TMI Blog1972 (10) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. of the normal depreciation on the plant and machinery on account of double shift allowance for the whole year or for a proportionate to period ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in deleting the sums of Rs. 3,49,742 and Rs. 44,509 being the extra price payable for the purchase of sugarcane by Messrs. Kundan Sugar Mills and Pannijee Sugar Mills, respectively, as a deduction under the provisions of the Income-tax Act ? " The assessment years involved in respect of the first question are 1954-55 to 1958-59, 1960-61 and 1961-62. The assessment year involved in respect of the second question is 1961-62. The assessee was engaged in running two sugar mills, namely, Kundan Sugar Mills a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment and against the assessee. The assessee for the assessment year 1961-62 provided Rs. 3,49,742 as extra price payable by Kundan Sugar Mills and Rs. 44,509 an extra price payable by Pannijee Sugar Mills under the provisions of the Sugar cane (Control) Order. The Income-tax Officer disallowed this claim on the ground that it was a mere provision made for an anticipated liability and that the liability actually came to be ascertained in a much later year. On appeal, the Appellate Assitant Commissioner reversed the findings of the Income-tax Officer and directed the allowance of these sums. On appeal by the department the Income-tax Appellate Tribunal reversed the order of the Appellate Assistant Commissioner and restored that of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the price is so determined, the person or authority, as the case may be, shall intimate the same in writing to the producer and to the growers' co-operative society, or the local cane-growers' association, if any, connected with the supply of sugarcane to the factory. " An appeal from the decision of the authority appointed under sub-clause (4) lies before the Central Government under sub-clause (5) thereof. Sub-clause (6) stipulates that the price determined under sub-clause (4) or sub-clause (5), as the case may be, shall be paid at such time and in such manner as the Central Government may from time to time direct. In our view the liability for payment of additional price for sugarcane purchased by a producer of sugar or his agent du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability. In fact it was capable of ascertainment with reference to the Schedule annexed to the Sugarcane (Control) Order. In the case of Metal Box Company of India Ltd. v. Their Workmen [1969] 73 ITR 53, 62, 63 (SC), the Supreme Court observed : " In the case of an assessee maintaining his account on mercantile system, a liability already accrued, though to be discharged at a future date, would be a proper deduction while working out the profits and gains of his business, regard being had to the accepted principles of commercial practice and accountancy. It is not as if such deduction is permissible only in case of amounts actually expended or paid. " In that case a question arose as to whether provision for gratuity was an expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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