TMI Blog1981 (1) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure for the assessment year 1968-69 ? " The facts relevant to the first question are as follows: The assessee deals in the business of manufacture and sale of biris. In the previous year relevant to the assessment year 1968-69, the shop of the assessee at Meerganj was set on fire in communal disturbance. According to the assessee, a wall clock of the value of Rs. 100, 40 bags of biris valued at Rs. 10,400, match boxes of the value of Rs. 3,794, furniture worth Rs. 1,500 and cash amount of Rs. 5,000 were burnt. The total loss was calculated by him at Rs. 20,795 and he claimed the deduction thereof from the income of the year. The ITO did not accept the claim nor was it accepted by the AAC and the Appellate Tribunal. Obviously, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t statement. In the context of what has been said above, it cannot be held that the I.T. authorities committed any error in disallowing the claim of Rs. 20,795. The facts relevant to the second question are as follows: As already stated earlier, the assessee deals in the business of manufacture and sale of biris. By the notification published in the U.P. Gazette, Extraordinary, dated 14th December, 1957, it was provided that no tax was payable with effect from December 14, 1957, in respect of biris provided that the additional central excise duties leviable thereon from the close of business on December 13, 1957, had been paid. Another notification published in the same Gazette provided that no tax under the Central Sales Tax Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vacated on October 16, 1957. Thereafter, an amount of Rs. 1,91,887 was paid (out of the aforesaid amount of Rs. 1, 96,351) by the assessee. He claimed exemption for this amount in the year 1968-69, on the ground that the actual payment was actually made in that year. The claim has not been allowed by the ITO, the AAC as well as the Appellate Tribunal, all of whom consistently held that liability for payment of the tax occurred, during the year when the sales took place and that it was not material that the payment was made in the assessment year 1968-69. Learned counsel for the assessee reiterated before us that in view of the fact that the recovery of the tax remained stayed till October 10, 1967, and that the actual payment was made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case there is no dispute about the fact that the assessee maintained account books on mercantile basis and, consequently, it is the decision of the Supreme Court in the case of Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC), which should apply. Learned counsel added that the decision of the Gauhati High Court in the case of CIT v. Nathmal Tolaram [1973] 88 ITR 234 (Gauhati) cannot also be followed for the same reason. In the case of Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC), it was observed (p. 366) : " Now, under all sales tax laws including the statute with which we are concerned, the moment a dealer makes either purchases or sales which are subject to taxation, the obligation to pay the tax arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le is effected and the fact that the tax is paid in a subsequent year is of no consequence. An identical view was taken by the Calcutta High Court in the case of Chowringhee Sales Bureau P. Ltd. v. CIT [1977] 110 ITR 385. In the case of Deep Chand Shyam Sunder [1980] 125 ITR 724 (All), the Division Bench of this court referred to the decisions of the Supreme Court in the cases of Chowringhee Sales Bureau P. Ltd. [1973] 87 ITR 542 (SC), Sinclair Murray and Co. [1974] 97 ITR 615 and Kedarnath Jute Mfg. Co. Ltd. [1971] 82 ITR 363 and distinguished the same with the following observations : " We are of the view that there is no conflict at all. In Chowringhee Sales Bureau and Sinclair Murray and Co. the question was not considered from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the, assessment year 1962-63. The amount paid in excess of what was set apart was claimed as a deduction by the firm for that year. The claim Was accepted as allowable. Now, there are two reasons for which this decision should be of no help to the assessee. In the first instance, there is the fact that the decision of the Supreme Court in the case of Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC) was not brought to the notice of the Bench deciding this case. Further, the exemption was claimed only for the excess amount quantified and not for the whole amount. In fact the case of CIT v. Banwari Lal Madan Mohan [1978] 110 ITR 868 (All) was distinguished on that basis in the two Bench decisions of the court, viz., Banwari Lai Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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