2014 (12) TMI 61

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..... Tax Appeal No. Date of Tribunal's order ITA No. Assessment Year 31/2001 02.06.2000 5066/Ahd/1989 1983-84 306/2001 23.04.2001 5068/Ahd/1989 1985-86 59/2002 27.08.2001 1740/Ahd/1990 1986-87 81/2002 27.08.2001 1205/Ahd/1991 1987-88   These matters were admitted by this Court for consideration of the following substantial question of law:              Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal has substantially erred in law in deleting the addition made in respect of liability for purchasing gas from ONGC? 2. The assessee filed its return of income declaring total income. The assessee claimed that since it .....

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..... e liability. Differently put, the liability had accrued in the respective years which came to be quantified and crystallized by virtue of the Hon'ble Supreme Court deciding a price. The Tribunal was of the view that uncertainty and difficulty or the pendency of litigation relating to estimation or the pendency of litigation relating to estimation of the purchase price or fixing of purchase price would not convert the accrued liability into a contingent liability and since there remained no uncertainty or difficulty in estimation of the amount of such liability which had accrued in the respective assessment years of supply of Gas, the deduction would be allowable for the respective years.          .....

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..... . We are not giving any elaborate reasons for the same as in the case of Mahendra Mills Ltd. (Supra) it is held by this Court that since liability of assessee was contractual which came to be crystallized by virtue of decision of Supreme Court by fixing price of gas supplied by ONGC, in such a situation the conclusion of the Tribunal that deduction in respect of purchase price was to be allowed in respective years when supply of gas was received on basis of price which had been finally determined by Supreme Court is justified. Accordingly, the question is answered in the negative i.e. against the appellant - revenue and in favour of the assessee. 8. In view of the above, the impugned judgment and order passed by the Tribunal is confirmed. .....

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