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TMI Blog2013 (6) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the liability of the ascertained amount. - mere change in its liability in toto and not to quantitative only cannot be made the liability as unascertained liability, which was ascertained when demanded and in the same way, liability was contingent depending upon the ambiguity in the legal opinion which upon the judgment of the Patna High Court in the assessee's case wiped out the ascertained contingent liability of the assessee. The distinction is required to be seen in unascertained and contingent liability. In earlier years, the assessee was not entitled to get the benefit of section 32AB and, therefore, it is not a case of taking double benefit, rather to say other view will deny the benefit to the petitioner in both the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs from the statement of the case submitted before us that the Tribunal not only decided the issues in favour of the assessee on the basis of the legal opinion formed by it in the order dated January 8, 1998, but also was of the view that the order ought to be rectified under section 154 of the Income-tax Act, 1961, which was wrongly done by the lower authority, looking to the scope of section 154 of the Act of 1961. The Assessing Officer has given reasons for forming opinion that the provisions of the excise duty written back should be held as profit from business for the purpose of deduction under section 32AB of the Income-tax Act, 1961, and the Tribunal was justified in law in holding that the dividend (Rs. 5.05 lakhs), capital gains (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v), the assessee was not entitled to add the accumulated amount for the contingent liability as provided under the relevant year so as to claim the adjustment under section 32AB of the Act. So far as the dividend and the capital gains are concerned, learned counsel for the appellant did not press the issue seriously in view of the judgments rendered by the various High Courts wherein, it has been held that the dividend and the capital gains are income for the purpose of allowance under section 32AB of the Income-tax Act. Learned counsel for the respondent, Shri N. K. Poddar, drew our attention to the various judgments which include the decisions of the Bombay High Court (CIT v. Parle Biscuits Ltd. reported in [2006] 282 ITR 547 (Bom)) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows that upon cessation of the liability, the liability shall be deemed to be profits and gains of business or profession and shall accordingly be chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which, the allowance or deduction has been made is in existence in that year or not. In view of various provisions making the amount in question as provided under section 41(a) and (b), the assessee cannot be denied the benefit of the allowance permissible under section 32AB of the Act. Learned counsel for the assessee vehemently submitted that this reference application may be rejected only on the ground that the Tribunal was right in holding that the correction made under section 154 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 32AB as well as Part III of Schedule VI to the Companies Act, 1956, and, thereafter, held, as the provisions made in the accounts up to the assessment year 1984-85 was to be considered as reserve and the amount withdrawn from this reserve should have been deducted from the profit as per the provisions of section 32AB(3)(a) of the Income-tax Act, 1961, and after considering Circular No. 461, dated July 9, 1986 (see [1986] 161 ITR (St.) 17), reached to the conclusion that the amount of Rs. 95.25 lakhs should be treated as a reserve only and not a provision. Hence, this amount is accordingly, rectified. Therefore, it appears from the order that on the basis of the undisputed and admitted facts, different view was taken by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in unascertained and contingent liability. In the facts of the case, the petitioner's liability was quantified, the amount on the basis of the order passed by the excise authorities and did not pay the tax in corresponding relevant years of those ascertained demands and it was accepted by the Revenue and not rejected on the basis of being unascertained amount. Therefore, in earlier years, the assessee was not entitled to get the benefit of section 32AB and, therefore, it is not a case of taking double benefit, rather to say other view will deny the benefit to the petitioner in both the years which will amount to the total denial of the benefit under section 32AB. Admittedly, the petitioner was taxed on this amount, i.e., Rs. 95.25 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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