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TMI Blog1982 (11) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... Government of Tamil Nadu proceeded against the firms---Soundammal Textiles, Bangalore Stores, OVEEKAY Textiles, and Balakrishna Textiles, in which the appellant was one of the partners---for alleged first sale of imported art silk yarn; that, these firms contended that they either sold away the import licences or used the yarn in their own manufacturing; that, such a plea of these firms was not accepted by the Sales-tax authorities; that, the decision of the Sales-tax authorities to levy Sales-tax on the alleged first sale of imported art silk yarn was confirmed on appeal by the Tribunal; that, these firms filed appeals against the decision of the Tribunal with the High Court of Madras; that, since no stay was obtained, the said Sales-taxes were now paid by the partners of these firms in small instalments; and that, the total Sales-tax payable had been claimed as a current liability by all the partners of these firms in their return of wealth. Under these circumstances, the representative argued that the appellant was definitely entitled to for deduction of Sales-tax payable by her in respect of these firms. " The AAC came to the conclusion on these facts that the liability to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken to be paid by the partners of these firms; that, the appellant was one of the partners in these firms; that, the various partners had claimed the Foreign Exchange penalty payable as a liability in their returns of wealth; that, the High Court of Madras held that the penalty levied by the Director of Enforcement was in accordance with the law; that, the appellant and other partners had sought leave of appeal to the Supreme Court; and that, though the demand of penalty had been sought to be stayed, it was still a subsisting liability eligible for deduction. Under these circumstances, the representative argued that the WTO was not justified in not granting deduction as sought by the appellant under this head. " The facts given above clearly go to show that the liability did exist and that the penalty payable under the Foreign Exchange Regulation Act stands on different footing for the purpose of allowing it as a liability in computing the wealth of the assessee from the consideration to be adopted for allowing it as a deduction in computing the income. Fines and penalties imposed for various infractions of law, if they are debts due to the State, become allowable in computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessees. Similarly, the Wealth-tax Officer also rejected the claim of the assessees for allowance of the penalty paid for violation of Foreign Exchange Regulations Act as a liability on the ground that the liability had not become final and that the same was being contested in appeals before Courts. 4. On appeal, the Appellate Asstt. Commissioner reversed the order of the Wealth-tax Officer and held that the liability towards sales-tax and the penalty levied for violation of Foreign Exchange Regulations Act, were debts owed by the assessee on the respective valuation dates and should be deducted while computing the net wealth for each of the assessment years under consideration. Against the orders of the AAC, further appeals were filed by the Department before the Tribunal. 5. The Tribunal dismissed the appeals by the Department agreeing with the AAC that the sales-tax liabilities and penalty for Infraction of Foreign Exchange Regulations Act, should be allowed as liabilities and deducted from the net wealth. Though what was stated above was very concise and succinct, the relevant facts found in respect of the sales-tax liabilities by the AAC, with which the Tribunal agreed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en filed, the liability to pay sales-tax could not be said to have been obliterated, could not be said to be non-existent. It, therefore, held that the deduction had been properly allowed by the AAC. 6. Since the Tribunal applied only the law laid down by the Supreme Court, it is now well-settled that no question of law arises for reference to the High Court if the matter is concluded by the decision of the Supreme Court. See Mathura Prasad v. CIT [1966] 60 ITR 428 (SC). It is for this reason we hold that no referable question of law arises out of the order of the Tribunal. 7. In so far as the Foreign Exchange penalty is concerned, the facts found by the AAC may again be quoted :--- " Foreign Exchange penalty (Assessment years 1969-70 to 1977-78) : For assessment years 1969-70 to 1977-78, the appellant claimed a sum of Rs. 2,20,000 representing Foreign Exchange penalty, as deduction. The WTO noticed that the levy of Foreign Exchange penalty was being contested by the appellant in appeal. The appellant also did not file full details about this penalty. Hence the WTO did not grant deduction sought by the appellant. At the time of hearing before me, the representative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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