9911796707
TMI Blog1998 (4) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee in fact was following the "mercantile system of accounting". According to the provisions of the Electricity (Supply) Act, 1948, the assessee has to make a provision for rebate to consumers. The assessee denied its responsibility to create reserve for rebate to the consumers. The Government, however, did not agree with the contention of the company and the company had to create a reserve. There is a charge on the company. If only such reserve had been created in the relevant accounting years, it should have been allowed as a charge on the profits of the company. Even when the Government quantified the reserve to be created, the company ignored such a direction and kept quiet. Finally, it had now claimed the entire contribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madras Bench-"D", Madras (for short "the Tribunal"), also concurred with the view of the Commissioner of Income-tax (Appeals). It is on these facts, the Tribunal, at the instance of the assessee, referred the question of law, as below, for the opinion of this court : "Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal, is right in holding that a sum of Rs. 6,76,921 contributed during the previous year to the reserve for rebate to consumers in respect of the accounting years 1950-51 to 1964-65, is not to be deducted in arriving at the taxable profits of the assessee ?" Arguments of Mr. P. H. Aravind Pandian, of Subbaraya Aiyar, Padmanabhan and Ramamani, learned counsel appearing for the assessee, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to dispute his liability and he fails or omits to make entries in his books of account. The mere fact that such a deduction was not claimed before the Income-tax Officer is not of much importance. If the liability arises, then a claim can be made bona fide at any stage before any higher authority, who is competent to grant relief. In holding such a view, their Lordships applied the cases in Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC) and Pope the King Match Factory v. CIT [1963] 50 ITR 495 (Mad). We respectfully agree with the view taken by their Lordships of the Bombay High Court. On the face of the said decision, we are of the view that the Income-tax Appellate Tribunal is right in holding that the sum of Rs. 6,76,921 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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