Loan-to-Equity Conversion Not Taxable; No Cessation of Liability u/s 41(1) of Income Tax Act.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Cessation of liability u/s 41(1) - conversion of the loan as well as the unpaid interest into share capital - when there was no writing off of liabilities and only the sub-head, under which, the liability was shown in the account books of the assessee was changed and it continued to remain liable to pay even after change of entries, there could be no cessation of liability - not taxable....