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TMI Blog2005 (3) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... iability under the terms and conditions of compromise cannot be wiped out. It was not a unilateral act on the part of the assessee but was a bilateral consented action on behalf of the parties - As such it cannot be termed as an unascertained liability. - if the workers had raised a claim and the assessee had admitted the liability to the extent of the provision made, then, it would be a matter entitled to the deduction. - assessee would be entitled to deduction because demand of the bank has been admitted by him and a compromise deed is executed which has clauses which would remain in force irrespective of its duration - I. T. A. No. 438 of 2004 - - - Dated:- 3-3-2005 - Judge(s) : SWATANTER KUMAR., MADAN B. LOKUR JUDGMENT The judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated January 12, 2004 the Tribunal held as under: "We have carefully considered the entire material on record. In view of clauses (a) to (i) of the agreement dated October 31,1992, the outstanding amount was to be paid with interest in a phased manner. Since the assessee had not complied with the terms of the agreement the concession granted by the bank to the assessee was to be withdrawn. In view of the same, the rate of interest on the amount of Rs. 339 lakhs was 18.5 per cent. The assessee had made the provision of interest-as per the agreement and not as per the original terms and conditions of the loan. Even if the amount of loan was not paid by the assessee as per the agreement, the liability cannot cease to exist. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utstanding with further interest at the agreed rate in terms of clause (i) of the agreement. While relying upon the judgment of the Madras High Court in the case of CIT v. Anamallais Bus Transports P. Ltd. [1975] 99 ITR 445, learned counsel appearing for the appellant-Department contended that it was under an ascertained liability so as to entitle the assessee for allowance. In the expression "ascertained liability" the emphasis is on the word "ascertained". The word "liability" is hardly of any consequence as liability to pay is an admitted fact. The only question before the court is whether the amount reflected by the assessee was, or was not, an ascertained amount. The word "ascertain" has been defined in Black's Law Dictionary VIth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction because demand of the bank has been admitted by him and a compromise deed is executed which has clauses which would remain in force irrespective of its duration. Thus, the reasoning given by the Commissioner of Income-tax (Appeals) has been correctly rejected by the Tribunal. Furthermore, the reasoning given by the Tribunal cannot be faulted, even on the plain reading of the relevant provisions. The interpretation given to the expression "ascertained liability" is in consonance with the scheme of the Act. The present appeal thus raises no substantial question of law in terms of the principle laid down by different judgments including the Division Bench judgment of this court in the case of CIT v. S.R. Fragnances Ltd. [2004] 270 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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