When the assessee has not written back the liability on account of trade payables in its Profit and Loss A/c and proceedings with respect to the winding up of the assessee company are pending before an authority(AAIFR) then no liability can be fastened upon the assessee as there has been no cessation of liability. (AY. 2013-2014)
Dy. CIT v. Pasupati Fabrics Ltd. (2019) 74 ITR 411 (Delhi)(Trib. )
S. 41(1) : Profits chargeable to tax-Remission or cessation of trading liability–liability on account of trade payable is not written back in profit and loss account–No cessation of liability–Addition cannot be made. [S. 2(12A)]