9911796707
TMI Blog1971 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... rm'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 of sugar-cane from sugar-cane growers' co-operative societies. In its accounts, which it maintained on the mercantile system, it debited the price of the sugar-cane. It also debited a sum of Rs. 2,05,787 as the additional price payable by it under clause 3-A of paragraph 3 of S.R.O. No. 1863, dated August 27, 1955, issued by the Central Government under section 3 of the Essential Commodities Act, 1955. The provision, as set out in the statement of the case, reads thus : " Where a producer of sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 allowed the appeal, taking the view that the law did not contemplate any order by the Cane Commissioner or other authority before the liability to pay the additional price arose. Though the liability was an existing liability, the amount payable was a fixed amount computed by reference to the provisions of the Schedule and therefore the assessee was right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and the Appellate Assistant Commissioner. Those authorities appear to have been under the impression that an order by the Cane Commissioner was necessary 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 liability arose during the previous year and the assessee was entitled to the deduction of that liability against the profits earned by it during the previous year. The question referred is answered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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