Question And Answer
Subject: Cessation of liabilities + 41(1) taxability
Querist: Dushyant Maharishi
Answered by:
Tags: , ,
Date: November 25, 2022
Query asked by Dushyant Maharishi

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.

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Answer given by

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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