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TMI Blog2014 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... to 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 - 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 – thus, the order of the Tribunal is upheld – Decided against revenue. - TAX APPEAL NO. 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asing gas from ONGC? 2. The assessee filed its return of income declaring total income. The assessee claimed that since it was maintaining accounts on mercantile basis, the liability to pay fuel charges having arisen in the year under consideration is an allowable revenue expenditure. During the course of assessment proceedings, the A.O held that this was not a statutory liability and therefore cannot be said to have accrued during the year under consideration and held that the liability claimed was not an allowable expenditure. On appeal the CIT (Appeals) dismissed the same. 3. On appeal before the Tribunal by the assessee, by impugned judgment and orders, Tribunal partly allowing the appeals, directed the Assessing Officer to allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive years. 7. Having taken look at the Alembic Chemical Works Limited V/s. Deputy Commissioner of Income-Tax, 266 I.T.R. 47, we are of the view that the Tribunal was justified in its view. This Court held in the said case of Alembic Chemical Works Limited that in case of an assessee following the mercantile system of accounting, a liability is said to be properly incurred when the dispute between the parties is amicably settled or finally adjudicated, where the liability in question is not a statutory liability. 8. In the instant case also, the liability of the assessee was contractual which came to be crystallized by virtue of the decision of the Apex Court by fixing the price of the Gas supplied by ONGC. We are, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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