Is amount disallowed u/s 41(1) if the assessee has not reconciled and adjusted the receivables?

Last updated: 13 September 2021
Quick Summary
The Income Tax Appellate Tribunal ruled that an amount disallowed under Section 41(1) was not applicable. The assessee had received advances for sales/services prior to 2003, which remained outstanding due to the company's closure. These were later reconciled and adjusted to receivables in subsequent years, and the balance sheet showed no outstanding advances as of March 31, 2016. The tribunal found no cessation of liability or remission, upholding the CIT(A)'s order.

Court :
ITAT Bangalore

Brief :
The above appeal was disposed of by the ITAT vide its order dated 31.01.2018. The Revenue filed Miscellaneous Petition in MA No.263/Bang/2018 for the limited purpose of non-adjudication of ground Nos. 4 and 5 by the ITAT in its order dated 31.01.2018.

Citation :
ITA No.1223

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1999
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