1985 (1) TMI 51

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..... me-tax Appellate Tribunal, Indore Bench, Indore, at the instance of the Revenue has made this reference under s. 256(1) of the I.T. Act, 1961, to this court to answer the following question of law : " Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in allowing the sum of Rs. 3,258 being sales tax for the assessment year 1973-74 ? " We may point out at .....

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..... he manufacture of aluminium conductors, winding wires, armatures, etc. On the scrutiny of the accounts for the assessment year 1977-78, the IAC (Assessment) noted that the assessee-company in the sales tax account had made the payment of Rs. 2,129 plus Rs. 3,258 as sales tax relating to the earlier years, i.e., for the assessment year 1971-72 and 1974-75, respectively. When asked to explain the sa .....

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..... elying on the decision of the Supreme Court in Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363, the IAC (Assessment) held that the liability of sales tax relating to one year is to be charged for that particular year even if the tax is disputed in appeal. In the result, he added back the sum of Rs. 2,129 and Rs. 3,258 to the income of the assessee. In appeal, the CIT (Appeals), so far as the .....

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..... ough SPC was issued. We have heard the learned counsel for the Revenue who submitted that the Tribunal has committed an error in holding that the liability for the sales tax arose during the accounting year relevant to the assessment year 1977-78 and was, therefore, deductible for 1977-78. He, therefore, submitted that the assessee has been maintaining accounts on the mercantile basis and, theref .....

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..... in which the tax liability arose. He also placed reliance on a Division Bench decision of this court in M.C.C. No. 178 of 1983 decided on November 28, 1984, CIT v. Ratlam Straw Board Pat. Ltd. [1985] 152 ITR 425, where similar question arose. In the result, the question has to be answered in favour of the Revenue and against the assessee. Our answer to the question, therefore, is that: On the f .....

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