https://www.taxtmi.com/caselaws?id=783557 Section 41(1) could be invoked only upon remission or cessation of a trading liability in respect of which a prior deduction/allowance was granted, typically evidenced by write-back/credit in the profit and loss account; since the impugned liability was a loan (capital liability) used to repay a bank loan, no amount was debited to the profit and loss account, and the liability continued as outstanding without any write-back or recovery, section 41(1) was held inapplicable and the deletion of addition was sustained. Explanation 1 to section 41(1) applies only to cessation of trading liabilities by mutual understanding or unilateral act; as there was no unilateral write-off and the liability was acknowledged as outstanding, Explanation 1 was also held inapplicable and the Revenue's appeal was dismissed. en-us Fri, 12 Dec 2025 00:00:00 +0530 Thu, 18 Dec 2025 08:01:59 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=783557 Section 41(1) could be invoked only upon remission or cessation of a trading liability in respect of which a prior deduction/allowance was granted, typically evidenced by write-back/credit in the profit and loss account; since the impugned liability was a loan (capital liability) used to repay a bank loan, no amount was debited to the profit and loss account, and the liability continued as outstanding without any write-back or recovery, section 41(1) was held inapplicable and the deletion of addition was sustained. Explanation 1 to section 41(1) applies only to cessation of trading liabilities by mutual understanding or unilateral act; as there was no unilateral write-off and the liability was acknowledged as outstanding, Explanation 1 was also held inapplicable and the Revenue's appeal was dismissed. Case-Laws Income Tax Fri, 12 Dec 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=783557