9911796707
TMI Blog1991 (2) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... e ascertained liabilities ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the disputed central excise duty and sales tax liabilities were contingent liabilities, not liable to be deducted while computing the capital of the assessee under the Companies (Profits) Surtax Act, 1964?" In our view, the questions are not happily framed. The following question, in our view, will bring out the real controversy and we reframe the questions accordingly. " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the disputed central excise duty and sales tax liabilities are not liable to be deducted while computing the capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be provided for in the books of account. The Tribunal was of the view that these liabilities should not be deducted while computing the capital base of the assessee-company. At the hearing before us, the contentions which were raised before the Tribunal have been reiterated. On behalf of the assessee, Mr. Bhattacharjee, learned counsel, has submitted that these liabilities were not claimed in the income-tax assessment as they were treated as contingent liabilities and unless the dispute was finally determined the question of claiming such liabilities as deduction under the Income-tax Act did not arise. He has also submitted that these liabilities were not provided for in the books of account on the ground that the assesseecompany tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e balance-sheet of the year 1977 which is as follows: "SCHEDULE 16 Notes to accounts 1977 (Rs.) II. Contingent liabilities not provided for : (a) Income-tax demand in respect of assessment year 1961-62 not acknowledged by the company as debt 40,241 (b) In respect of Central Excise Department's demand not acknowledged by the company as debt 1,30,566 (c) In respect of sales tax demands not acknowledged by the company as debt 1,88,000" There are, however, other items with which we are not concerned. Similarly, for the year 1978, it has been shown as follows "SCHEDULE 13 Notes on the balance-sheet 1978 (Rs.) II. Contingent liabilities, in respect of (a) Income-tax demand pertaining to the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, it is attracted as and when sale takes place. From the balance-sheets, it would appear that these impugned demands are additional demands which the assessee allthroughout disputed. Had it not been so and had it been an ascertained liability, the assessee would have claimed them as deduction in the profit and loss account as well as in the income-tax assessment. It is not disputed that the assessee had not claimed any deduction of those liabilities in arriving at the profit as the liabilities, according to the assessee, were contingent liabilities, nor had such liability been claimed as a deduction by the assessee in the income-tax assessment. Accordingly, these liabilities although relate to sales tax and excise duty but such liabilitie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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