/S Everest Industries Ltd., Delhi

ITA 652/MUM/2020[2014-15]Status: DisposedITAT Mumbai30 Jun 2023AY 2014-15

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant ()

For Appellant: Mr. Yogesh Thar/For Respondent: Mr. Biswanath Das, CIT-DR/

DCIT, Circle-1, Thane vs. Everest Industries Ltd., Mumbai

ITA 1424/MUM/2020[2015-16]Status: DisposedITAT Mumbai30 Jun 2023AY 2015-16

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant ()

For Appellant: Mr. Yogesh Thar/For Respondent: Mr. Biswanath Das, CIT-DR/

Radhakrishna Foodland Pvt Ltd, Mumbai vs. Assistant Commissioner of Income Tax, Circle-3, Mumbai

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

ITA 1906/MUM/2022[2020-2021]Status: DisposedITAT Mumbai27 Jun 2023AY 2020-2021

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm Radhakrishna Foodland Pvt. Ltd. Asst. Cit, Circle-3, Radhakrishna House, Majiwade Village, Mumbai Vs. Majiwade, Mumbai-400 601

For Appellant: Shri M. A. GohelFor Respondent: Ms. Mahita Nair

Section 139(1)Section 143(1)Section 143(3)Section 2(24)(x)Section 250Section 36(1)(va)Section 41(1)Section 41(1)(a)

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND MS. KAVITHA RAJAGOPAL, JM Radhakrishna

DCIT CC- 29, New Delhi vs. Surya Kiran Finance Corporation, New Delhi

The appeal of the revenue is dismissed

ITA 631/DEL/2021[2017-18]Status: DisposedITAT Delhi19 Jun 2023AY 2017-18

Bench: Sh. Saktijit Dey & Sh. N. K. Billaiyaassessment Year: 2017-18 Dcit M/S. Surya Kiran Finance Central Circle-29 Vs Corporation New Delhi 43/1, Rajpur Road, Civil Lines, Delhi-110054 Pan No.Abgfs7841A (Appellant) (Respondent) Appellant By Sh. Vivek Vardhan, Sr. Dr Respondent By Sh. T. M. Shivakumar, Advocate Date Of Hearing: 14/06/2023 Date Of Pronouncement: /06/2023 Order Per N. K. Billaiya, Am: This Appeal By The Revenue Is Preferred Against The Order Of The Cit(A)-30, New Delhi Dated 05.02.2021 Pertaining To A.Y.2017-18. 2. The Only Grievance Of The Revenue Is That The Cit(A) Erred In Deleting The Disallowance Of Rs.15695780/- . 3. Briefly Stated The Facts Of The Case Are That During The Course Of The Scrutiny Assessment Proceedings The Ao Noticed That The Assessee Has Repaid Loans Amounting Rs.15695780/-. The Ao Was Of The Opinion That These Companies Are Bogus Companies Of Different Entry Operators & Was Further Of The Opinion That The Repayment Of Loan Is Also Bogus & There Is A Cessation Of Liability U/S. 41 (1) Of The Act & Went On To Make The Addition Of Rs.15695780/-. 4. Assessee Agitated The Matter Before The Cit(A) & Vehemently Contended That The Loans Taken In Earlier Year Were Repaid By The Assessee, Therefore, There Is No Question Of Cessation Of Liability & Infact The Assessee Has Discharged The Loan Liability. After Considering The Facts & The Submission The Cit(A) Observed As Under :-

Section 41Section 41(1)

case of Chief CIT vs. Kesaria Tea Co. Ltd.[2002] 122 Taxman 91 (SC), has observed that in order to apply Section 41(1), the following points are to be kept in view: (1) In the course of assessment for an earlier year, allowance or deduction has been made ... income tax as the income of the previous year wherein such benefit was obtained. Thus, in order to invoke the provisions of Section 41(1) of the Act, there must have been a trading liability in respect of which an allowance or deduction has been claimed by the assessee

Chhattisgarh State Power Generation Co. Ltd., Raipur vs. Dy. Commissioner of Income Tax-1(1), Raipur

In the result, the appeal of the assessee in ITA No

ITA 24/RPR/2022[2018-19]Status: DisposedITAT Raipur15 Jun 2023AY 2018-19

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No.16/Rpr/2017 "नधा"रण वष" / Assessment Year : 2009-10 Chhattisgarh State Power Generation Company Ltd. O/O. Executive Director-Finance Ground Floor, Vidyut Seva Bhawan, Daganiya, Raipur-492 001 (C.G.) Pan : Aadcc5772F .......अपीलाथ" / Appellant बनाम / V/S. The Assistant Commissioner Of Income Tax, Circle-1(2), Raipur (C.G.) ……""यथ" / Respondent आयकर अपील सं. / Ita No.24/Rpr/2022 "नधा"रण वष" / Assessment Year : 2018-19 Chhattisgarh State Power Generation Company Ltd. Ground Floor, Vidyut Seva Bhawan, Daganiya, Raipur-492 001 (C.G.) Pan : Aadcc5772F .......अपीलाथ" / Appellant बनाम / V/S.

For Appellant: Shri R.B Doshi, CAFor Respondent: Shri V.K Singh, CIT-DR

Section 143(2)Section 143(3)Section 32

आयकर अपील"य अ"धकरण "यायपीठ रायपुर म"। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH