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Triveni Engineering Works Ltd. vs Commissioner Of Income-Tax on 30 October, 1986 cites

Shiv Prasad Ram Sahai vs Commissioner Of Income-Tax, Uttar ... on 21 September, 1965

In support of this proposition, he relied upon a decision of this court in Shiv Prasad Ram Sahai v. CIT [1966] 61 ITR 124. In our opinion, that case is clearly distinguishable and has no application to the present case. That was a case where the assessee carried on, inter alia, business of money-lending. In respect of a particular loan advanced by the assessee, interest income was being returned on the mercantile system, that is, on accrual basis. For the relevant year, the interest income which had accrued was not debited to the debtor's account nor was the interest income returned for assessment purposes. The stand taken by the assessee was that the debtor firm was in an embarrassed financial condition, and, therefore, the assessee wanted to be assessed on receipt basis. Dealing with such a situation, this court held that it may be open to an assessee to vary the terms of a particular contract but the variation must be by mutual agreement. It is not open to him to keep alive the contract and his rights thereunder, but, for the purposes of income-tax, to say that he will not debit the interest which may have accrued as a debt in its accounts for any reason whatsoever. As stated earlier, we are not concerned with that proposition. Moreover, the year in dispute is not the year in which the assessee has changed its method of valuing its closing stock. The change had been effected in the assessment year 1969-70 which was approved by the Income-tax Appellate Tribunal and was allowed to be followed in 1970-71. The decision of the Tribunal has become final as we are informed at the bar that the Department has not taken any reference proceedings, etc., against that order. The Tribunal, for this year, has merely followed its earlier year's order. In the question referred, there is a mention whether the Tribunal was right in following its earlier order for the year in dispute (order not served on the CIT). We have not been able to appreciate the significance of remarks " order not served on the CIT ". From the Tribunal's order, it does not appear that any such objection was taken before the Tribunal when the appeal was heard and what was its effect. In fact, in the statement of the case drawn up by the Tribunal also, there is no reference to this fact. However, proceeding on the footing that the earlier order was not served on the Department when the Income-tax Appellate Tribunal decided the appeal for the present year, in our opinion, it would not make any difference in binding effect of the findings recorded therein so long as it is not disputed that the said order has been accepted by the Department although it was served later. Having regard to the aforesaid discussion and in the circumstances of the case, we are of the opinion that the Tribunal did not commit any error of law in following its order for the earlier years and in deleting the addition of Rs. 16,30,110 made by the Income-tax Officer on account of undervaluation of closing stock of sugar. In doing so, the Tribunal only permitted the assessee to follow a method of accounting for valuation of its stock which the assessee was allowed to change in the assessment year 1969-70. The assessee was obliged to follow it. The view taken by the Tribunal on the deletion of Rs. 16,30,110 in the circumstances of the case cannot be assailed with any justification whatsoever.
Allahabad High Court Cites 7 - Cited by 45 - Full Document

Commissioner Of Income-Tax, Delhi vs Mahalaxmi Sugar Mills Co. Ltd on 15 July, 1986

15. We now take up question No. 2. A sum of Rs. 3,08,800 was disallowed out of revenue expenses claimed by the assessee. This represented interest paid by the assessee on cane purchase tax arrears. According to the provisions of the U.P. Sugarcane (Purchase Tax) Act, 1961, if the purchase tax is not paid by the prescribed date, the defaulter is liable to pay it together with interest at the rate of 6% per annum till the dues are paid by him. The disputed amount was disallowed on the ground that payment of interest under the aforesaid provision of the said Act is on account of infringement of law and thus it could not be treated as revenue expenditure. Reliance for this view was placed on the decision of the Delhi High Court in CIT v. Mahalaxmi Sugar Mills Ltd. [1972] 85 ITR 320.
Supreme Court of India Cites 11 - Cited by 115 - R S Pathak - Full Document

Kamlapat Motilal vs Commissioner Of Income-Tax, Uttar ... on 29 January, 1962

As stated earlier, the Income-tax Appellate Tribunal, while allowing the claim of the assessee, had followed the Division Bench decision in Kamlapat Motilal's case [1976] 104 ITR 783 (All) which has since been approved by a Bench of five judges of this court and we are bound by it. In the circumstances, no fault can be found in the decision of the Income-tax Appellate Tribunal. The Tribunal is right in holding that a sum of Rs. 3,08,800 paid by the assessee by way of interest on cane purchase tax arrears under the provisions of the U.P. Sugarcane (Purchase Tax) Act, 1961, is an allowable deduction under the Income-tax Act, 1961.
Supreme Court of India Cites 8 - Cited by 34 - S K Das - Full Document
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