NDLI: Commissioner of Income Tax, Calcutta Vs. Sugauli Sugar Works {p) Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Income Tax Act Assessee
Content Type	Text
Resource Type	Law Order
Jurisdiction	India
Act(s) Referred	Indian Income-tax Act, 1922 (11 of 1922)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Income Tax Act, 1961 : Section 41 - Applicability of - Necessary condition for. Assessee-Respondent - Private Limited Company - Assessment year 1965-66 - Assessment of tax - Assessee transferred a sum of Rs. 3,45,000 out of the suspense account running from 1946-47 to 1948-49 to the capital reserve account - The Income Tax Officer found that an amount of Rs. 1,29,000 was with reference to the deposits and advances which had been paid back and therefore he included a sum of Rs. 2,56,529 under Section 41 of the Income Tax Act in the total income of the assessee - On appeal by assessee Appellate Assistant Commissioner confirmed the Order of I.T.0. - Tribunal held unilateral entry by assessee in the accounts transferring the amount to the capital reserve account would not bring the matter within the scope of Section 41 - On reference High Court held in favour of assessee - Appeal before Supreme Court - Held view taken by High Court is correct - Section 41 contemplates the obtaining by the assessee of an amount either in cash or in any other manner whatsoever or a benefit by way of remission or cessation and it should be of a particular amount obtained by him - Thus, the obtaining by the assessee of a benefit by virtue of remission or cessation is sine qua non for the application of this Section - The mere fact that the assessee has made an entry of transfer in his accounts unilaterally will not enable the Department to say that Section 41 would apply and the amount should be included in the total income of the assessee - The question whether the liability is actually barred by limitation is not a matter which can be decided by considering the assessee's case alone but it is a matter which has to be decided only if the creditor is before the concerned authority - In the absence of the creditor, it is not possible for the authority to come to a conclusion that the debt is barred and has become unenforceable - There may be circumstances which may enable the creditor to come with a proceeding for enforcement of the debt even after expiry of the normal period of limitation as provided in the Limitation Act.Limitation Act, 1963 : Debt-Recovery of - Period of limitation - Expiry of - Effect - Held does not extinguish the debt - Only prevent the creditor from enforcing the debtor - Mere entry in the books of accounts of the debtor made unilaterally without any act on the part of the creditor will not enable the debtor to say that the liability has come to an end.
Judge	N/A
Neutral Citation	1999 INSC 42
Petitioner	Commissioner Of Income Tax, Calcutta
Respondent	Sugauli Sugar Works {p) Ltd.
SCR	[1999] 1 S.C.R. 400
Judgement Date	1999-02-04
Case Number	2344

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Commissioner of Income Tax, Calcutta Vs. Sugauli Sugar Works {p) Ltd.

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