TMI Blog2007 (9) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure nor did the assessee claim any deduction in respect of the amount and considering that the assessee is following the mercantile system of accounting, the question of disallowing the deduction not claimed would not arise - 839 of 2007 - - - Dated:- 10-9-2007 - MADAN B. LOKUR and S. MURALIDHAR JJ. P.L. Bansal with Vishnu Sharma, for the appellant. JUDGMENT The judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax (Appeals) ('the CIT(A)') nevertheless disallowed the amount and added it back to the income of the assessee. 3. The CIT (A) was of the view that the assessee had not followed the correct accounting procedure. If it had done so, the amount would have had to be debited to Profit and Loss Account and thereafter the assessee could claim a deduction thereon. The Commissioner relied upon d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him" 5. Learned counsel for the Revenue urges that the decision of the Calcutta High Court in Chow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Profit and Loss Account. Moreover the provisions of Section 43B of the Act are quite clear in this regard. The decision of the Calcutta High Court in Chowringhee Sales Bureau P. Ltd case [1977] 110 ITR 385 was not in the context of the applicability of Section 43B of the Act. 6. In our opinion since the assessee did not debit the amount to the Profit and Loss Account as an expenditure n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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