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of <h1>Court rules amount as income for assessment year, rejecting assessee's argument.</h1> The court ruled in favor of the Revenue, holding that the amount in question should be considered as income of the assessee for the assessment year. The ... Income, When Assessable As Income Issues involved: The issue involves the interpretation of u/s 41(1) of the Income-tax Act, 1961, regarding the treatment of a certain amount as income of the assessee. The main question is whether the Tribunal rightly confirmed the deletion of the amount added by the Income-tax Officer.Summary:The Tribunal referred the question of law regarding the treatment of an amount as income u/s 41(1) of the Income-tax Act, 1961. The assessing authority treated the amount as income, but the Appellate Assistant Commissioner (AAC) held otherwise, stating it was not the income of the assessee. The AAC's decision was upheld by the Tribunal.The assessee claimed that the amount represented unclaimed cane price and should not be considered a trading receipt. The key issue was whether the provisions of u/s 41(1) of the Act could be applied to tax the amount. The assessing authority found that the conditions for taxation were met, as the amount had been allowed as a deduction in a previous year and the assessee had benefited from the cessation of liability regarding the amount.The court discussed various judicial precedents on the matter, emphasizing that if the assessee treated the amount as income in the profit and loss account, it should be considered income unless proven otherwise. The court highlighted the importance of the assessee's reasons for treating the amount as income and the necessity to establish the cessation of liability.The court differentiated this case from previous judgments where the liability did not cease despite the amount being entered in the profit and loss account. The court emphasized that in this case, the liability had ceased due to the remedy of the cane-growers being barred by limitation.Ultimately, the court ruled in favor of the Revenue, stating that the amount should be considered as income of the assessee for the assessment year, as the reasons for forfeiting the amount were not adequately explained.
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