2013 (2) TMI 17

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....nder consideration relating to assessment year 1972-73 where it already stood allowed, cannot be taxed by invoking the provisions of section 41(1) of the I.T. Act, 1961?" 2. Briefly stated the facts giving rise to the present Reference are as follows: The Reference relates to the Assessment Year 1976-77. The respondent-assessee had filed its return declaring loss of Rs. 73,90,600/- The assessment was, however, completed on the net loss of Rs. 28,54,873/-. While computing the loss the Assessing Officer had made an addition of Rs. 32,39,929/- under Section 41(1) of the Act. It was noticed that the assessee had written back all the gratuity provided in its accounts for the earlier years to the credit of profit and loss appropriation acco....

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..... He, therefore, held that the addition by invoking the provisions of Section 41(1) of the Act cannot be sustained and, therefore, the addition of Rs. 32,99,929/- was deleted. The Revenue feeling aggrieved preferred an appeal before the Tribunal, which confirmed the order of the Commissioner of Income Tax (Appeals). 3. We have heard the learned counsel for the parties. 4. Learned counsel for the Revenue submitted that as the assessee has written back the amount of gratuity of Rs. 32,39,929/- during the previous year relevant to the assessment year in question, which amount was allowed in the Assessment Year 1972-73, therefore, the Assessing Officer has rightly invoked the provisions of Section 41(1) of the Act by adding back the said ....

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...."3. It will be seen that the following words in the section are important: "the assessee had obtained, whether in cash or in any other manner whatsoever any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him". Thus, the section contemplates the obtaining by the assessee of an amount either in cash or in any other manner whatsoever or a benefit by way of remission or cessation and it should be of a particular amount obtained by him. Thus, the obtaining by the assessee of a benefit by virtue of mere fact that the assessee has made an entry of transfer in his accounts unilaterally will not enable the Department to say that s.41 ....