TMI Blog1984 (3) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ing year ending is on March 31, 1975. The assessee had debited a sum of Rs. 16,15,458 to the account of premium on purchase of import entitlements for the import of raw materials. The assessee itself did not have any import licence but it purchased the same from other exporters who had been allotted such licences. The entire quota was not utilised in the year of account. Note No. 9(a) in the balance-sheet, Schedule 'D', for the instant year in this connection was in the following terms: "Premium on purchases of import entitlements for import of raw materials aggregating to Rs. 16,15,459 written off in the profit and loss account includes Rs. 9,54,677 being the value of unutilised licences in hand as at March 31, 1975. However, entitlement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) further held that in so far as the import entitlements utilised to the extent of Rs. 58,781 were concerned, a sum of Rs. 69,449 representing the value of the entitlements against the imported materials in stock had been taken in the closing stock and the balance had not been included in the consumption of raw materials since the same had already, been charged off under the head " Premium on purchase of import entitlements ". He held that there was thus no scope to find fault with the method of accounting adopted by the assessee. On the above reasonings, the Commissioner (Appeals) deleted the addition of Rs. 9,54,677. The Department appealed to the Tribunal. The Tribunal held that the assessee incurred the expenditure in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, materials and quota rights, from time to time, and then utilised them in the course of its business. It cannot be laid down as a proposition of law that until and unless the quota rights are utilised or the goods are sold, the amount spent for the purchase of those quota rights or the goods will not be allowable as deduction. No authority is really necessary for this proposition. But on behalf of the assessee our attention was drawn to a decision of the Supreme Court in the case of Travancore Rubber and Tea Co. Ltd. v. Commr. of Agricultural Income-tax [1961] 41 ITR 751, where it was held that the amount expended by the assessee on the superintendence, weeding, etc., of the rubber plantation should be allowed against the profits e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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