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2010 (1) TMI 8 - HC - Income TaxCessation of liability – Addition u/s 41(1) - assessee had received an order from Premier Automobiles Limited (PAL) for supply of components for Fiat Automobiles manufactured by the latter. PAL advanced a sum of Rs 50 lacs to the assessee towards capital cost to be incurred by the assessee for development/ procurement of tools, jigs, dies, fixtures and moulds – subsequently due to strike production was suspended – assessee subscribed the convertible debenture of sister concern of PAL – later assessee writ off the advance and debenture from debit and credit side of balance sheet – AO made the addition of 50 Lac – held that - writing off the said amount would not attract provisions of Section 41(1) of the said Act - Both the amounts on debit and credit side have been written back/ off resulting in no benefit to the assessee. The assessee had not become richer by any amount – Addition can not be made – Order of ITAT was correct
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