9911796707
TMI Blog1986 (1) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... e claimed this additional sum as deductible allowance. The Income-tax Officer confined the allowance to the original amount of Rs. 9,71,327 for which the assessee had made provision in its books of account for the assessment year. He repelled the claim for the additional liability on the ground that it was incurred after the expiry of the previous year. This view was upheld by the Appellate Assistant Commissioner. The assessee took the matter in appeal to the Tribunal. The Tribunal agreed with the contention urged on behalf of the assessee and held that the liability related to the assessment year in question though it was quantified later. It was, hence, a deductible allowance for the assessment year in question. Another dispute between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the profits and gains of the previous year relevant to the assessment year 1971-72 ? " In respect of the first question, the position is that the amount of additional bonus related to the assessment year 1971-72, that is, after the enforcement of the Payment of Bonus Act, 1965. The Tribunal has rightly found that the liability to pay bonus for the year 1971-72 was a statutory liability under the aforesaid Act. The liability having accrued in the year in question, its quantification subsequent to the expiry of the previous year, will none the less be an allowable deduction for the year in question. Under the Payment of Bonus Act, the assessee is under statutory liability to pay bonus for each accounting year. In other words, the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usive in the matter. It is true that in the present case, the assessee made a provision for Rs. 9,71,327 only in its books of account. But that is not decisive of the matter. The amount payable to satisfy the statutory liability included the additional amount of Rs. 3,93,516. In our opinion, the Tribunal took the correct view of law. The second question is now settled by a Supreme Court decision in Cambay Electric Supply industrial Co. Ltd. v. CIT[1978] 113 ITR 84. In that case, it was held that in computing the profits of the assessee for the purpose of the special deduction under section 80E of the Act, items of unabsorbed depreciation and unabsorbed development rebate carried forward from earlier years will have to be deducted before a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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