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2002 (4) TMI 27 - HC - Income Tax"1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law allowing interest paid to third parties placing reliance on the judgment of CIT v. Jain Construction Co. whereas in the said judgment, the High Court has not held that interest to third parties are allowable out of income arrived by applying net profit rate? - 2. Whether, on the facts and in the circumstances of the case and position of law, the Income-tax Appellate Tribunal was justified in giving the relief on account of the sales tax refund which was credited by the assessee-firm itself in his profit and loss account and declared it as the part of its income under section 41(1) of the Act?" - we are of the opinion that the basic condition for invoking section 41(1)(a) of the Act has not been satisfied in the case. The amount of sales tax refund in the hands of the assessee during the previous year relating to the assessment year in question, cannot be deemed to be income of that year, merely on the basis of drawing inferences that it might have been allowed as deducted in the earlier assessment years. - The appeal therefore fails and is hereby dismissed
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