In this article we shall be discussing some important aspects of remission of trade liability or the cessation of the liability. Before we come to the actual tax planning aspects and the important judicial pronouncements through which the assessee can adopt tax planning with regard to remission of trade liability, it is better to understand and know the provisions of the Income-tax law on this aspect which are contained in S. 41(1) of the Income-tax Act, 1961 and they are as under : "Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and subsequently during any previous year the assessee has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of trading liability by way of remission or cessation thereof, the amount obtained by him or the value of benefit accruing to him shall be dee ....