TMI Blog1989 (9) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... quality Rs. 1977-78 1974-75 11-7-75 140.31 1978-79 1975-76 29-11-75 140.31 1978-79 1975-76 9-2-76 142.66 1979-80 1976-77 19-11-77 155.26 1980-81 1977-78 1-3-78 173.29 1981-82 1978-79 17-12-79 157.87 1982-83 1979-80 17-12-79 212.58 The assessee considered the reduction in prices to be unjustified in view of the fact that the cost of production every year had increased. The assessee accordingly filed writ petitions in Bombay High Court against each of the said notifications. The High Court admitted the writ petitions and by interim order stayed operation of the subsequent notifications till the final disposal of the writ petitions and allowed the assessee to receive from the purchaser (Government of India or nominees) price for levy sugar sold as under: Season Asst. Year Price allowed by Hon ble High Court to be received from purchaser Rs.per qtl. 1975-76 1978-79 156.99 1976-77 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitions in Bombay High Court and similar interim orders have been passed by the High Court in those cases. The question of taxability of such excess price received by the sugar factories had been considered by the Special Bench of the Tribunal in the case of SHRI SOMESHWAR SAHAKARI SAKHAR KARKHANA (PUNE) LTD. vs. ITO (1985) 21 TTJ (Pune) (SB) and it was held that such excess amounts were mere deposits till the final disposal of the writ petitions and that they did not constitute income of the assessee society in the year of receipt. As the facts were identical with the facts in said decision given by the Special Bench of the Tribunal, CIT(A) has allowed the appeals of the assessee and directed the ITO not to include the said amount in the total income of the assessee. The Department has now come in appeals before us. 4. After hearing the parties, we find that the point in controversy has been covered in favour of the assessee and against the Department by the said decision of the Special Bench of the Tribunal. We respectfully follow the said decision and reject the grounds raised by the Department. 5. We now come to two appeals filed by the assessee. The first appeal rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted before him that the amount had not been finally settled. Consequently, according to him, the amount did not represent allowable deduction. He held that the principle laid down by the Supreme Court in the case of KEDARNATH JUTE MFG. CO. LTD. was not applicable. He observed that the proper course for the assessee was to claim allowance of this amount only in the year when the matter is finally decided by the court. According to him, the claim was premature in the circumstances of the case. 7. The assessee filed appeal before the CIT(A). The CIT(A) held that the principle laid down by the Supreme Court in the case of KEDARNATH JUTE MFG. CO. LTD. was applicable when there was existence of statutory liability. In the present case there was no statutory liability. On the other hand there was disputed liability which had not crystallised. He referred to the fact that no provision had been made in the account books in respect of this liability. He accordingly confirmed the rejection of the claim in respect of this liability. He observed that the assessee was at liberty to claim this amount as and when the dispute is finally settled by the Court. According to him even as per commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said to have crystalysed. We hold that the assessee would be entitled to claim deduction in the year in which the liability gets crystalised finally by the order of the court or by subsequent mutual agreement. The deduction was not allowable in the assessment year 1978-79. We accordingly reject the ground raised by the assessee. 9. We now come to the assessee s appeal for the assessment year 1980-81. The assessee had paid Rs. 50,000 to the State Government of Maharashtra as contribution to Education fund, Maharashtra State. This payment was made under the provisions of s. 68 of the Maharashtra Co-operative Societies Act, 1960 read with r. 52 of the relevant rules. The assessee claimed deduction in respect of this amount on the ground that it represented revenue expenditure. The ITO held that the provisions of s. 68 of the Maharashtra Co-operative societies Act did not create any charge on the profits of the assessee and that the payment was only appropriation of profits. He accordingly disallowed the claim. The assessee filed appeal before the CIT(A). the CIT(A) relied on certain decisions of the Tribunal and confirmed the disallowance. The assessee is now in further a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal. 11. The learned Departmental Representative, on the other hand, submitted that all the aspects to which our attention had been drawn has been considered by the special bench and as such we should follow the decision of the Special Bench of the Tribunal. It was submitted that the provisions of Karnataka act were materially different from those of the Maharashtra Act and as such the decision of the Karnataka High Court was not applicable. It was submitted that the provisions of Tamil Nadu co-op. Act. Were similar to the Maharashtra Co-op. Act and that decision of the Madras High Court which has been relied on in the Special Bench decision and which is reported as CIT vs. SOUTH ARCOT DISTRICT CO-OP. SUPPLY MARKETING SOCIETY LTD. (1981)127 ITR 467 (Mad) should be followed. 12. We have considered the rival submissions. We do not accept the submission on behalf of the assessee to the effect that the special bench has not considered all the aspects which have been mentioned by him. All these aspects have been duly considered by the Special Bench of the Tribunal. The Tribunal has examined in detail the relevant provisions of the Act and has come to the conclusion that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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