| Question And Answer | |
|---|---|
| Subject: | Cessation of liabilities + 41(1) taxability |
| Category: | Income-Tax |
| Querist: | Dushyant Maharishi |
| Answered by: | Research Team |
| Tags: | Cessation of liabilities, cessation of lliability, section 41(1) |
| Date: | November 25, 2022 |
Is there any case law which favours the assessee that the creditors have been shown in balancesheet for more than 10 years but profitability u/s 41(1) should not be arise in case of closure of business also.
Refer PCIT v . Batliboi Environmental Engineering Ltd. (2022)446 ITR 238 (Bom) (HC) dismissing the appeal of the Revenue the Court held that debts barred by limitation do not cease to be debts . Not to be treated as income . referred , CIT v. Indian Rayon and Industries Ltd ( 2011) 336 ITR 479( Bom)(HC) .
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