TMI Blog1998 (4) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ng question' to be referred to us arising out of the respondent's assessment of the income for the assessment year 1980-81. The respondent-Anna Transport Corporation---is an undertaking wholly owned by the Government of Tamil Nadu. It took over 49 buses from the erstwhile Tamil Nadu Transport Department at book value of Rs. 22,73,513, against which, it paid a sum of Rs. 2,52,720 leaving a balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Commissioner as also the Tribunal have held that the liability to pay this interest for the earlier years arose only in the relevant year and, therefore, the payment made in that year qualifies as a proper deduction from out of the gross income of the assessee for that year. We do not find any error in the view so taken by the Tribunal. Even when an assessee is following the mercantile syst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of interest. It is only when the Government, five years later, decided that the amount should be treated only as a loan and as a loan bearing interest at the rate of 18 per cent., that the Corporation was made aware of its liability, and after providing for the same, it had also effected payment. The Tribunal was, in the circumstances, right in holding that the payment so made qualifies as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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