TMI Blog1993 (10) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajasthan Land and Building Tax Act, 1961, on May 23, 1978, being a statutory one is a liability in praesenti and, therefore, the same merits to be allowed as a deduction in computing the total income of the assessee for the year under consideration ?" The brief facts of the case are that the assessee claimed a sum of Rs. 11,900 in respect of liability of tax under the Rajasthan Land and Building Tax Act, 1961. The Income-tax Officer found that the assessee is maintaining his account on the mercantile basis and the amount relates to the years earlier to the assessment year. The deduction was accordingly disallowed. In the appeal before the Commissioner of Income-tax (Appeals), Rajasthan, it was found that the demand relates to financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [1983] 139 ITR 1059 has held that the deduction in respect of urban land tax for several years which has been paid during the relevant accounting year has to be allowed while computing the income from house property under section 24(1)(vii) of the Income-tax Act, 1961. In CIT v. V. Krishnan [1980] 121 ITR 859, the Madras High Court has held that the liability to sales tax could be allowed in the year of transactions or the year in which it has been paid and not in the year in which the demand has been raised. The law in this regard is settled by the decision of the apex court in the case of Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363, wherein it was observed : "it is not possible to comprehend how the liability can cease to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each of the years and the assessee has paid the tax which was due according to him. The order which had been passed on May 23, 1978, created the additional liability which cannot be compared with those cases where the tax liability has accrued in a year and has not been claimed in that year. The assessee had paid the tax that was due according to him. The tax which was admitted by the assessee had already been paid and it is only the excess additional tax liability which has been created by the assessment order and the demand notices issued. Before such assessment order, there was no quantification and it could not be said that the additional liability which has been created by virtue of the assessment order was ascertained even before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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