9911796707
TMI Blog1994 (8) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in this regard are that the assessee was required to pay to the Excise department, apart from licence fee and the price of the country liquor which was to be lifted, an amount of Rs. 80,15,872 as "issue price". This amount was to be paid in 12 monthly instalments. Since according to the assessee and also according to detailed explanations and material submitted by the learned counsel for the assessee, this issue price means the price of country liquor calculated at the rate modified by the Excise Commissioner for the exclusive licence of selling country liquor in a particular area, the assessee claimed that it should be allowed a rebate of Rs. 2,39,527 on account of the fact that the country liquor shops had to remain closed on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Court had dealt with the constitutional validity of charging of issue price from the country liquor contractors. In the latter decision the Hon'ble Court has also dealt with the question as to what is the nature and meaning of "issue price". The learned counsel has also filed before us a copy of a Notification No. 15795/Lic. 3, dt. 22nd March, 1985, through which rules under the UP Excise Act, 1910, have been framed. Since according to us, for reasons to be discussed in the following paragraphs, the disallowance of this amount cannot be made under s. 43B and the assessee is entitled to the relief, we are not dealing with the various alternative arguments advanced by the learned counsel for the assessee. 5. In the first instance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivilege under s. 2 and is besides the issue price payable for the minimum guaranteed quantity for the shops or group of shops.". And issue price is the price calculated by Excise Commissioner for the minimum guaranteed quantity. Again on page 7 of the judgment, the Hon'ble Court has observed as under: "In Andhra Pradesh case issue price included not only duty but cost and sales-tax yet it was held by Hon'ble (Supreme) Court that merely because element of excise duty entered the price it could not be held that what was levied was duty." Again on page 8, it is held 'whereas issue price is, no more and no less than the price which the contractors agree to pay for the grant of privilege to sell liquor drawn or undrawn (referring to Prabhakar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther hold that merely because the Hon'ble Allahabad High Court has stayed the payment of this demand against assessee's furnishing of bank guarantee would not mean that the liability to pay has ceased. We hold that under the mercantile system of accounting the liability exists notwithstanding the fact that the assessee is contesting it. However, in case at a later point of time the issue is decided in favour of the assessee by the Court and there is a cessation of liability the amount may be taxed according to the provisions of the IT Act. However, so far as the present appeal is concerned, the disallowance of Rs. 2,39,527 is directed to be deleted. 8. Next objection of the assessee is regarding an addition of Rs. 25,000 to the trading res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his would mean that even the Assessing Officer had conceded that such expenses have to be incurred by country liquor contractors. However, in the appeal filed by the Revenue the reduction given by the learned CIT(A) has been challenged on the ground that such expenses are not fully vouched and no details are available and the excise officials have denied reimbursement of such expenses by the licensees to them. If what the Revenue has contended were to be accepted, even the amount allowed by the Assessing Officer should not have been allowed but we agree with the observation of the learned CIT(A) that looking to the nature of the assessee's business and the general social conditions and conditions of the law and order such expenses have got ..... X X X X Extracts X X X X X X X X Extracts X X X X
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