Held that when the person from whom the amount was borrowed, had written off the amount in his accounts, the liability ceased to exist. As there is cessation of liability, the same could not be part of the assessee’s sundry creditors. Therefore, the addition made under section 41(1) as cessation of liability is justified. AY.2014-15)
Maideen Pitchai Rawther Peer Mohammed v. ACIT (2024)116 ITR 71 (SN)(Chennai)(Trib)
S. 41(1) : Profits chargeable to tax-Remission or cessation of trading liability-Goods purchased from brother-Writing off dues as personal help-Liability ceasing to exist on written off by creditor in his books-Addition is justified.