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TMI Blog1989 (9) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the U.P. State Electricity Board in respect of the consumption of electricity by the assessee in excess of the allotted quota, the assessee incurred neither any statutory liability nor any otherwise enforceable legal liability ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee was entitled to the deduction of the sum of ₹ 18,62,580 in the computation of the profits and gains of its business for the asst. yr. 1974-75 ? 2. The year of assessment is the asst. yr. 1974-75. The facts found by the Tribunal, as stated in the Statement of Case are as under : The assessee is Kanoria Chemicals Industries Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also a provision for arbitration in cl. 21 whereby all disputes and differences touching or arising out of the said agreement were to be referred to two arbitrators, one to be appointed by each party and the decisions of such arbitrators were to be final and binding on the parties. The Tribunal further found that the assessee had disputed the bills as in the bills the rates charged were found to be higher than the stipulated in the agreement. The assessee raised objection on the rates charged in the bills, which according to the assessee should be on the basis of the agreement. The dispute thereafter was referred to the arbitration and the sold arbitrator awarded a sum of ₹ 18,62,580 in favour of the U.P. State Elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had prima facie good and solid ground for disputing the bills raised against it. 3. It is true that if the assessee did not raise any dispute with regard to the bills, the assessee would have been liable to pay the entire amount demanded against the assessee and that liability came into existence as soon as the bills were presented to the assessee. But in the instant case, the assessee had raised disputes and the Tribunal found that there were good and solid grounds on which the assessee challenged the demand of the U.P. State Electricity Board. Therefore, the claim of the entire amount was in jeopardy. Settlement of a dispute arising out of the agreement to supply electricity by arbitration is provided in the agreement itself. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... einbefore. The said payments shall be made in the manner following, that is to say :- (c) If the Company disputes any item or items in any bill, it shall within thirty days of the delivery of the bill notify the Government in writing of the item or items disputed and the grounds of dispute, but the Company shall pay the total amount of the bill within the time prescribed in sub-cl. (b) above. If the company so desires it may pay the amount in respect of the disputed item or items under protest subject to adjustment, if any, on a future date after the dispute is settled. There is no doubt that the company could have paid the entire amount of the bill at once but the question still remains, what is the point of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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