9911796707
TMI Blog2014 (8) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee for interest on Excise duty refund. The Hon'ble Gujarat High Court passed the order on 6th April, 1984 and the assessee was to receive the amount of Rs. 4,47,89,000/- from the revenue with interest at the rate of 12% per annum from the date of refund. The Assessing Officer observed that the amount will be allowed in the year in which it is actually paid. The disallowance by the Assessing Officer in these terms was upheld by the Commissioner of Income Tax (Appeal). Later on the matter was carried to the tribunal by the assessee and the assessee could not succeed therein as is clear from the finding in paragraph 19 of the order of the tribunal. However, the Assessing Officer pursued the matter and requested the tribunal to forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to the assessee alongwith interest. So long as this amount is not paid and the issue is pending before the Supreme Court, the deduction cannot be claimed and it has been rightly disallowed. 5. The tribunal relied upon these facts and in paragraph 19 of the order passed on 1st February, 1995 has distinguished the judgments relied upon by the assessee. It concluded that for prior assessment year this issue was considered in ITA No.3468/Bom/85 for the assessment year 1981-82. The order of the Gujarat High Court directing refund was received in April 1984. The assessee could not have accounted the same as accrued liability in his books. The liability was continued in the subject assessment years. The tribunal refused to deviate from earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court was that the fact that no order had been passed by the concerned authorities rejecting the cause shown by the assessee was not relevant in determining the allowability of the deduction on account thereof. Repelling the above contention, this court observed (page 370): "Law is well-settled that expenditure which is deductible for income-tax purpose is towards a liability actually existing in the year of account. Contingent liabilities do not constitute expenditure and cannot be the subject-matter of deduction even under the mercantile system of accounting. The income-tax law makes a distinction between the actual liability in praesenti and a liability de futuro which, for the time being, is only contingent. The former is deductible b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Even according to the assessee there was no accrued liability... Obviously, there was no liability actually existing against the assessee in the year of account. It was merely a contingent liability, which might or might not arise. That being so, the amount in question cannot constitute expenditure for the purposes of income-tax." The ratio of the above decision squarely applies to the facts of the present case. In this case also there was no actual liability in praesenti-no demand was raised against the assessee. What was served by the Collector on the assessee was merely a show-cause notice. The assessee did not admit any liability and showed cause refuting the allegations made in the show-cause notices. In fact, in the instant case, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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