1997 (11) TMI 95

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..... and in the circumstances of the case and on a correct interpretation of the relevant provisions of law, the Tribunal was justified in holding that sales tax liability amounting to Rs. 2,59,361 accrued during the previous year relevant to the assessment year 1978-79 and in that view sustaining the order of the Commissioner of Income-tax (Appeals) allowing the assessee's claim for the said deduction .....

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..... Commissioner of Income-tax (Appeals) agreed with the assessee and allowed the liabilities. The Tribunal upheld the findings of the Commissioner of Income-tax (Appeals). In a case where the assessee maintains mercantile system of accounting undoubtedly the liability to pay sales tax accrued the moment the sale or purchase transaction is completed. Whether the sales tax is actually paid or not, t .....

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..... taken by the Commissioner of Income-tax (Appeals) and the Tribunal is correct because the assessee was entitled to claim deduction since the amount had been paid only during the year relevant to the assessment year 1978-79 and the liability could not have been anticipated at any point of time prior to this. We accordingly answer the question in the affirmative and in favour of the assessee. DI .....

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