Capitalization of "other expenses" debited to P&L as project cost disputed; disallowance set aside and remanded; s.41(1) not attracted

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....Capitalization of expenses debited to profit and loss and later treated as project cost cannot be disallowed where assessing officer failed to verify documentary evidence and ignored audited financial statements; matter should be remanded for limited verification and enquiry and disallowance is not sustained. Where a creditor writes off a debt, unilateral write-off does not automatically extinguish the assessees liability absent bilateral settlement or clear remission; reliance solely on the creditors action without evidence of discharge violates principles of continuing liability and natural justice, so cessation-based disallowance is not attracted.....