DIPAK KUMAR SEN, J.

( 1 ) M/s. B. N. Elias and Co. (P.) Ltd. , the assessee, was assessed to income-tax in the assessment year 1971-72, the relevant accounting year ending on September 30, 1970. The assessee had 127 creditors to whom diverse amounts were due by the assessee by way of sundry trade liabilities aggregating to Rs. 1,81,380. The said dues had remained unclaimed for more than three years and in the accounting year involved, the assessee wrote off the said debts in his accounts making corresponding credit entries in the profit and loss account. The assessee contended that the said amount was not taxable as there was neither remission nor cessation of the liabilities. The Income-tax Officer found that the amounts had remained unclaimed for the years in question, that they had become barred by limitation and the assessee's liabilities for the claims had ceased. He held that the said amount should be treated as business income of the assesses under Section 41 (1) of the Income-tax Act, 1961, in the said assessment years.

( 2 ) ON an appeal preferred by the assessee, the Appellate Assistant Commissioner held that cessation of a liability need not necessarily flow from any o

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