9911796707
TMI Blog1991 (12) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 1978-79 ? " The background facts, shorn of unnecessary details, are as follows : M/s. Indian Metals and Carbide Limited (hereinafter referred to as "the assessee ") is a limited company. For the assessment year 1978-79, a return was filed on August 30, 1978, declaring a loss of Rs. 42,25,150. A revised return was filed on March 23, 1981, declaring a loss of Rs. 45,91,800. In the revised return, a sum of Rs. 3,04,442 was claimed as deduction of interest payable to the holding company, M/s. Indian Metals and Ferro Alloys Ltd. (in short " IMFA "), in respect of the advance made by the said company to its subsidiary the assessee-company. The Assessing Officer did not accept this claim on the ground that though substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year in which the claim was made. Relying on a decision of the Supreme Court in the case of Kedarnath Jute Manufacturing Co. Ltd. v. CIT [1971] 82 ITR 363, the Commissioner of Income-tax (Appeals) allowed the claim. The Revenue assailed the correctness of the conclusions of the Commissioner of Income-tax (Appeals) in appeal before the Tribunal. The Tribunal affirmed the conclusions of the Commissioner of Income-tax (Appeals). In addition to the grounds indicated by the Commissioner of Income-tax (Appeals), it was observed that the receipt of the interest amount in question was reflected in the accounts of the holding company and had been brought to tax. The Tribunal, accordingly, dismissed the appeal filed by the Revenue. On be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch accrual is not dependent upon the passing of a resolution. It is not the case of the Revenue that there was any agreement not to charge interest. As indicated above, the quantification of the amount payable was done by the resolution. Liability to pay and quantification are different aspects, though having a live link for the purpose of assessment of income. The method of accounting being mercantile, belated entry in the books of account and/or passing of resolution was inconsequential. This conclusion gains sustenance from the view of the Supreme Court in Kedarnath Jute Manufacturing Co. Ltd.'s case [1971] 82 ITR 363, that a deduction may be allowed in respect of a statutory or other liability even if no provision is made for it in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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