Which cases are most cited on Section 41(1)?

Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT (227 ITR 172) — 621 citing judgments; CIT v. T.V. Sundaram Iyengar & Sons Ltd. (222 ITR 344) — 223 citing judgments; CIT v. Indo Nippon Chemicals Co. Ltd. (261 ITR 275) — 204 citing judgments; CIT v. Sugauli Sugar Works (P) Ltd. (236 ITR 518) — 203 citing judgments; CIT v. Mahindra & Mahindra Ltd. (404 ITR 1) — 164 citing judgments.

How many judgments are there on Section 41(1)?

BharatTax indexes 1,943 ITAT, High Court and Supreme Court judgments that turn on Section 41(1) of the Income Tax Act, 1961.

Section 41(1) of the Income Tax Act

Income-tax Act, 2025: s.38

Section 41(1) falls under section 41 of the Income-tax Act, 1961, which corresponds to section 38 (Certain sums deemed as profits and gains of business or profession) of the Income-tax Act, 2025.

Read section 38 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 41(1) is Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT (227 ITR 172), cited in 621 of the 1,943 judgments on BharatTax that turn on this section.

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.

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.

CIT v. Godawari Power & Ispat Ltd.

42 Taxmann.com 551 · 2014 · High Court

104

citing judgments

Inter-unit transfer of power by an industrial undertaking eligible for Section 80IA deduction constitutes a specified domestic transaction under Section 92BA, requiring valuation at arm's length. This decision clarifies the application of Section 80IA(8) and transfer pricing regulations for such transactions.

Maruti Udyog v. DCIT

92 ITD 119 · 2005 · ITAT

citing judgments

The onus is on the revenue to establish the nexus between expenses incurred and exempt income before making a disallowance under section 14A.

CIT v. Varas International

284 ITR 80 · Supreme Court

citing judgments

An appellate authority can admit additional legal grounds for the first time, even if not raised earlier, provided these grounds are purely legal, go to the root of the matter, and the relevant facts for their adjudication are already on record.

Judgments on Section 41(1)

Nyka Steels P. Ltd., Mumbai vs. DCIT, Panvel Circle, Panvel, Panavel

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

ITA 1780/MUM/2020[2014-15]Status: DisposedITAT Mumbai28 Jun 2022AY 2014-15

For Appellant: Shri S. D. PathakFor Respondent: Shri Aditya Rai (Sr. AR)

Section 133(6)Section 41(1)

Anil Malleshappa Gore, Solapur vs. Income-Tax Officer, Ward 1 (1), Solapur

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

ITA 268/PUN/2020[2014-15]Status: DisposedITAT Pune23 Jun 2022AY 2014-15

Bench: Shri S.S.Godara & Dr. Dipak P. Ripoteआयकरअपीलसं. / Ita No.268/Pun/2020 िनधा"रणवष" /Assessment Year: 2014-15 Anil Malleshappa Gore, The Income Tax Officer, 39, Hotgi Road, Vikas Nagar, Vs Ward-1(1), Solapur. Solapur – 413003. Pan: Afrpg 9615 H Appellant/ Assessee Respondent/ Revenue Assessee By None. Revenue By Shri Arvind Desai – Dr Date Of Hearing 16/06/2022 Date Of Pronouncement 23/06/2022 आदेश/ Order Per Dr.Dipak P.Ripote, Am: This Appeal Filed By The Assessee Is Directed Against The Order Of Ld.Commissioner Of Income-Tax(Appeals)-7, Pune’S, Order Dated 29.11.2019For The Assessment Year 2014-15, Involving Proceedings Under Section 143(3) Of The Income Tax Act, 1961. The Assessee Has Raised The Following Grounds Of Appeal: “1. Addition Of Rs.9,60,697 Made U/S.41(1) By The Assessing Officer & Confirmed By The Commissioner Of Income Tax (Appeals) 7 Pune, Is Unjust.

