TMI Blog1998 (2) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... business and, accordingly, in allowing the same as a revenue outgoing for the assessment year 1972-73 ? 2. Whether, on the facts obtaining in this case the Appellate Tribunal was correct in law in holding that the interest received on the deposits with the Electricity Board should not be deducted from the gross total income while determining the relief under section 80-I ?" So far as the second question of law is concerned, it is fairly conceded by learned counsel for the Revenue that the issue raised in the question was considered by this court in the case of the very same assessee in the case reported in CIT v. Seshasayee Paper and Board Ltd. [1994] 207 ITR 80, wherein it was held that the assessee was entitled to deduction under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem to pay a sum of Rs. 42,512 and the assessee claimed that the said amount was an expenditure incurred by the company for the purpose of laying a second siding, that is for the purpose of its business and it is entitled to claim the same as deduction against its business income. The Income-tax Officer held that the expenditure claimed by the assessee was neither revenue expenditure nor the same can be claimed as expenditure incurred for the purpose of the business, nor it has been incurred during the relevant previous year for the assessment year 1972-73 and, therefore, he disallowed the same. The assessee took the matter in appeal before the Appellate Assistant Commissioner who agreed with the view of the Income-tax Officer and held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct. In support of his sub-mission, learned counsel for the assessee relied upon the decision reported in the case of CIT v. Seshasayee paper and Board Ltd. [1994] 207 ITR 80, and certain passages in the law of Income-tax Sampath Iyenger. We have carefully considered the submissions of counsel. We have already set out the facts and circumstances of the case in detail which indicate that the assessee after initially requesting for the construction of the second siding decided to abandon the second siding project during the course of construction of the second siding by the railways. Accordingly, the assessee wrote to the authorities not to proceed with the project. At that precise point of time, when the railways was informed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accrued during the previous year relevant to the assessment year 1972-73 and the Tribunal was correct in holding that the assessee was entitled to the deduction of the liability for the assessment year 1972-73. Since we are holding on the facts of the case that the liability has accrued during the previous year for the assessment year 1972-73, it is unnecessary to consider the decision relied upon by counsel for the assessee. We, therefore, hold that the Tribunal was correct in holding that the sum of Rs. 42,512 incurred by the assessee on account of centage and other expenses paid to Southern Railways was laid out for the purposes of business and arose during the assessment year 1972-73 and, accordingly, we answer the first question also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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