Dismissing the appeal of the revenue the Court held that; when the liability qua the amount which was still standing in the balance-sheet of the assessee, which fact had not been disputed by the Assessing Officer, the liability could not be said to have ceased in terms of S. 41(1) of the Act . ( AY.2005-06)
CIT v. Eco Auto Components Pvt. Ltd. (2018) 409 ITR 202 (P&H) (HC)
S. 41(1) : Profits chargeable to tax – Remission or cessation of trading liability -Liability continued to be shown in balance-sheet — Addition cannot be made as deemed income.