9911796707
|
Home
Issues Involved:
1. Disallowance of provision for claims against loss and damaged goods. 2. Deduction of additional lorry hire, hire advance, trip advances, and spare bills payable to Saradhi Lines P. Ltd. Detailed Analysis: 1. Disallowance of Provision for Claims Against Loss and Damaged Goods: The primary issue in this appeal concerns the disallowance of Rs. 32,09,670 claimed by the assessee, a partnership firm of transporters, as a provision for claims against loss and damaged goods. The assessee follows a mercantile system of accounting and had claimed an expenditure of Rs. 50,60,274 in its transport work account, which included the disputed provision. The Assessing Officer disallowed the claim on the grounds that the liability was neither ascertained nor accepted as of 31st March, 1986. The CIT(A) upheld this disallowance, referencing a similar decision for the assessment year 1985-86. Both parties agreed that the issue was identical to the one in the previous year, and the Tribunal reviewed the detailed list of claims, noting that 50% of the provision had been settled within 2 1/2 years. The Tribunal referred to its earlier decision, which held that the occurrence of liability and its quantification are distinct processes. It was noted that the claims arose during the relevant previous year and the assessee had recognized these claims by making a provision in its books. The Tribunal rejected the Revenue's argument that no liability arose until the amount was ascertained or settled, emphasizing that the provision was based on actual claims and was not excessive or unreasonable. The Tribunal also discussed the Carriers Act, 1865, specifically Sections 8 and 9, which address the liability of carriers for loss or damage due to negligence or criminal acts. It was concluded that the assessee could reasonably apprehend liability for damages or loss, either as a carrier or an insurer of goods. The Tribunal thus deleted the disallowance of Rs. 32,09,670. 2. Deduction of Additional Lorry Hire, Hire Advance, Trip Advances, and Spare Bills Payable to Saradhi Lines P. Ltd.: The assessee sought to raise an additional ground for the deduction of Rs. 43,400.49, which was previously disallowed for the assessment year 1985-86. The CIT(A) and the Tribunal had earlier held that the expenditure did not relate to the assessment year 1985-86 as the debit notes were issued after 31st March, 1985. The assessee argued that the amount should be considered for the assessment year 1986-87. The Tribunal admitted the additional ground and, acknowledging the submission of the learned senior Departmental Representative, restored the issue to the Assessing Officer. The Assessing Officer was directed to examine the admissibility of the claim and pass appropriate orders in accordance with the law. Conclusion: The appeal was allowed, with the Tribunal deleting the disallowance of Rs. 32,09,670 and restoring the issue of the additional ground to the Assessing Officer for further examination.
|
