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Issues involved:
The judgment involves the issue of deduction for liability for market fee on the sale of sugar and molasses for the assessment years 1976-77 and 1977-78. Assessment Year 1976-77: The assessee claimed a deduction for liability for payment of market fee under the Bihar Agricultural Produce Markets Act, 1960. The Assessing Officer disallowed the claim stating it was neither contingent nor real. The Commissioner of Income-tax (Appeals) upheld the disallowance. The Tribunal considered the assessee's submissions and accepted the claim to the extent of Rs. 2,38,581.26, which was the market fee on sugarcane purchased in the market area. The claim for sugar and molasses sales was not allowed. Assessment Year 1977-78: In this year, the assessee claimed a deduction for market fee liability, which was disallowed initially. The Tribunal accepted the claim only for the market fee on sugarcane purchased in the market area, amounting to Rs. 1,74,259.23. The claim related to the sale of sugar and molasses was rejected. The Tribunal held that the assessee failed to prove that market fee was payable on the sale of sugar and molasses under the Bihar Agricultural Produce Markets Act, 1960. As there was no provision for such payment, the Tribunal rightly concluded that there was no liability for market fee on these sales. The question of law referred to the High Court was answered in favor of the Revenue and against the assessee for both assessment years 1976-77 and 1977-78.
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