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TMI Blog2010 (1) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... taken was that the payment of the amount had not crystalised. The Tribunal held that the payment had crystalised in the particular year. This is a pure question of fact and not of law and we have to uphold this finding of the Tribunal that the payment had in fact crystalised in the year. - Decided in favor of assessee. - Income-tax Appeal No. 11 of 2002 - - - Dated:- 8-1-2010 - Deepak Gupta, V.K. Ahuja, JJ. Vinay Kuthiala, Adv., for the Appellant M.M. Khanna, Sr. Adv., with Vayur Gautam, Adv., for the Respondent JUDGEMENT Deepak Gupta, J: This appeal under Section 260 of the Income-tax Act, 1961 has been admitted on the following substantial questions of law:- (a) Whether on the facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The Forest Department claimed that this amount had been paid by it to the State and therefore claimed reimbursement of the same from the assessee. The Tribunal held that this amount had crystalised during the year in question and held as follows:- "The assessee was following mercantile system. It has filed a copy of letter dated 05.10.1994, page 13 of the paper book, which clearly mentions that reconciliation of accounts was complete and was to be urgently carried out. On the basis of the said letter, the assessee reconciled the accounts with the Forest Department for ascertaining its liability. Prior to reconciliation, liability had not been settled/crystalised. This is settled law that on the basis of mercantile system, liability sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 260-A. To understand the dispute between the parties, it would be pertinent to refer to Section 43B(a) of the Act:- "43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or) (b) xxx... xxx... xxx.... (c) xxx... xxx... xxx.... (d) xxx... xxx... xxx.... (e) xxx... xxx... xxx.... (f) xxx... xxx... xxx.... shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es have been cited by the parties. In State of M.P. vs. Mahalaxmi Fabric Mills Limited and others, AIR 1995 SC 2213, the Apex Court held that royalties are payments which the Government may demand for appropriation of minerals timber or other property belong to the Government. Two important feature of royalty are that payment is made for the privilege of removing the articles in proportion to the quantity moved and the basis of the payment is an agreement. In Bharat Earth Movers vs. Commissioner of Income-tax, (2000) 245 ITR 428, the Apex Court held that if the assessee had made provision for meeting the liability incurred by it under the leave encashment scheme proportionate to the entitlement earned by the employees of the company it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention relating to the levy being an excise duty. The High Court also erred in holding that even an excise duty or other duty imposable by virtue of entry 51 of List II would be covered by the principle that the amount levied under that entry should also be treated as a price or consideration for the purposes of the grant of privilege with regard to the manufacture of alcohol." In reply to the preliminary objection raised that this plea was not taken before the Tribunal, Shri Vinay Kuthiala, learned counsel for the revenue submits that this is a legal plea based on statutory provisions and therefore, cannot be ignored. He relies upon the judgements of the Apex Court in Moly and another vs. State of Kerala, (2004) 4 SCC 584 and Dakshin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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