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2004 (1) TMI 58 - GUJARAT HIGH COURT"Whether, Tribunal is right in coming to the conclusion that the amount of Rs. 1,18,920 representing income tax liability of the erstwhile firm and paid by the assessee company cannot be allowed as deduction as an expenditure while computing the taxable income in the hands of the assessee?" - assessee was one of the partners of the erstwhile firm and the assessee had agreed to take over the tax liabilities of the erstwhile firm at the time of dissolution. Hence, under the provisions of section 189 also, the assessee was bound to pay the income tax dues of the erstwhile firm – Thus, our answer to the question is in the affirmative, i.e., in favour of the Revenue and against the assessee.
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