|Question And Answer|
|Subject:||Cessation of liabilities + 41(1) taxability|
|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) .