TaxTMI 
TaxTMI 
2026 (9) TMI 979
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....ssed under section 143(3) read with section 144B of the Act for the assessment year 2022-23. 2. The assessee has raised the following grounds of appeal: "1. The Faceless Assessment Unit has erred in law and on the facts of the case in making an addition of Rs. 11,20,01,579/- under section 41(1) of the Income Tax Act. The action is unjustified and unwarranted as there is no cessation of liability. Without prejudice, the addition is excessive. 2. The Faceless Assessment Unit has erred in law and on the facts of the case in disallowing depreciation of Rs. 18,15,713/-. The action is unjustified and unwarranted. 3. Your petitioner craves leave to add, amend, alter and/or withdraw the aforesaid grounds of appeal." ....
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....esentative submitted that the interest expenditure comprising the impugned liability had been added back under section 43B of the Act in assessment years 2003-04 and 2004-05, as it had not been paid. Thus, no allowance or deduction in respect of the said liability was ever granted and a further addition under section 41(1) would amount to taxing the same amount twice. He further submitted that the loan as well as the interest liability continues to appear in the balance sheet and has not been written back. Neither The assignee has not waived the liability and no one-time settlement has been accepted. Therefore, there is neither remission nor cessation of liability. Reliance was placed, inter alia, on the judgment of the Hon'ble Supreme ....
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....ther been controverted by the Assessing Officer nor displaced by the learned CIT(A). Once the corresponding expenditure was not allowed as a deduction, the foundational condition of section 41(1) fails. Taxing the very same liability again under section 41(1) would result in an impermissible double addition. 8. Even otherwise, the second condition of remission or cessation is not fulfilled. The liability of Rs. 11,20,01,579/- continued to be disclosed in the balance sheet as at 31.03.2022 and, as demonstrated before the learned CIT(A), also in the succeeding balance sheets as at 31.03.2023 and 31.03.2024. It has not been written back by the assessee. There is no material showing that the asset reconstruction company waived the interest, ....
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....4 ITR 299 (Delhi) and Solid Containers Ltd. v. DCIT [2009] 178 Taxman 192 (Bom.), the liabilities or loans had been written back by the assessee's. Likewise, CIT v. T.V. Sundaram Iyengar & Sons Ltd. [1996] 222 ITR 344 (SC) concerned amounts received in the course of business which, by lapse of time and their treatment by the assessee, had become the assessee's own money. Here, there is no write-back, waiver, settlement, discharge or appropriation of the lender's money by the assessee. Those authorities are therefore distinguishable on facts. We accordingly hold that section 41(1) has no application and direct the Assessing Officer to delete the addition of Rs. 11,20,01,579/-. Ground No.1 is allowed. 12. Coming to depreciation, th....