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Issues:
Assessment of addition of Rs. 10,17,371 under IT Act, applicability of s. 41(1) and s. 28(iv), benefit or perquisite arising from an agreement, consideration for relinquishment of liability. Analysis: 1. The appeal pertains to the assessment year 1976-77 and challenges the deletion of an addition of Rs. 10,17,371 owed by the assessee to Indian Tobacco Co. The amount represented an advance made by the company against supplies of processed fish products. An agreement was reached where the assessee provided possession of a canning plant to the company in exchange for relinquishing mutual claims. 2. The Income Tax Officer (ITO) assessed the sum under s. 41(1) of the IT Act, but the CIT (A) disagreed, stating that the amount was not allowed as a deduction previously. The revenue argued for assessment under s. 28(iv) as a business income benefit. The assessee contended that the relinquishment was adequately compensated by the plant's use for 5 years, making it not assessable under s. 28(iv). 3. The revenue introduced the s. 28(iv) argument as a new ground, contending it as a business income benefit. The assessee maintained that the consideration for the relinquishment adequately compensated for the liability, precluding assessment under s. 28(iv) without evidence of inadequacy. 4. The Deptl. Rep. argued for considering s. 28(iv) despite not being previously assessed, emphasizing the assessability of the sum in question. 5. The Tribunal dismissed the appeal, stating that the agreement's terms adequately compensated for the liability, making it not assessable as income. The revenue's late introduction of s. 28(iv) was rejected due to lack of evidence on consideration adequacy, and no prior indication of inadequacy in the assessment process. 6. The appeal was dismissed, affirming that the sum was not assessable as income for the assessment year due to the agreement's terms adequately compensating for the liability.
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