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

Jenam Enterprises P. Ltd., Mumbai vs. The Asstt. CIT, Range-6(3)(2), Mumbai

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

ITA 387/MUM/2021[2016-17]Status: DisposedITAT Mumbai17 Jun 2022AY 2016-17

Bench: Shri M. Balaganesh () & Shri Pavan Kumar Gadale () Assessment Year: 2016-17

For Appellant: NoneFor Respondent: Mr. S.N. Kabra, DR

Section 143(2)Section 143(3)Section 36Section 36(1)Section 36(1)(iii)Section 41(1)

The ITO, Ward-1(1)(2), Ahmedabad vs. M/S. Anil Tradecom Limited, Ahmedabad

In the result, all the three appeals filed by the Revenue are dismissed

ITA 2703/AHD/2016[2012-13]Status: DisposedITAT Ahmedabad16 Jun 2022AY 2012-13

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year: 2012-13

For Appellant: Shri Abhimanyu Singh Yadav, Sr. DRFor Respondent: None

Section 176(3)Section 36(1)(iii)

Smt. Sunita G. Desai, Ratnagiri vs. Income-Tax Officer, Ward - 1, Ratnagiri

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

ITA 2761/PUN/2017[2009-10]Status: DisposedITAT Pune16 Jun 2022AY 2009-10

Bench: Shri Satbeer Singh Godara, Jm & Dr. Dipak P. Ripote, Am आयकरअपीलसं. / Ita No.2761/Pun/2017 िनधा"रणवष" / Assessment Year : 2009-10 Smt.Sunitag.Desai, The Income Tax Officer, Master Plaza, Jakadevi, Vs Ward-1, Ratnagiri. Khalgaon, Ratnagiri. Pan: Abopd 2868 A Appellant/ Revenue Respondent/ Assessee Assessee By Shri Kishor B Phadke – Ar Revenue By Shri S P Walimbe - Dr Date Of Hearing 21/04/2022 Date Of Pronouncement 16/06/2022 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By The Assessee Directed Against The Order Of Ld.Commissioner Of Income Tax(Appeals)-2, Kolhapur Dated 01.09.2017 For The Assessment Year 2009-10. The Assessee Raised The Following Grounds Of Appeal: “1. The Learned Cit(A)-2, Kolhapur Erred In Law & On Facts In Upholding The Action Of The Learned Ito, Ward-1, Ratnagiri (Hereinafter Referred To As The Learned Ao) In Assessing Total Income Of Appellant At Rs, 50,34,254/- Instead Of Returned Income Of Rs. 4,05,200/-. 2. The Learned Cit(A)-2, Kolhapur Erred In Law & On Facts In Sustaining The Additionof Rs.33,79,054/- Made By The Learned Ao U/S 69C Of The Ita, 1961 For The Bogus Purchases From M/S. Adijin Enterprises & M/S. Hiten Enterprises; Without Appreciating That, No Any Enquiries Were Carried Out By The L-T Authorities In This Regard. 3. The Learned Cit(A)-2, Kolhapur & The Learned Ao Erred In Law & On Facts In Not Appreciating That, The Said Bogus Purchases Of Rs. 33,79,054/- Were, Intact, Capitalized To Plant & Machinery & Depreciation Of Only Rs. 5,06,958/- (I.E. 15% Of Rs. 33,79,054/-) Was Claimed As A Deduction By Appellant During Ay 2009-10. The Learned

Section 133(6)Section 143(3)Section 148Section 32Section 41(1)Section 69Section 69C

Uppal Shah Prop-J K Sugars, Kolhapur vs. Assistant Commissioner of Income-Tax, Circle - 2, Kolhapur

In the result, the cross appeal of the Revenue in ITA

ITA 1954/PUN/2017[2012-13]Status: DisposedITAT Pune16 Jun 2022AY 2012-13

Bench: Shri Inturi Rama Rao & Shri S. S. Viswanethra Ravisl.

For Appellant: Shri Nikhil S. PathakFor Respondent: Shri Shivraj B. Morey &

Section 131(1)(d)Section 133(6)Section 143(3)Section 41(1)Section 68

Assistant Commissioner of Income-Tax, Circle - 2, Kolhapur vs. Uppal Jitendra Shah, Kolhapur

In the result, the cross appeal of the Revenue in ITA

ITA 1893/PUN/2017[2012-13]Status: DisposedITAT Pune16 Jun 2022AY 2012-13

Bench: Shri Inturi Rama Rao & Shri S. S. Viswanethra Ravisl.

