9911796707
TMI Blog1972 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... of case relates to the assessment year 1958-59, the relevant accounting year being 2014 R.N. It is admitted that the assessee maintains the mercantile system of accounting. The facts appearing in the statement of case are briefly as follows. The assessee is an unregistered firm doing business in jute and other commodities at Dhubri. The Superintendent of Sales Tax assessed the firm to sales tax amounting to Rs. 47,625, in respect of business in jute during the periods ending on March 31, 1949, September 30, 1949, and March 31, 1950. The assessee filed appeals before the Appellate Assistant Commissioner of Taxes against the demand and later to the Commissioner of Taxes in revision unsuccessfully. The Commissioner rejected the revision peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. The Tribunal also found that after the Commissioner of Taxes rejected the assessee's petition in revision, the liability in respect of sales tax payable to the Government was debited in its books and, under the mercantile system of accounting, the liability has got to be allowed is a deduction as soon as it has been finally determined. The short point that arises for consideration is whether the expenditure claimed by the assessee under section 10(2)(xv) is a permissible deduction in law ? It is not disputed that the expenditure, being the sales tax demand, is wholly and exclusively for the purpose of the assessee's business. It is clear that the assessee maintains the mercantile system of accounting. It is also clear that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orced till the quantification is effected by assessment proceedings, the liability for payment of tax is independent of the assessment. It is significant that in the present case, the liability had even been quantified and a demand had been created in the sum of Rs. 1,49,776 by means of the notice dated 21 st November, 1957, during the pendency of the assessment proceedings before the Income-tax Officer and before the finalisation of the assessment. It is not possible to comprehend how the liability would cease to be one because the assessee had taken proceedings before higher authorities for getting it reduced or wiped out so long as the contention of the assessee did not prevail with regard to the quantum of liability, etc. An assessee wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, of which the previous year ended on December 31, 1954, was pending and the assessee filed a revised return on November 9, 1959, claiming the aforesaid deduction. The Income-tax Officer completed the assessment in that case on March 11, 1960, before any final decision was given in the proceedings relating to the assessment of sales tax. It is also clear from the report that the expenditure on account of sales tax demand was of the accounting year in question ending on 31st December, 1954. On account of the above features, Mr. Bhattacharjee submits that the aforesaid decision of the Supreme Court is of no assistance to the assessee. It is true that the features pointed out by Mr. Bhattacharjee are there in the particular facts of that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion that such a right accrued or arose to the assessee in a particular accounting year, he shall include the said income in the assessment of the succeeding assessment year. No power is conferred on the Income,-tax Officer under the Act to relate back an income that accrued or arose in a subsequent year to another earlier year on the ground that the said income arose out of an earlier transaction." We are unable to hold that this decision is at all of assistance to the 'learned counsel in this case. This was a case where an income was going to be related back to an earlier year. This power is not given to the Income-tax Officer under any provisions of the Act. Under section 4 of the Income-tax Act, the income that accrues or ari ..... X X X X Extracts X X X X X X X X Extracts X X X X
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