TMI Blog1997 (1) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government of Tamil Nadu and representing the excess collection made by the assessee should not be included while computing the income for the assessment year 1974-75? (2) Whether, on the facts and in the circumstances of the case and having regard to rule 19A(3) of the Income-tax Rules, 1962, the Appellate Tribunal was correct in holding that 'borrowed capital' should not be deducted from the capital for the purposes of relief under section 80J of the Income-tax Act, 1961?" In so far as question No. 2 is concerned, the point for consideration is whether having regard to rule 19A(3) of the Income-tax Rules, 1962, "borrowed capital" should be deducted from the capital for the purpose of relief under section 80J of the Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in determining the total income. On appeal, the Appellate Assistant Commissioner deleted the addition on considering that the assessee had not disputed the Government's claim for recovery of the differential cost and that part of it was, in fact, refunded in instalments. According to the Appellate Assistant Commissioner, the Government initially informed that the differential price should be refunded by the assessee, which demand falls within the accounting year, relevant to the assessment year. The Appellate Assistant Commissioner came to the conclusion that the excess collection made by the assessee and payable to the Government is allowable as deduction in the assessment year under consideration. On appeal, the Tribunal confirmed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both learned standing counsel appearing for the Department as well as learned counsel appearing for the assessee. In the present case, the liability as well as quantification was made prior to the close of the accounting year by the Government letters, dated August 2, 1973, and September 11, 1973, respectively. What the Government letter, dated August 12, 1974, did was to more precisely quantify the amount refundable by the assessee for a part of the accounting year, i.e., for the period from September 1, 1973, to March 31, 1974, fixing the issue rate at 0.57.72 paise and 0.58.13 paise and the rate of refund at 0.12.28 paise and 0.11.07 paise per litre. Therefore, when the arrack was sold the Government has informed the assessee that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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