For Appellant: Shri Nikhil S. PathakFor Respondent: Shri Shivraj B. Morey &

Section 131(1)(d)Section 133(6)Section 143(3)Section 41(1)Section 68

The ITO, Ward-1(1)(2), Ahmedabad vs. M/S. Anil Tradecom Limited, Ahmedabad

In the result, all the three appeals filed by the Revenue are dismissed

ITA 208/AHD/2018[2014-15]Status: DisposedITAT Ahmedabad15 Jun 2022AY 2014-15

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year: 2012-13

For Appellant: Shri Abhimanyu Singh Yadav, Sr. DRFor Respondent: None

Section 176(3)Section 36(1)(iii)

The ITO, Ward-1(1)(2), Ahmedabad vs. M/S. Anil Tradecom Ltd., Ahmedabad

In the result, all the three appeals filed by the Revenue are dismissed

ITA 2148/AHD/2017[2013-14]Status: DisposedITAT Ahmedabad15 Jun 2022AY 2013-14

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year: 2012-13

For Appellant: Shri Abhimanyu Singh Yadav, Sr. DRFor Respondent: None

Section 176(3)Section 36(1)(iii)

Arcpt Textioles Mills Ltd., Villupuram vs. ACIT Villupuram Circle, Villupuram

In the result, appeal filed by the assessee is treated as

ITA 772/CHNY/2019[2015-16]Status: DisposedITAT Chennai15 Jun 2022AY 2015-16

Bench: Shri G. Manjunatha & Shri Anikesh Banerjeeआयकरअपीलसं./I.T.A.No.772/Chny/2019 ("नधा"रणवष" / Assessment Year: 2015-16) Vs The Assistant Commissioner M/S. Arcot Textiles Mills Ltd Of Income Tax, 14 & 15, Salem Main Road, Villupuram Circle, Ulagankathan Village, Villupuram-605 602. Kallakurichi, Villupuram-606 202. Pan:Aabca 3216C (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr. G.Johnson, Addl.CITFor Respondent: 26.05.2022

Section 115JSection 139(3)Section 234BSection 41Section 41(1)Section 43BSection 72(3)Section 79Section 80

Commissioner of Income Tax, Kolkata-III vs. M/S. Vivada Inland Waterways Ltd

Accordingly, the appeal (ITAT/11/2011) stands dismissed

ITAT/11/2011HC Calcutta06 Jun 2022

Bench: HON'BLE JUSTICE T. S. SIVAGNANAM,HON'BLE JUSTICE HIRANMAY BHATTACHARYYA

Section 260ASection 41(1)

M/S. D.C. Polyester Ltd, Mumbai vs. DCIT Cent. Cir 6(4), Mumbai

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

ITA 1944/MUM/2021[2018-19]Status: DisposedITAT Mumbai03 Jun 2022AY 2018-19

Bench: Shri S Rifaur Rahman & Shri Pavan Kumar Gadaleassessment Year: 2018-19 M/S D C Polyester Limited, Deputy Commissioner Of Income S. V. Industrial Estate, Tax Cc-6(4), Mumbai, Aarey Road, Goregaon (East), Room No. 1925, 19Th Floor, Mumbai - 400063 Vs. Air India Building, Pan: Aaacd3816C Nariman Point, Mumbai - 400021 (Appellant) (Respondent) Assessee By : Shri Ravikant Pathak (Ar) Revenue By : Shri Surendra Kumar (Cit Dr) Date Of Hearing : 26/04/2022 Date Of Pronouncement: 03/06/2022

For Appellant: Shri Ravikant Pathak (AR)For Respondent: Shri Surendra Kumar (CIT DR)

Section 143(1)Section 143(2)Section 28Section 41(1)

ACIT Circle-9(2), New Delhi vs. Foot Mart Retail India Pvt Ltd, Gurgaon

In the result, the appeal of the Revenue is dismissed

ITA 4278/DEL/2019[2013-14]Status: DisposedITAT Delhi31 May 2022AY 2013-14

Bench: Shri Chandra Mohan Garg & Shri Anadee Nath Misshra[Assessment Year : 2013-14] Acit, Vs Foot Mart Retail India Pvt.Ltd., Circle-9(2), Plot No.82, Sec-32, Gurgaon, New Delhi. Haryana-121001. Pan-Aaacf9308F Appellant Respondent Appellant By Shri Sita Ram Meena, Sr.Dr Respondent By None Date Of Hearing 31.05.2022 Date Of Pronouncement 31.05.2022

Section 131Section 133(6)Section 41(1)