TMI Blog1989 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of paddy, husking it and selling the rice. Ninety-five per cent. of rice had to be sold to the Government under the Punjab Rice Procurement (Levy) Order at specified rates. For the assessment years 1975-76 and 1976-77, the liability for payment of purchase tax accrued during the relevant accounting periods as the assessee was following the mercantile system of accounting. The assessee cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant to the assessment year 1977-78, on the ground that when an assessee follows the mercantile system of accounting, the deduction has to be claimed on the accrual of liability and relied upon certain decisions. Against the aforesaid order of the Income-tax Officer, the assessee took the matter in appeal and the Commissioner of Income-tax (Appeals) allowed the relief. The Income-tax Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction cannot be allowed. That case is fully applicable to the facts of the present case. We had also an occasion to deal with this type of matter in Sirsa Industries v. CIT [1989] 178 ITR 437 (P H) and took the same view following the decision of the Supreme Court in Kedarnath Jute Manufacturing Co. v. CIT [1971] 82 ITR 363, although, on the facts of that case, the matter was decided in favo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT [1988] 169 ITR 374 (Orissa) ; and (ii) Shalimar Chemical Works Pvt. Ltd. v. CIT [1987] 167 ITR 13 (Cal), Both the cases are distinguishable. The first was the case of additional liability. According to the view taken in the second case, the crucial date for claiming deduction would be the date when the writ was decided. In this case, the writ petition was decided during the period relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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