https://www.taxtmi.com/caselaws?id=261055 The High Court of Bombay dismissed the revenue's appeal challenging the addition made under Section 41(1) of the Income Tax Act, 1961 for outstanding creditors in the respondent's books. The court upheld the decision of the Commissioner of Income Tax (Appeals) and the Tribunal, ruling that as the liability was acknowledged in the balance-sheet, there was no cessation of liability triggering Section 41(1). The court emphasized that acknowledging the amount due to creditors in the balance-sheet constitutes acknowledgment of liability, and the introduction of Explanation1 to Section 41 in 1997 did not apply in this case. The appeal was dismissed without costs. en-us Tue, 16 Jun 2015 00:00:00 +0530 Wed, 01 Jul 2015 06:46:53 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=261055 The High Court of Bombay dismissed the revenue's appeal challenging the addition made under Section 41(1) of the Income Tax Act, 1961 for outstanding creditors in the respondent's books. The court upheld the decision of the Commissioner of Income Tax (Appeals) and the Tribunal, ruling that as the liability was acknowledged in the balance-sheet, there was no cessation of liability triggering Section 41(1). The court emphasized that acknowledging the amount due to creditors in the balance-sheet constitutes acknowledgment of liability, and the introduction of Explanation1 to Section 41 in 1997 did not apply in this case. The appeal was dismissed without costs. Case-Laws Income Tax Tue, 16 Jun 2015 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=261055