9911796707
TMI Blog1994 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,60,763. The said amount was not paid by the assessee to the bank. However, the provision was made for the same and deduction for the same was claimed, for the reason that the assessee was maintaining its account on mercantile basis. The Assessing Officer rejected the assessee's claim. It was noticed that the bank had instituted a suit against the assessee for recovery of the principal amount as also the interest accrued thereon. The Assessing Officer has noted that even in the earlier years, the assessee had failed to pay interest to the bank and in the suit filed by the bank, the assessee is disputing his liability to pay the principal amount, as also any interest thereon. He, therefore, concluded that there is no liability in praesen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 84, and the liability for interest claimed during the year under consideration pertains to the period subsequent to the institution of the suit. A copy of the plaint as also the written statement filed by the assessee in that suit has been filed. The learned counsel was fair enough to admit that in the written statement, the assessee has denied its liability to pay interest, as also the principal amount claimed by the bank. It was the contention of the assessee that since the assessee has maintained its account on mercantile system, the liability which has accrued on account of agreement between the bank and the assessee is an ascertained and accrued liability and deduction for the same is allowable. In support of this stand, reference was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of its dues. The liability for interest claimed by the assessee pertains to the period after institution of the suit. In view of the provisions contained in s. 34 of the CPC, the award of interest after the date of suit is entirely in the discretion of the Court. It is well settled that the discretion of the Court to grant or refuse interest after institution of the suit is not excluded by an agreement to pay certain rate of interest till realisation. In this situation, it cannot be held that the liability to pay pendente lite and future interest is an ascertained liability. The liability to pay such interest depends on the decision of the Court and is, therefore, a contingent liability. The fact that the assessee had been maintaining it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to him, vouchers are available for the expenditure incurred by the assessee. It has been contended that the disallowance was made without any basis and the same deserves to be deleted. On the other hand, the learned Departmental Representative has supported the disallowance. 12. We have considered the rival submissions. The assessee has filed details of the expenses incurred by it on maintenance of the truck and they are available at pages 27 and 28, of the assessee's compilation. No cogent material could be brought on record for doubting the expenses. The estimated disallowance has been made without any reasonable basis. In our opinion, the disallowance is not justified. We accordingly delete the same. 13. The next issue relates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). On the other hand, the learned Representative for the Revenue has supported the disallowance. He has pointed out that some of the payees are located at Hamidia Road, Bhopal, that is, where the office of the assessee is situate and, therefore, there could be no difficulty in making payment by crossed cheques. 15. We have considered the rival submissions. It is evident that the Revenue authorities have not doubted the payment or the identity of the payee. We also see no reason to disbelieve the version of the assessee that the payees has insisted on cash payment. Applying the ratio of the decision in the case of Girdharilal Goenka, cited supra, we are of the opinion that the disallowance made is not justified. We accordingly delete the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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