TMI Blog2000 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... ability which was correctly claimed by the assessee as a deduction against the business profits for the assessment year 1975-76?" The factual position, as indicated in the statement of the case, is as follows: The assessee is a private limited company which, for the relevant assessment year, i.e., 1975-76, was carrying on the business in the manufacturing and sale of beedis. Originally, the business was carried on by a partnership firm by name Brijlal Manilal and Co. of which one Shri Chintamanrao was the managing partner. The company was incorporated in the year 1971. Shri Chintamanrao became the chairman and the agreed arrangement was that the company would take over the manufacturing operations and sale of beedis to the firm which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in law with regard to the liability was in a state of uncertainty, after the apex court's judgment, liability was quantified and deduction was claimed. As noted above, the Income-tax Officer did not accept the stand on the ground that the liability for two previous years accrued during those years, and not during the year under consideration. The matter was carried in appeal before the Appellate Assistant Commissioner (in short, "AAC"). He dismissed the appeal. The matter was carried in further appeal by the assessee before the Tribunal. It was submitted that because of transitional problems, no quantification could be done and, therefore, the entire amount was allowable as expenditure in the year it was claimed. The Tribunal held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofits and gains of the business such liability which had accrued during the period for which the profits and gains were being computed, It can again not be disputed that the liability to payment of sales tax had accrued during the year of assessment even though it had to be discharged at a future date.". It is fairly accepted by learned counsel for the assessee that, for the purpose of accrual, the decision by any court cannot be the foundation. But he tried to make a distinction in a case where there was divergence of views and the final view of the apex court comes during a particular assessment year. We find no justification to make this distinction in view of the position of law as laid down by the apex court in Kedarnath Jute Mfg. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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