9911796707
TMI Blog1985 (3) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... of spinning of yarn from waste cotton and sale of yarn. For the asst. yr. 1979-80, for which the accounting year ended on 31st Dec., 1978, the assessee claimed deduction of provident fund contribution of Rs. 2,474. The ITO disallowed the amount on the ground that the amount related to the earlier years for the period May, 1976 to Dec., 1977 On appeal before the Commissioner (Appeals) it was contended by the assessee that there was dispute regarding the contribution payable to the Regional Commissioner for Employees provident Fund and the dispute was settled in Oct., 1978 and the amount was remitted on 31st Dec., 1978. The Commissioner (Appeals) accepted the claim of the assessee as there was an honest difference of opinion regarding interp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. After due consideration, we are of the opinion that the order of he Commissioner (Appeals) is justified in the facts and circumstances of the case and does not call for any interference. the provisions of the Employees Provident Fund Act and the exact details of dispute were not brought on record for appreciation. The ratio of the Supreme Court decision in the case of Kedarnath Jute Mfg. Co. Ltd. cited supra is that an assessee who follows mercantile system of accounting is entitled to deduct from the profits and gains of the business the sales tax liability which had accrued during the period for which the profit and gains were being computed. It was pointed out by the Supreme Court that the moment a dealer makes either purchases or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and for payment and his endeavour to get out of liability by preferring appeals could not in any way detract from or retard efficacy of he liability which had been imposed upon him by the competent excise authority. The Supreme Court referred to this decision of the Madras High Court and observed that the decision of the Madras High Court lays down the law correctly. From the atoresaid decision, it is clear that an assessee who is following the mercantile system of accounting can claim statutory liablity such as sales tax or excise duty on accrual basis or on the basis of enforceable liability by way of service of demand notice. In this case of Kedaranath Jute Mfg. Co. Ltd. demand notice as served long after the end of the accounting year a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) held that the assessee could avoid the damage contemplated in s. 79 by satisfying either of he two conditions in s. 79 For this proposition he relied on the ratio of the Bombay High Court decision in the case of Italindia Cotton Co. Pvt. Ltd. vs. CIT 1978 (Bom) 168 : (1978) 113 ITR 58 (Bom). Further, he pointed out that s. 79 applied only to business losses and not to depreciation, development rebate and investment allowance. For this proposition, he relied upon the decision of the Madars High Court in the case of CIT vs. Concord Industries Ltd. (1979) 13 CTR (Mad) 312 : (1979) 119 ITR 458 (Mad). Thereafter, the Commissioner (Appeals) set out to find out whether the change in the share holding was effected with a view to av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) is to be accepted and even before us no contrary material was brought to our notice to dispute the veracity of the finding given by the Commissioner (Appeals). The observation of the Commissioner (Appeals) that the assessee could avoid the damage in s. 79 by satisfying either of the conditions has presumably given rise to a presumption that he meant that the conditions in s. 79 are mutually exclusive. As a matter of fact there is no warrant for such assumption of resumption inasmuch as the decision relied upon by the Commissioner (Appeals) viz, Italinadia Cotton Co. Pvt. Ltd. vs. CIT 1978 CTR (Bom) 166 : (1978) 113 ITR 38 (Bom) clearly shows that the sub-cl. (b) of s. 79 is not independent of sub-cl. (a) of that section and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
