Explanation 1 to Sec 41(1) of the Act is not applicable on the cases prior to the said explanation come in to force

Last updated: 07 February 2012

Court :
HIGH COURT OF DELHI

Brief :
In the return of income the aforesaid amount was claimed to be not taxable under the Act. The Assessing Officer called upon the assessee to explain how the aforesaid items were not taxable. In response to the query, the assessee submitted a written reply dated 18th December, 1998. Briefly stated, the assessee took up the plea that the aforesaid items did not represent any expenditure or loss or liability allowed in any of the earlier years as a deduction, that the amount of Rs.10,72,329/- represented small credit balances in the account of the customers and suppliers out of advance received from them for supplies to be made subsequently which they did not collect or which could not be fully adjusted against the supplies made to them, that the essential requisites for invoking Section 41(1) of the Act were absent, that Section 28(iv) was also not applicable and that in these circumstances the aggregate amount of Rs.17,39,263/- cannot be brought to tax.

Citation :
COMMISIONER OF INCOME TAX (CENTRAL)-I ..Appellant Through Mr.Sanjeev Sabharwal, Advocate. VERSUS MOHAN MEAKIN LIMITED …..Respondent Through Mr. C.S.Aggarwal, Sr.Advocate with Mr.Prakash Kumar,Advocate.

Daily Limit Reached