1971 (2) TMI 20

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..... Appellate Tribunal is: " Whether, on the facts and in the circumstances of the case, a sum of Rs. 2,05,787 has to be deducted for computing the assessee-firm's income of the previous year ? " M/s. Janki Sugar Mills Company, the assessee before us, manufactures and sells sugar. During the previous year ending October 28, 1960, relevant to the assessment year 1961-62, it purchased its requirement .....

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..... ons of the Schedule. " In assessment proceedings for the assessment year 1961-62, the assessee claimed a deduction of Rs. 2,05,787 on the ground that it was a liability for payment in connection with the sugar-cane purchased by it. The claim was rejected by the Income-tax Officer, who observed : " This deferred payment has been calculated at Rs. 2,05,787. No doubt these orders exist but in spit .....

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..... the Appellate Assistant Commissioner. He proceeded on the view that the liability did not arise so long as an order was not made by the Cane Commissioner requiring the assessee to pay the additional amount. He observed that such an order lay in the discretion of the Government and no such order had yet been made. Thereafter, the assessee preferred an appeal before the Tribunal. The Tribunal allowe .....

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..... time have not been produced before us, but we take it that the provision of clause (3A) of paragraph 3 as recited in the statement of the case has been correctly set out. Clause (3A) imposes a personal liability upon the producer of sugar to pay to the sugar-cane grower or the growers' co-operative society from whom he purchased his sugar-cane an amount in addition to the price fixed under paragr .....

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..... sary before the liability to make payment of the additional price could arise. The Tribunal, in disposing of the appeal, has clearly held that no such order was necessary. Nothing has been produced before us to show that the Tribunal is wrong in this regard. Upon the well-settled principles applicable in the mercantile system of accounting, there can be no doubt that a clearly ascertained liabilit .....

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