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2005 (7) TMI 71 - HC - Income Tax"Whether the Tribunal was right in treating the amount of Rs. 23,66,695 (the amount which was written off by the sister concern of the assessee) as the income in the hands of the assessee and on that count liable to be taxed under section 41(1) of the Income-tax Act?" - It is well settled that the Revenue can add a sum to the assessee's income under section 41(1) of the Income-tax Act only if it can prove that the allowance or deduction has been made in the assessment in the previous year in respect of the loss, expenditure or trading liability - A perusal of the impugned order of the Income-tax Appellate Tribunal shows that there was no finding of the Tribunal that any deduction or allowance was made in the assessment of the assessee in an earlier year. In the circumstances, we set aside the impugned order of the Tribunal and remand the matter to the Tribunal for a fresh decision in accordance with law – appeal is allowed
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