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Documents citing Rayalaseema Mills Limited vs Commissioner Of Income-Tax, Andhra ... on 19 June, 1984

Indian Express Newspapers (Bombay) ... vs Inspecting Assistant Commissioner on 29 May, 1991

and Rayalaseema Mills Ltd. v. CIT [1985] 155 ITR 19 (AP). In the light of these decisions, for the assessee to contend that what is debited to the profit & loss account was an accrued, actual and ascertained liability would be a travesty. The CIT's assuming jurisdiction under Section 263 has not in any way infringed any provisions of the Act. The CIT also on perusal of the records, found that there was substantial debit balances in the names of the sister concerns. Assessee had been charging interest on these debit balances in the past. For some obscure reasons, no such interest was charged during the year. It is for this reason that the CIT thought it necessary to initiate action under Section 263. His formation of prima facie opinion that the order passed by the AO was erroneous being prejudicial to the interest of the revenue, cannot be faulted on the facts and circumstances of the case.
Income Tax Appellate Tribunal - Mumbai Cites 12 - Cited by 0 - Full Document

Express Cables Private Ltd. vs Commissioner Of Income-Tax on 15 May, 1989

11. Our attention has been drawn to the decision of the Andhra Pradesh High Court which in Rayalaseema Mills Ltd. v. CIT [1985] 155 ITR 19, considered a similar question. There the contention raised was that although the deduction does not fall under Section 37, not being an expenditure laid out or expended by the assessee, it was nevertheless allowable under Section 28 on the reasoning that the amount is diverted under an overriding legal obligation. Repelling that contention, the court proceeded to hold (headnote) :
Calcutta High Court Cites 11 - Cited by 0 - Full Document

Seshasayee Paper Boards Ltd. vs Commissioner Of Income- Tax on 28 November, 1997

15. We are also of the view that the principle laid down by the Andhra Pradesh High Court would equally apply to the facts of the case as regards the character of the money set apart by the assessee for the payment of bonus. The money is not paid to the employees and the employees have no right over the money and the money can be used in the subsequent years for the business purposes of the assessee when there is shortfall in the amount of allocable surplus. Therefore, it cannot be said that there is a diversion of income by overriding title as the amount is set apart after the profit is earned, nor can it be regarded as an expenditure incurred by the assessee as there is no subsisting legal obligation to pay bonus during the relevant accounting year. Further, the liability of the assessee during the accounting year is only a contingent liability and only to make up a shortfall that may arise in the subsequent accounting year, the amount is set apart and the liability to pay bonus will arise only in succeeding assessment years. Therefore, it cannot neither be called an expenditure, nor a loss, nor it can be regarded as trading liability.
Madras High Court Cites 30 - Cited by 9 - Full Document
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